The End Of "Easy Oil" ('...likely to be a bumpy ride toward cliff's edge')

[Hissyspit]

http://www.alternet.org/stories/60086

The End of 'Easy Oil'
By Michael T. Klare, Tomdispatch.com. Posted August 18, 2007.
Buckle your seatbelt and fill up your gas tank. Our oil future is likely to be a bumpy ride toward cliff's edge.

When "peak oil" theory was first widely publicized in such path breaking books as Kenneth Deffeyes' Hubbert's Peak (2001), Richard Heinberg's The Party's Over (2002), David Goodstein's Out of Gas (2004), and Paul Robert's The End of Oil (2004), energy industry officials and their government associates largely ridiculed the notion. ("Not here at DU, we didn't..." - H'spit) An imminent peak -- and subsequent decline -- in global petroleum output was derided as crackpot science with little geological foundation. "Based on analysis," the U.S. Department of Energy confidently asserted in 2004, " would expect conventional oil to peak closer to the middle than to the beginning of the 21st century."

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The change in outlook is perhaps best suggested by a July 27 article in the Wall Street Journal headlined, "Oil Profits Show Sign of Aging." Although reporting staggering second-quarter profits for oil giants Exxon Mobil and Royal Dutch Shell -- $10.3 billion for the former, $8.7 billion for the latter -- the Journal sadly noted that investors are bracing for disappointing results in future quarters as the cost of new production rises and output at older fields declines. "All the oil companies are struggling to grow production," explained Peter Hitchens, an analyst at the Teather and Greenwood brokerage house. " it's becoming more and more difficult to bring projects in on time and on budget."

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There is, however, a second aspect to peak-oil theory, which is no less relevant when it comes to the global-supply picture -- one that is far easier to detect and assess today. Peak-oil theorists have long contended that the first half of the world's oil to be extracted and consumed will be the easy half. They are referring, of course, to the oil that's found on shore or near to shore; oil close to the surface and concentrated in large reservoirs; oil produced in friendly, safe, and welcoming places.

The other half -- what (if they are right) is left of the world's petroleum supply -- is the tough oil. They mean oil that's buried far offshore or deep underground; oil scattered in small, hard-to-find reservoirs; oil that must be obtained from unfriendly, politically dangerous, or hazardous places. An oil investor's eye-view of our energy planet today quickly reveals that we already seem to be entering the tough-oil era. This explains the growing pessimism among industry analysts as well as certain changes in behavior in the energy marketplace.

In but one sign of the new reality, the price of benchmark U.S. light, sweet crude oil for next-month delivery soared to new highs on July 31, topping the previous record for intraday trading of $77.03 per barrel set in July 2006. Some observers are predicting that a price of $80 per barrel is just around the corner; while John Kildruff, a perfectly sober analyst at futures broker Man Financial, told Bloomberg.com, "We're only a headline of significance away from $100 oil." New disruptions in Nigerian or Iraqi supplies, or a U.S. military strike against Iran, he explained, could trigger such a price increase in the energy equivalent of a nano-second.

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[rzemanfl]

1. Anyone of a certain age saw "Our Mr. Sun" in grade school.

It was all laid out there in the last few minutes of the movie. We did not pay attention.

[terisan]

2. Peak Oil seems like a great positive opportunity for life on the planet. nt

[Tigermoose]

3. It might be the only thing that can save us...

from global warming.