Peak oil : on the verge of hitting prime time

Some time within the next twenty years, perhaps as early as 2008, world oil production will peak, and life as we know it will change. This seems to be the emerging consensus being rapidly embraced by the academic and trading community in some circles. One scientist, the University of Reading's Dr Roger Bentley, the secretary of the Association for the Study of Peak Oil & Gas, told the audience that "the evidence is irrefutable. He points out that 64 of the world's 100 or so oil-producing countries are already past the point of peak production and on the downward slope.

Dr. Bentley sounds pessimistic. But there were others who sounded darker tones: Dr. Jeremy Leggett, an oil industry geologist turned environmental campaigner turned chief executive of a solar energy company, paints an even more apocalyptic scene. He believes that peak oil will occur some time this decade. That will not only produce "horrible economic pain" as oil prices rise to choke off demand but it will also precipitate environmental disaster as oil-consuming countries switch to coal and hasten global warming."

Oil production is slowing. Prices have been rising. And the Peak Oil movement is gathering steam. So far, this is "inside baseball," within investing and scientific circles, with some mention in the mainstream media. But one thing is certain. Peak oil is working on becoming a reality. Whether it comes because there is no oil left to produce, or whether it comes because oil companies aren't willing to take the huge risks now needed to get at the stuff, doesn't really matter. In other words, if you can't get it, or you won't get it, you still don't get it. And splitting hairs over this won't matter much, if it gets to the point where we sit in cold, dark houses, as we watch our cars rust.

(2006-01-23 22:39:18 SGT) [Energy] Permalink

Oil for delivery in 5 years rises on supply concern

peakoil.com -> quote.bloomberg.com :

Oil traders are paying record prices to get crude almost five years from now, reflecting increasing doubts the oil boom will go bust. New York Mercantile Exchange futures contracts for December 2010 ended last week at $64.45 a barrel, the highest yet for that month. The price has risen 68% in the past year as investors speculated on further gains and refiners sought to lock in the cost of supplies. The 2010 crude contract on the New York Mercantile Exchange has exceeded $50 a barrel continuously for almost eight months. When it debuted almost two years ago, it was at about $27. Buyers of futures contracts are guaranteed oil deliveries at a set price and agreed-upon date.

"It's meaningful that there are people who are prepared to buy oil at that price" for delivery in 2010, said Ian Henderson, who manages $1.1 billion in JPMorgan's Natural Resources Fund in London, which had a return of 50 percent last year. "It's almost politically unacceptable to admit that supply isn't going to grow as fast as demand, but it's already doing that."

Crude oil for March delivery rose as much as 72 cents, or 1.1 percent, to $69.20 in electronic trading on the New York Mercantile Exchange. It was at $68.96 at 10:32 a.m. in Singapore, 41 percent higher than a year ago.

The prices for futures at the end of this decade and beyond reflect the views of those who think that oil output is near its peak and will start declining as older fields are exhausted, or of traders who doubt that enough will be invested to pump more, said John Waterlow, an analyst at Wood Mackenzie Consultants Ltd. in Edinburgh. Goldman Sachs Group Inc. analyst Arjun Murti, who roiled oil markets in March by saying crude may reach $105 a barrel, last month wrote that view may be conservative if the "peak oil" theory is right.

(2006-01-23 22:11:02 SGT) [Energy] Permalink

China to build world's first "artificial sun"

peakoil.com -> angolapress-angop.ao :

A full superconducting experimental Tokamak fusion device, which aims to generate infinite, clean nuclear-fusion-based energy, will be built in March or April in Hefei, capital city of east China's Anhui Province. Experiments with the advanced new device will start in July or August. If the experiments prove successful, China will become the first country in the world to build a full superconducting experimental Tokamak fusion device, nicknamed "artificial sun", experts here said.

The project, dubbed EAST (experimental advanced superconducting Tokamak), is being undertaken by the Hefei-based Institute of Plasma Physics under the Chinese Academy of Sciences. It will require a total investment of nearly 300 million yuan (37 million U.S. dollars), only one fifteenth to one twentieth the cost of similar devices being developed in the other parts of the world.

Controlled nuclear fusion is seen as an efficient way for people to generate infinite, clean energy to offset the dearth of fossil fuels such as oil and coal. After nuclear fusion, the deuterium extracted from one liter of sea water will produce energy equivalent to 300 liters of gasoline. If a device is developed that can withstand temperatures as high as 100 million Celsius degrees and control a deuterium-tritium reaction, it will be as though an "artificial sun" had been created able to supply infinite, clean energy for human beings.

