Matt Simmons, chairman and CEO of Simmons and Company International, which is a private energy investment banker based in Texas, said he believes the world’s oil reserves have already peaked and we are on the downward slide.
“I think basically we are now in the early days of a very serious pending scarcity of oil and natural gas,” he said. “Because we don’t know we are, we are not putting any clamps on demand.”
Simmons has been studying world oil production and reserves for decades. His company helps finance exploration and production.
He predicted - accurately as it turned out - that the North Sea fields would peak between 1998 and 2000. Now he has turned his attention to Mexico, Kuwait and Saudi Arabia, warning that their fields also have hit the downward slide.
“All the major oil fields of the world have peaked and we are going to see soon some precipitous collapses,” he said.
Volume of reserves often overstated
Calculating oil reserves is not an exact science and too often reality disappoints.
It depends not only on the nature of the well but also on the management of its production over time.
The “Cheap Oil Era” is Ending Soon…
Oil prices have fallen 70% since hitting a record $147.27 a barrel in July, which means in just five months, crude has given up all the price gains it made in the past four years.
After such a wrenching plunge, many analysts believe the outlook for the “black gold” remains bleak - and in the short term it certainly is. In the long run, however, dwindling supplies, resurgent demand, and a lack of investment will cause crude oil to double, triple, or even quintuple in price over the next few years.
Russian Gas Flows Still Halted Amid Monitoring Delays
(Bloomberg) — Russian natural-gas shipments through Ukraine to Europe were suspended for a fourth day amid delays in signing an agreement to deploy international monitors.
Czech Prime Minister Mirek Topolanek, who holds the European Union’s presidency, met with Russian Prime Minister Vladimir Putin at his residence outside Moscow to seek a resumption of gas supplies, Russian state-run broadcaster Vesti- 24 reported.
Bulgaria shivers through gas cutoff
SOFIA, Bulgaria, Jan. 10 (UPI) — Frigid Bulgarians scrambled to keep warm Saturday in the wake of a shutoff of natural gas supplies from the Russian utility Gazprom, observers said.
Rise of Russia’s political fortune
In recent years, Russia has enjoyed unforeseen riches as a result of a huge rise in revenues from oil and gas exports. The BBC’s James Rodgers in Moscow reports on what this wealth has done to the country, and what it means for its future.
Iran, Russia agree to swap gas
TEHRAN - Tehran and Moscow has reached an initial agreement to swap gas, Iranian Oil Minister Gholam-Hossein Nozari revealed here on Friday.
The minister said negotiations are underway to reach a final deal.
“The two sides are continuing their negotiations,” Nozari told the Mehr News Agency on Friday.
Based on the agreement Iran will receive gas from Russia in the north and will export the same amount for Russia in the Persian Gulf.
CHINA OIL DATA: 2008 Crude Oil Imports +9.6% - Source
BEIJING -(Dow Jones)- China imported 178.88 million tons of crude oil in 2008, equivalent to an average 3.59 million barrels a day, 9.6% more than in 2007, a person familiar with the data told Dow Jones Newswires on Saturday.
China also imported 38.85 million tons of refined oil products in 2008, up 15% on previous year levels, the person said.
Oil-sector strike in India ends
NEW DELHI - About 55,000 white-collar workers at state-run oil companies called off a three-day strike late yesterday, the petroleum minister said, after causing a severe fuel shortage in India.
Algeria says has implemented OPEC oil cut
ALGIERS (Reuters) - Algeria has cut oil production in line with OPEC policy aimed at propping up sagging prices, the north African country’s energy and mines minister said on Saturday, according to the official APS news agency.
“Algeria has put into effect the reduction of its production in conformity with the quota that it has been assigned by the Organization of the Petroleum Exporting Countries,” the agency quoted the minister, Chakib Khelil, as saying.
Venezuela: Drilling stops in 17 oilfields
The last cut in the oil production undertaken by Venezuela, in accordance with an agreement at the Organization of Petroleum Exporting Countries (OPEC), has made 17 drill rigs in west and east Venezuela to come to a standstill, reported oil-sector labor agents.
Based on the news given by trade union leader Froilán Barrios, only in Boscán field, western Zulia state, a total of 14 rigs have shut down since the last week of December.
