We Are Not at the End of the Oil Age; New Developments
Soon Will Increase the World's Supply

Charleston Daily Mail
RedNova
Saturday, August 6, 2005

We Are Not at the End of the Oil Age;: New Developments
Soon Will Increase the World's Supply

WE are not running out of oil - not yet. "Shortage" is
certainly in the air - and in the price.

Right now, the oil market is tight, even tighter than it
was on the eve of the 1973 oil crisis. In this high-risk
market, "surprises" ranging from political instability to
hurricanes could send oil prices spiking higher.

Moreover, the specter of an energy shortage is not
limited to oil. Natural gas supplies are not keeping pace
with growing demand.

Even supplies of coal, which generates about half of the
country's electricity, are constrained at a time when our
electric power system has been tested by an extraordinary
heat wave.

But it is oil that gets most of the attention. Prices
around $60 a barrel, driven by high demand growth, are
fueling the fear of imminent shortage - that the world is
going to begin running out of oil in five or 10 years.

This shortage, it is argued, will be amplified by the
substantial and growing demand from two giants: China and
India.

Yet this fear is not borne out by the fundamentals of
supply. Our new, field-by-field analysis of production
capacity, led by my colleagues Peter Jackson and Robert
Esser, is quite at odds with the current view and leads
to a strikingly different conclusion:

There will be a large, unprecedented buildup of oil
supply in the next few years. Between 2004 and 2010,
capacity to produce oil (not actual production) could
grow by 16 million barrels a day - from 85 million
barrels per day to 101 million barrels a day - a 20
percent increase.

Such growth over the next few years would relieve the
current pressure on supply and demand.

Where will this growth come from? It is pretty evenly
divided between non-OPEC and OPEC.

The largest non-OPEC growth is projected for Canada,
Kazakhstan, Brazil, Azerbaijan, Angola and Russia. In the
OPEC countries, significant growth is expected to occur
in Saudi Arabia, Nigeria, Algeria and Libya, among
others.

Our estimate for growth in Iraq is quite modest - only 1
million barrels a day - reflecting the high degree of
uncertainty there.

In the forecast, the United States remains almost level,
with development in the deep-water areas of the Gulf of
Mexico compensating for declines elsewhere.

While questions can be raised about specific countries,
this forecast is not speculative. It is based on what is
already unfolding.

The oil industry is governed by a "law of long lead
times." Much of the new capacity that will become
available between now and 2010 is under development. Many
of the projects that embody this new capacity were
approved in the 2001-03 period, based on price
expectations much lower than current prices.

There are risks to any forecast. In this case, the risks
are not the "below ground" ones of geology or lack of
resources. Rather, they are "above ground" - political
instability, outright conflict, terrorism or slowdowns in
decision-making on the part of governments in oil-
producing countries. Yet, even with the scaling back of
the forecast, it would still constitute a big increase in
output.

This is not the first time that the world has "run out of
oil." It's more like the fifth. Cycles of shortage and
surplus characterize the entire history of the oil
industry.

A similar fear of shortage after World War I was one of
the main drivers for cobbling together the three
easternmost provinces of the defunct Ottoman Turkish
Empire to create Iraq. In more recent times, the
"permanent oil shortage" of the 1970s gave way to the
glut and price collapse of the 1980s.

But this time, it is said, is "different." A common
pattern in the shortage periods is to underestimate the
impact of technology. And, once again, technology is key.
"Proven reserves" are not necessarily a good guide to the
future.

The current Securities and Exchange Commission disclosure
rules, which define "reserves" for investors, are based
on 30-year-old technology and offer an incomplete picture
of future potential. As skills improve, output from many
producing regions will be much greater than anticipated.
The share of "unconventional oil" - Canadian oil sands,
ultra-deep-water developments, "natural gas liquids" -
will rise from 10 percent of total capacity in 1990 to 30
percent by 2010.

The "unconventional" will cease being frontier and will
instead become "conventional." Over the next few years,
new facilities will be transforming what are inaccessible
natural gas reserves in different parts of the world into
a quality, diesel-like fuel.

The growing supply of energy should not lead us to
underestimate the longer-term challenge of providing
energy for a growing world economy. At this point, even
with greater efficiency, it looks as though the world
could be using 50 percent more oil 25 years from now.
That is a very big challenge.

But at least for the next several years, the growing
production capacity will take the air out of the fear of
imminent shortage.

And that in turn will provide us the breathing space to
address the investment needs and the full panoply of
technologies and approaches - from development to
conservation - that will be required to fuel a growing
world economy, ensure energy security and meet the needs
of what is becoming the global middle class.

Yergin wrote the book "The Prize: the Epic Quest for Oil,
Money and Power," which received the Pulitzer Prize.

http://www.rednova.com/news/science/...age/index.html

- - - - - - -

Man oh Man, that was a close call. I am so glad they were
wrong.

Posted on 8/05/2005 10:35:34 PM PDT by dila813

- - - - - - - - - - - - - - - - - - - - - - - - - - - -
End of forwarded messages

Jai Maharaj
http://www.mantra.com/jai
Om Shanti

Hindu Holocaust Museum
http://www.mantra.com/holocaust

Hindu life, principles, spirituality and philosophy
http://www.hindu.org
http://www.hindunet.org

The truth about Islam and Muslims
http://www.flex.com/~jai/satyamevajayate

The terrorist mission of Jesus stated in the Christian bible:

"Think not that I am come to send peace on earth: I came not so send
peace, but a sword.
"For I am come to set a man at variance against his father, and the
daughter against her mother, and the daughter in law against her mother in
law.
"And a man's foes shall be they of his own household.
- Matthew 10:34-36.

o Not for commercial use. Solely to be fairly used for the educational
purposes of research and open discussion. The contents of this post may not
have been authored by, and do not necessarily represent the opinion of the
poster. The contents are protected by copyright law and the exemption for
fair use of copyrighted works.
o If you send private e-mail to me, it will likely not be read,
considered or answered if it does not contain your full legal name, current
e-mail and postal addresses, and live-voice telephone number.
o Posted for information and discussion. Views expressed by others are
not necessarily those of the poster who may or may not have read the article.

FAIR USE NOTICE: This article may contain copyrighted material the use of
which may or may not have been specifically authorized by the copyright
owner. This material is being made available in efforts to advance the
understanding of environmental, political, human rights, economic,
democratic, scientific, social, and cultural, etc., issues. It is believed
that this constitutes a 'fair use' of any such copyrighted material as
provided for in section 107 of the US Copyright Law. In accordance with Title
17 U.S.C. Section 107, the material on this site is distributed without
profit to those who have expressed a prior interest in receiving the included
information for research, comment, discussion and educational purposes by
subscribing to USENET newsgroups or visiting web sites. For more information
go to: http://www.law.cornell.edu/uscode/17/107.shtml
If you wish to use copyrighted material from this article for purposes of
your own that go beyond 'fair use', you must obtain permission from the
copyright owner.

Since newsgroup posts are being removed
by forgery by one or more net terrorists,
this post may be reposted several times.

But we are near then end of atmosphere. Pollution here is so bad that my
respiratory system and eyes are affected and asma is getting common. The
global climate is not to good either and the temperature here at 7 am is
23C. I'm quite uncomfortable.

We must quit using oil immediately.

Chris.

"Dr. Jai Maharaj" wrote in message
news:GoeXI5972iVNLa@RtoEx...
We Are Not at the End of the Oil Age; New Developments
Soon Will Increase the World's Supply