- Trust the Chinese to undercut everybody in prices of everything, including nuclear fusion reactors. Let's also see some EROEI numbers before we buy into the hype of the paragraph above.

(2006-01-23 22:01:44 SGT) [Energy] Permalink

Saudi King to push ties with energy-hungry India

expressindia.com :

Saudi Arabia's King Abdullah visits New Delhi this week to build on steadily improving ties between the world's top oil exporter and India, eager to meet the future energy needs of its booming economy. King Abdullah will be accompanied by strong business and government delegations, including Oil Minister Ali al-Naimi, during the four-day trip starting on Jan 24, the first by a Saudi monarch in 50 years. The King will be in India as part of a four-nation Asian tour that includes China and Pakistan.

Ties between Saudi Arabia, Islam's birthplace, and India, Asia's third-largest economy and home to a huge Muslim minority, have improved incrementally since the early 1990s. The Saudis are looking to deepen economic ties with Asian giants China and India whose energy needs are soaring as their economies witness red-hot growth.

Saudi Arabia accounts for almost a quarter of India's total imports of crude oil of 1.9 million barrels per day. In 2004, New Delhi bought crude worth $6.2 billion from the Saudis. Riyadh, eager to hold on to its share of India's rising oil imports as the Indian economy grows 6-7% in the next decade, says it will continue to be a reliable supplier. "We are committed to supplying India's oil needs, come what may," Saudi Ambassador Saleh M Al-Ghamdi said ahead of the King's visit.

(2006-01-23 21:49:03 SGT) [Energy] Permalink

Energy deal expected on Saudi king's China visit

channelnewsasia.com :

China and Saudi Arabia are expected to sign an agreement on energy cooperation during a milestone visit by Saudi King Abdullah that both sides hope will usher in a new chapter of closer relations. The visit is the first by a Saudi king since the two nations established diplomatic relations in 1990.

The visit by the Saudi king comes at a time when China, the world's second biggest oil consumer, is scouring the globe for more oil to fuel its unprecedented economic transformation. It also comes as Saudi Arabia, the world's biggest oil supplier with the largest known reserves, seeks to diversify its economy and move away from too much dependence on the United States, the biggest oil consumer, analysts said.

"I think this cooperation makes a lot of sense," said a Hong Kong-based oil analyst who requested anonymity. "China has the fastest growing market and Saudi Arabia has the right product to sell ... the US is the biggest market but the US is not the booming market. The US market is saturated, so the growth is slower."

news.moneycentral.msn.com :

Saudi Arabia's King Abdullah arrived in Beijing on Sunday for his first ever state visit. From Beijing, the king will fly to India - which has vied with China for several energy deals - then Malaysia and finally Pakistan. The monarch is traveling with a large business delegation, including Oil Minister Ali al-Naimi.

Saudi Arabia was China's top supplier of oil in the first 11 months of last year, providing 17% of its imports, nearly 440,000 barrels per day (bpd). This was under a third of shipments to the United States over the same period, at 1.43 million bpd.

Gulf states, which produce a heavier type of oil that Chinese refineries are ill-equipped to process, may find it easier to sell to China if they also invest in refineries. Saudi Aramco last year signed a $3.5 billion deal together with Exxon Mobil Corp. and Sinopec , China's top refiner, to expand a refinery in south Fujian province. It is also in talks with Sinopec about investing in a plant in the northern city of Qingdao.

(2006-01-23 21:45:20 SGT) [Energy] Permalink

Rare Tokyo snow strands 10000 at Narita airport

channelnewsasia.com :

A rare snowfall in Tokyo has left nearly 10,000 passengers stranded overnight at Narita airport after about 50 international flights were cancelled. The season's first snowfall in the greater Tokyo region measured 9cm in the centre of the capital, the heaviest accumulation in eight years.

At Narita airport, some 60 kilometres from downtown Tokyo, 51 international flights were cancelled on Sunday as airport workers were unable to remove snow from runways quickly enough. More than 90 other flights were delayed for a night, leaving passengers stuck in the terminal. At Tokyo's domestic Haneda airport, some 100 flights were cancelled on Saturday, disrupting the travel plans of some 14,000 passengers.

It usually snows lightly only a few times a year in the Tokyo region, located on the warmer Pacific side of Japan's main island. Coastal regions have experienced Japan's deadliest winter in more than two decades, with at least 102 deaths recorded by Tuesday, with many of the victims crushed by snow or falling from buildings while clearing snow from roofs.