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Peak oil is a myth; at least the chance of achieving peak oil any time soon is. It has been well documented that we have vast reserves of hydrocarbons buried beneath the Earth’s surface; huge shale formations, the vast oil fields in Brazil and South America, oil in the Arctic, etc. However maybe we should not throw away the term peak oil just yet, because now it seems as though we could reach peak oil in a geopolitical sense.
Shell offers a prime example where abundant oil reserves are proving far more difficult to develop than previously thought due to troublesome regulations and politics. Back in 2008 Shell paid $2 billion for permits to drill in the Arctic waters off the North Slope of Alaska, and since then it has spent another $5 billion trying to prepare everything for its exploration and drilling campaign. Yet after all that time, and all that money it has still not completed even one well; and it is no secret that they have started to have second thoughts about their entire Arctic adventure.
The truth is that most of the world’s largest unconventional plays are to be found in politically volatile markets. The US is just one example. Following the BP Gulf of Mexico Spill major international oil companies are now very wary of working in US waters, because any accident, no matter how faultless could well prove the end of the company involved.
To find out more on this topic please read a very detailed and interesting article by Matthew Hulbert on Forbes
Charles is a writer for Oilprice.com