Sunday 01
April
The Oil
Depletion Analysis Centre
1/ Turning Off
the Taps - Is Russia About To Cap Its Oil Production?
(
2/ Iran: We will know
soon… (Global Public Media [Richard
Heinberg], Tue 27 Apr)
3/ Labour and Skills
Crisis Could Stall Oil and Gas Investment Boom
(Booz Allen Hamilton, 24 Aug 2006)
4/ World Oil Production
Close To Peak (Science Daily, Fri 30 Mar)
5/ Shell Oil exec urges
policy change (Montgomery Advertiser, Fri 16 Mar)
6/ New Book: The Last
Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man
7/ Branch of US
Government Releases Report On Peak Oil
(ODAC Bulletin Board, Sat 31 Mar)
Back issues of ODAC News: click here
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1/ Turning Off the Taps - Is
http://www.russiaprofile.org/page.php?pageid=Business&articleid=a1175260843
Comment: ODAC discusses the likely
consequences of Russia/Putin capping Russian oil production.
Article:
There are however two issues that raise doubts
regarding
Secondly, President Vladimir Putin is thinking of
capping Russian oil production. In this month’s issue of Petroleum
Review, Chris Skrebowski reviews the London-based Energy Institute’s
International Petroleum Week which was held in February:
... So
In summary, if and when
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2/
http://globalpublicmedia.com/richard_heinbergs_museletter_180_iran_we_will_know_soon
Comment: Richard turns his attention
to what some think is the imminent attack on
Article: For the past two years or so
informed commentators (including Seymour Hersh and
Scott Ritter, among others) have been predicting a
As many have pointed out, an attack could have
cataclysmic implications for the region, for the world economy, and not least
for the oil import-dependent and nearly bankrupt US. Recently Rolling Stone
magazine convened a panel of experts to assess the situation in
Recent crucial events include the passing of the
UN-imposed deadline for Iran to halt uranium enrichment, the stationing by the
US of two aircraft carrier battle groups—the Eisenhower and the Stennis—in the Persian Gulf, a meeting in Baghdad
attended by delegations from both Iran and the US, and the imposition of
toughened economic sanctions by the UN Security Council.
The conjunction of the negotiations in Baghdad over
regional issues (the US cannot extricate itself from Iraq without help from
Iran and Syria) with the successful drive for increased UN economic sanctions
(a drive led, of course, by the US) suggests that conflicting policies are
being pursued in Washington. This appearance may result from an intentional
effort to pressure the Iranians at the bargaining table. However, another
interpretation of the situation is gaining ground among curious
observers—that there is no single pilot steering the
... If an attack does ensue, the immediate
consequences could be moderate to catastrophic—with the moderate effects
being more likely, since everyone has had time to think through the various
scenarios and is likely to follow through on scripted actions and responses.
The longer-term prognosis is not as favorable, as
those scripted responses go only so far. The
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3/ Labour and Skills Crisis Could Stall Oil and Gas Investment Boom
(Booz Allen Hamilton, 24 Aug 2006)
http://www.boozallen.com/capabilities/Industries/industries_article/10839857
Comment: ODAC News has covered this BAH report before,
via media articles, but this is a link to the actual report (free), released
last August 2006. It spells out why a shortage of workers in the oil and gas
industry is likely to be a long-term problem (10 years minimum). Figure B says
it all. A relatively short and easy read.
Article: From the industrial platforms of oil rigs to
air-conditioned design offices, the oil and gas industry is confronted with a
shortage of brawn and brains so severe that it threatens to stall exploration
and production growth around the world. In recent years while investment levels
have been growing by 10 percent per annum, the industry has shrunk its direct
labour force and diluted the quality of skills available (see figure A).
The talent challenge is not new. At the end of the
eighties, skills shortages in the North Sea oil and gas industry hit the
headlines, the close of the nineties saw major lay-offs particularly in the US,
but it is over the last 12 to 18 months that a confluence of events, including
oil prices, planned investments and industry demographics have stretched
industry resources globally to breaking point.
... At present, the average employee working for a
major operator or service company is 46 to 49 years old, according to the
Interstate Oil and Gas Compact Commission (IOGCC) in the
“With the average retirement age for the
industry being 55 years, it is obvious that the industry faces a crisis in the
next 7 to 10 years as more than half of the employee base leaves the work
force,” said the commission’s Blue Ribbon Task Force.
... Further, Douglas C. Nester, CEO of F-W Oil
Exploration, notes:
“Our ability to increase the workforce and
replenish the experience base is very limited. Twenty years of contraction,
including the loss of more than 500,000 employees, has deterred a new
generation of potential workers from entering our business.”
... Those let go are gone for ever and short-term
consulting or rehires are never quite the same. It takes a minimum of 3 years
to develop basic industry operating competence and 10 years plus in many
professional disciplines. There is little hope of reinforcements in the near
future from traditional sources. Today, there are some 1,700 people studying
petroleum engineering in 17
... In new investment hot-spots, such as
... Continuing overheating across many areas of the
oil and gas industry indicate that the labour shortages are here to stay.
... There are too few experienced people across the
industry to support operations, growth and the execution of all major projects
planned.
Conclusion
Faced with one of the biggest periods of expansion in
its history, the global oil and gas industry is already being held back by its
failure to attract, recruit and retain highly skilled staff. This is true from
rig workers to senior scientists and engineers. Through short-term thinking and
a belief that required staff can be bought, the oil and gas industry has
stretched its resource base to breaking point.
Some companies have attempted to get around the crisis
by poaching talent from other firms or leaning heavily on the “old
hands”, but these are at best stop-gap measures...
