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Key Oil Figures Were Distorted by US Pressure, Says Whistleblower PDF Print E-mail

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Terry Macalister, Guardian UK

Monday 09 November 2009

Exclusive: Watchdog's estimates of reserves inflated says top official.

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

Read more about the potential innacuracy of the latest World Energy Outlook on oil demand and supply by clicking here.

 

(In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. h o t g l o b e has no affiliation whatsoever with the originator of this article nor is h o t g l o b e  endorsed or sponsored by the originator.)

 
The Era of Xtreme Energy: Life After the Age of Oil PDF Print E-mail

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by: Michael Klare

    Tom Dispatch: Introduction

    Talk about roller-coaster rides: the price of a barrel of crude oil, which was still under $20 the week after September 11, 2001, made it to $147 in July 2008, just before the global economic meltdown, only to hit a low of $32.40 early this year. And yet, in recent months, hardly noticed, it's crept back above $70 -- and this with "recovery" barely on the horizon and global industrial demand still muted at best. And that's the good news.

    Surely, as economic activity picks up, oil demand will rise and prices will resume their upward march. And don't be fooled by a spate of announcements, as recently in the Gulf of Mexico, of new oil discoveries, as Michael Klare, author of the invaluable book Rising Powers, Shrinking Planet, indicates. If there is a surge in industrial demand globally, recent discoveries will have little impact on the growing supply of energy.

    "It's still the one," energy expert Daniel Yergin says of oil in the current issue of Foreign Policy magazine. Yergin, author of a classic history of oil, The Prize, claims that petroleum will dominate the global energy equation for decades to come. Look elsewhere and you can find sprightly scenarios for energy futures based on climate-friendly renewable energy sources. As Klare makes painfully clear, however, there's a third way -- and that is distinctly not good news. We are going to enter an age of Xtreme energy, he suggests, and the last-ditch efforts to keep our world on its normal course are likely to devastate the environment, accelerate climate change, inflict widespread pain, and create global conflict. It's not a pretty picture. Tom

    Michael T. Klare | The Era of Xtreme Energy: Life After the Age of Oil
    By Michael T. Klare

    The debate rages over whether we have already reached the point of peak world oil output or will not do so until at least the next decade. There can, however, be little doubt of one thing: we are moving from an era in which oil was the world's principal energy source to one in which petroleum alternatives -- especially renewable supplies derived from the sun, wind, and waves -- will provide an ever larger share of our total supply. But buckle your seatbelts, it's going to be a bumpy ride under Xtreme conditions.

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The Current Oil Shock: No Relief in Sight PDF Print E-mail

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by: Dilip Hiro, TomDispatch.com

    When will it end, this crushing rise in the price of gasoline, now averaging $4.10 a gallon at the pump? The question is uppermost in the minds of American motorists as they plan vacations or simply review their daily journeys. The short answer is simple as well: "Not soon."

    As yet there is no sign of a reversal in oil's upward price thrust, which has more than doubled in a year, cresting recently above $146 a barrel. The current oil shock, the fourth of its kind in the past three-and-a-half decades, and the deadliest so far, shows every sign of continuing for a long, long stretch.

    The previous oil shocks - in 1973-74, 1980, and 1990-91 - stemmed from specific interruptions of energy supplies from the Middle East due, respectively, to an Arab-Israeli war, the Iranian revolution, and Iraq's invasion of Kuwait. Once peace was restored, a post-revolutionary order established, or the invader expelled, vital Middle Eastern energy supplies returned to normal. The fourth oil shock, however, belongs in a different category altogether.

    Nothing Like It Before

    Unlike in the past, the present price spurt has been caused mainly by global demand for energy outstripping available supply. Alarmingly, there is no short-term prospect that supply will match demand. For a commodity like petroleum that underwrites and permeates every aspect of modern life - from fuel to fertilizers, paints to plastics, resins to rubber - "balance" requires a 5% safety factor on the supply side.

    At present, however, spare capacity in the oil industry is less than 2%, down from more than 6% in 2002. As a result, the price of oil responds instantly to negative news of any sort: a threat against Iran by an Israeli cabinet minister, a fire on a Norwegian offshore drilling rig, or an attack on an oil facility by armed rebels in Nigeria.

