Energy / Crude Oil

• The Relationship between Peak Oil and Peak Debt - Part 2

  In Part 1 of this post, I pointed out that an economy is closely linked with the resources that underly it. Because of this, if there is really is a limit that prevents oil supply from rising endlessly, then there is also a limit that prevents debt from rising endlessly. I talked about seeing a two-way link between peak oil and peak debt: 1. Peak oil tends to cause peak debt. This is what I discussed in Part 1. 2. Once debt growth peaks (shifts from growth to decline), we can expect a feed-back loop that will tend to make…

• The Relationship Between Peak Oil and Peak Debt - Part 1

  There is really a two-way link between peak oil and peak debt: 1. Peak oil tends to cause peak debt. Some will argue with me about this, because they believe it is possible to decouple economic growth from energy growth, and in particular oil growth. As far as I am concerned, though, this decoupling is simply an unproven hypothesis–the normal connection is that a flattening or decline in energy supply causes a slowdown or actual decline in economic growth, and this slowdown causes a shift from an increase in the amount of debt, to a decrease in the amount of…

• South Sudan - The World's Newest, Fragile, Oil-Rich Petrostate

  Saturday, 9 July saw an event unusual in global politics - the emergence of a large Christan black petrostate, 90 percent of whose inhabitants live below the poverty line on less than a dollar a day. Like many developments in Africa, this one comes soaked in blood, the result of a 2005 peace deal that ended a half a century of civil war which left two million dead. The largely Christian people of southern Sudan voted last January almost unanimously to split from the Arab-Muslim-dominated north. The festivities tomorrow in Juba should prove quite interesting, as Government of South Sudan…

• Ambush in the Oil Market

  The most significant development in the financial markets during my recent sojourns in Europe was the International Energy Agency’s shocking release of strategic petroleum reserves. Unprecedented during peacetime, the move caught oil traders completely by surprise and prompted an immediate $6 drop in crude prices. The howls of leaked information and insider trading were so loud that they could be heard in the distant recesses of the Swiss Alps. This is what you usually get when several leading players lose a huge chunk of money overnight. The move was orchestrated by President Obama’s White House, and quickly found several willing…

• Saudi Arabia Using Oil as an Economic Weapon Against Iran

  Saudi Arabia fears Iran's pursuit of nuclear weapons, and may flood the market with its oil reserves to bankrupt Tehran Saudi Arabia and Iran have been in a bitter dispute over the last several weeks.  Iran successfully blocked an effort by OPEC nations to release excess oil reserves into the market to ease high prices and stabilize the world economy.  In response, Saudi Arabia decided to act against OPEC and release its own reserves.  In no uncertain terms, a bitter feud is brewing between the two oil-rich nations, and Saudi Prince Turki Al-Faisal has stated that the country is in…

• Releasing Oil From the SPR - A Desperate Economic Fix as QE2 Comes to an End?

  The International Energy Association (IEA) announced a plan on Thursday last week to make 60 million barrels of oil available to the market over the next month from the Strategic Petroleum Reserve (SPR), in response to the disturbance in supplies from Libya. Half of this oil is to come from the SPR of the United States; the rest is to come from SPRs of other members of OECD. Both the amount and the timing of the release are strange. The amount of the release is equivalent to 2 million barrels a day. This is actually more than the Libyan disruption took…

• What is Obama Trying to Achieve with Thursday’s Shocking Oil Announcement?

  I’m surprised by the move by the President and the IEA. What’s this about? Is it about the price of oil? Before the announcement WTI was sitting around 95. That’s a solid $20 lower than it’s peak eight weeks ago. Why would Obama & IEA act today? A very big price adjustment has already been made. If the circumstances were different and the price of WTI was through $120 I might have agreed to this. But why make a splashy show now when no show is required? There is more to this than meets the eye is my conclusion. Is…

• Oil Recovery Techniques: Using Microbes to Recover Trapped Oil

  The financial crisis of 2008 and the high gasoline prices that have haunted consumers since has the Peak Oil debate pressuring enhanced oil recovery. Today there are many countries talking about the long-term impact that the consequences of Peak Oil might have on their economies and world relations. Discussion is addressing how best to reduce the serious impact and consequences of a world experiencing the situation of not having enough affordable oil to meet demand. Discussion in the United States, the United Kingdom, Canada, Australia, Sweden and many others consider the concept of Peak Oil in some description or other,…

• Rapidly Increasing Chinese Oil Demand

  Stuart Staniford notes that the number of trucks and passenger vehicles in China has been growing at about 23% each year.Vehicle growth rates for U.S. and China. Source: Early Warning.You don't have to extrapolate that too far into the future to come up with a pretty scary picture.Number of vehicles in U.S. and China. Source: Early Warning.Is that a silly extrapolation? Stuart notes that the plot for 2015 would still leave the U.S. with 7 times as many vehicles per person as China. And the level of oil consumption per person in China today is 1/3 the current oil consumption…

• Peak Oil and our Uncertain Future

  The world is beginning to look a lot like the August of 1914 or perhaps the summer of 1939 all over again. This time instead of the great powers of central Europe dragging the rest of us into a European affair, it seems that nearly every corner of the earth is facing some sort of imminent disaster that could combine into a very unpleasant situation. In America, where we have been living beyond our means for decades, the time has come to pay the piper. Trillion dollar deficits, rising unemployment, printing of money, $4 gasoline, a weakening dollar and entitlements…