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4/ World Oil Production Close To Peak
(Science Daily, Fri 30 Mar)
http://www.sciencedaily.com/releases/2007/03/070330100802.htm
Article: In a worst-case scenario, global oil production
may reach its peak next year, before starting to decline. In a best-case
scenario, this peak would not be reached until 2018. These are the estimates
made by Fredrik Robelius, whose doctoral dissertation
estimates future oil production on the basis of the largest oil fields. The
dissertation will be publicly defended at
Fredrik Robelius bases his
forecasts on studies of global oil reserves, historical production, and new
finds. He focuses on the very largest oil fields, so-called giant fields, which
produce a total of at least 500 million barrels of oil.
Giant fields comprise only about one percent of all
oil fields in the world, but they nevertheless account for more than 60 percent
of total production. Unfortunately, the trend is heading downward when it comes
to new giant-field discoveries, both in terms of the number of fields and the
volume of the fields located. The majority of the largest giant fields are
found around the
“The dominance of giant fields in global oil
production supports the thesis that they will be crucial to what future
production will look like," says Fredrik Robelius.
... To be sure that the future production of a field
will wind up inside the interval of the model, Robelius
used both pessimistic and optimistic estimates. Then he combined the results
from the model with field forecasts for deep-water production, new finds, oil
sand in
“All cases studies show that global oil production
will begin to drop off at roughly the same time as the giant fields. According
to the most pessimistic scenario, the peak will be reached in 2008, whereas the
most optimistic scenario, assumed to follow a 1.4-percent annual increase in
demand, places the peak in 2018."
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5/ Shell Oil exec urges policy change
(Montgomery Advertiser, Fri 16 Mar)
http://www.montgomeryadvertiser.com/apps/pbcs.dll/article?AID=/20070316/BUSINESS/703160318/1003
Article: … Hofmeister [The president of Shell Oil
Co., John Hofmeister] predicted
gas prices will continue to increase unless supply or demand pressures are
relieved.
He said an energy crisis is on the horizon because
crude and natural gas are more costly and harder to obtain, and petroleum from nontraditional sources, such as oil shale or oil sands,
can't meet demand.
He said that shortage will make way for alternative
energy sources, such as biofuels, wind, sun, hydrogen cells and nuclear
power…
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6/ New Book: The Last Oil Shock: A Survival Guide to the
Imminent Extinction of Petroleum Man
David Strahan's new Peak Oil book, The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man, has just been published. David spent two years writing and researching the book. In addition to covering the basics of Peak Oil, it also covers political issues - why is it that Peak Oil is such an obvious problem to the Peak Oil community, but politicians and business are not interested? If you buy the book from Amazon (UK), you get 40% off the normal retail price (see the LastOilShock website, below). Synopsis: "This may be the most important book you or anyone else will read in the next fifty years. Assuming humanity survives that long. Draining the lifeblood of industrial civilization, the terminal decline of oil and gas production will spark a crisis far more dangerous than international terrorism, and just as urgent as climate change. World leaders know it, so why aren't they telling? The last oil shock is the secret behind the crises in Iraq and Iran, the reason your gas bill is going through the roof, the basis of a secret deal cooked up in Texas between George Bush and Tony Blair, the cause of an imminent and unprecedented economic collapse, and the reason you may soon be kissing your car keys and boarding pass goodbye. David Strahan explains how we reached this critical state, how the silence of governments, oil companies and environmentalists conspires to keep the public in the dark, what it means for energy policy, and what you can do to protect yourself and your family from the ravages of the last oil shock."
The Last Oil Shock website
The Last Oil Shock interactive depletion atlas
Video - The Last Oil Shock on YouTube
Book review : The Last Oil Shock by David Strahan by James Howard, PowerSwitch
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7/ Branch of US Government Releases Report On Peak Oil
(ODAC Bulletin Board, Sat 31 Mar)
Article: Although the US Government itself does not recognise Peak Oil as an imminent problem, a branch of it has just released a report on the issue. The US Government Accountability Office (GAO) issued a peak oil report, CRUDE OIL - Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production on 29 March 2007 that warned peak could occur any time between now and 2040 and that the US government was totally unprepared. From the report’s Conclusion:
“The prospect of a peak in oil production presents problems of global proportion whose consequences will depend critically on our preparedness. The consequences would be most dire if a peak occurred soon, without warning, and were followed by a sharp decline in oil production because alternative energy sources, particularly for transportation, are not yet available in large quantities. Such a peak would require sharp reductions in oil consumption, and the competition for increasingly scarce energy would drive up prices, possibly to unprecedented levels, causing severe economic damage.”
What makes it more difficult for the US Government, politicians and industry to ignore this report is that it comes from the GAO. From Wikipedia:
"The Government Accountability Office (GAO) is the non-partisan audit, evaluation, and investigative arm of Congress, and an agency in the Legislative Branch of the United States Government. The GAO was established by the Budget and Accounting Act of 1921. This Act required the head of GAO to "investigate, at the seat of government or elsewhere, all matters relating to the receipt, disbursement, and application of public funds, and shall make to the President...and to Congress...reports (and) recommendations looking to greater economy or efficiency in public expenditures". According to GAO's current mission statement, the agency exists to support the Congress in meeting its Constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people."
At least one spokesperson has said in the past that the
The full report (PDF, 1.1 Mb)
The Energy Bulletin website has lots of other useful links, including video of Matt Simmons discussing Peak Oil on CNBC.
The report was instigated by US Representative Roscoe Bartlett,
well known in the
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