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G8 Ministers Vow New 'Green' Efforts PDF Print E-mail

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by: The Associated Press

    Aomori, Japan - Faced with record-high oil prices, the world's leading economies and oil consumers have pledged greater investment in energy efficiency and green technologies to control their spiraling thirst for petroleum.

    In a joint statement, energy ministers from the Group of Eight countries - joined by China, India and South Korea - also urged oil producers to boost output, which has stalled at about 85 million barrels a day since 2005, and called for cooperation between buyers and producers.

    But with little prospect for a production surge soon, the focus of Sunday's meeting in Japan was on what wealthy nations should do to rein in consumption, while reducing carbon emissions blamed for global warming.

    "We also have to address too the demand side of the equation," said John Hutton, Britain's business secretary. "We will do that through new measures to improve energy efficiency (and) accelerate our moves to a new, low-carbon form of energy generation."

    The 11 nations account for 65 percent of the world's energy consumption and face record-high oil costs. Prices gained 8 percent Friday to US$138.54 on the New York Mercantile Exchange.

    Energy experts say most producers have little ability to expand output. The exception is Saudi Arabia, which could increase output by about 2 million barrels a day.

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New Fears on Long-Term Global Oil Supplies PDF Print E-mail
Thursday 22 May 2008

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by: Graham Bowley and David Jolly, The International Herald Tribune

Oil and gas prices continue to skyrocket as oil production limits become clear.

 

    Worries that world oil demand will outstrip global supplies intensified on Thursday, sending ripples through the global economy as oil prices leaped above $135, a new record high.

    The price spike occurred overnight, and by Thursday morning oil had fallen back slightly to $132.87, down 30 cents from its close on Wednesday.

    But the leap capped a rally that has seen oil rise nearly $5 a barrel in two days, underscoring the dire implications of the current price run-up for businesses across the globe.

    Ford Motor Company, the American auto manufacturer, said on Thursday it would cut vehicle production for the rest of this year and fall short of reaching profitability in 2009, a long-held company goal. In a statement, a top Ford executive said rising gasoline prices "are having a tremendous impact on our sales, our manufacturing operations and our profitability."

    Meanwhile, Europe's biggest airline, Air France-KLM, warned of a profound reshaping of the world airline industry caused by what it called the "explosion" in the price of oil. And American Airlines said on Wednesday that it would slash flights and begin charging passengers to check bags, part of a company effort to cut costs in the face of skyrocketing fuel prices.

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Peak Oil and Politicians PDF Print E-mail

Read more of Kelpie Wilson's columns

   
    By Kelpie Wilson
    t r u t h o u t | Environment Editor

    Saturday 17 May 2008

    In 1956, M. King Hubbert, a petroleum geologist with Shell Oil, presented a paper to the American Petroleum Institute that predicted US oil production would peak in the early 1970s and then follow a declining curve, now known as Hubbert's curve. But Hubbert almost didn't get to give his paper. He got a call from his bosses at Shell, who asked him to "tone it down." His reply was that there was nothing to tone down. It was just straightforward analysis. He presented the paper, unedited. You can read the whole story here.

    Since that time, the oil industry and its political supporters have done everything they can to tone down the message that oil is a finite resource and that we will run out of it some day. Why would they do that? To further the short-sighted, short-term pursuit of profit. In 2004, Shell finally got caught in a lie about the size of its oil reserves. The company had inflated the stated size of its oil reserves to keep stock share prices high because who wants to invest in a company - or an industry - that is going the way of the dinosaurs?

    Since 1956, the world economy has proceeded under a sort of oil company spell that has woven the illusion all around us that oil depletion is so far into the future that we don't need to worry about it. That belief was essential to support the aim of an endlessly growing economy.

    There have been a few hitches in that strategy. In 1972, just as oil production in the United States reached its all-time peak, a group of computer modelers from MIT released a study called "The Limits to Growth." They predicted a steep decline in natural resources of all kinds. Because reserve numbers for many minerals, including oil, were not accurately known back then, they looked at different scenarios. Some showed us running out of oil before 2000 and some showed the peak occurring toward the middle of the 21st century.

    The pro-growth faction reacted quickly and scathingly to the idea that there could be limits to growth. The MIT scientists were treated like Cassandras in academia and in the press.

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