Investment guru Eric Sprott is as negative as almost anyone when it comes to the global economy. And that led him to yesterday’s announcement that he is unwinding his molybdenum fund.
Mr. Sprott launched the Sprott Molybdenum Participation Corp. in early 2007 to give investors a unique, publicly-traded vehicle invested exclusively in the silvery-white metal and the companies mining it.
At the time, it seemed like a good idea as the molybdenum (or moly) market was red-hot. Moly is used in high-quality steels with applications in the energy industry. That made it an ideal place for long-term energy bulls like Mr. Sprott, a big believer in the “Peak Oil” thesis.
But in early November, the wheels suddenly came off. After holding around US$33 a pound for more than a year, the moly price collapsed almost overnight to US$10 as the reality of the global recession started to kick in.
Saudi Supertanker Freed by Somali Pirates, Owner Says
(Bloomberg) — The Saudi Arabian oil supertanker Sirius Star, which was hijacked by Somali pirates in November in the Indian Ocean, has been released, its owner said.
All crewmembers are safe and in good health, state-owned Vela International Ltd. said today in an e-mailed statement. The Sirius Star contains 2 million barrels of crude oil.
5 Somali pirates drown with ransom share
MOGADISHU, Somalia (AP) — Five of the Somali pirates who released a hijacked oil-laden Saudi supertanker drowned with their share of a reported $3 million ransom after their small boat capsized, a pirate and port town resident said Saturday.
Utah Student Who Disrupted Oil Bids Says He Can Pay for Tracts
(Bloomberg) — Tim DeChristopher, a 27-year-old economics student, went into a federal government auction last month with a bidding paddle and an idea.
Seeking to disrupt an auction for drilling on more than 150,000 acres of federal land in Utah, he wound up bidding on and winning more than $1.7 million in leases. Companies at the auction included Kerr-McGee, a subsidiary of Anadarko Petroleum Corp., the second-largest independent U.S. oil producer.
Almost a month after the Dec. 19 auction in Salt Lake City, DeChristopher, who attends the University of Utah, is collecting online donations to pay for the leases. He said today he has the initial $45,000 payment and believes that raising the total $1.7 million cost is “feasible.”
Albuquerque Police Abandon Use of E-85
The City of Albuquerque is quietly abandoning part of its push for a greener Albuquerque after finding that E-85 powered vehicles are not all they are cracked up to be.
The city found they cost more to run and to keep running.
Carbon footprint of Britons for few days ‘bigger than annual footprints of poorest’
The average Briton already has already caused more carbon emissions in 2009 than a person in the poorest countries will create all year, anti-poverty campaigners claim.
Carbon market value up 84% in 2008 – analyst
Environmental Finance, 8 January 2009 - The carbon market was worth $118 billion last year, up 84% year-on-year, according to a report by analysis firm New Carbon Finance (NCF).
But the growth rate this year is set to be slower, with the London-based firm predicting that the market’s value, based on transactions, will be $150 billion in 2009, up 27% on 2008.
Harvard’s “Hippo” Jet Heads to Pole to Test CO2 Level
(Bloomberg) — Harvard University is flying a specially equipped jet between the North Pole and South Pole to test the atmosphere for variations in global-warming gases, aiming to improve computer models for predicting climate change.
‘Climate fix’ ship sets sail with plan to dump iron
The largest and to date the most comprehensive experiment to soak up greenhouse-gas emissions by artificially fertilising the oceans set sail from South Africa earlier this week.
The ambitious geoengineering expedition has caused a stir among some campaigning groups, but has the scientific backing of the UK, German, and Indian governments, as well as the International Maritime Organisation.
A second leadership shift on House energy committee signals quick action on climate change
WASHINGTON - A liberal Massachusetts Democrat will take over a House subcommittee that will play a major role in drafting legislation on global warming and other environmental issues.
Rep. Edward Markey, known for his tough stances on environmental issues, will replace Rep. Rick Boucher, a Virginia Democrat who has been friendly to the coal industry. Boucher had chaired the panel eight years.
Sea Level to Rise 1 Meter in 100 Years
Researchers from England, Finland, and the Niels Bohr Institute at the University of Copenhagen, publishing in the prodigious journal Climate Dynamics, say that, by looking back in history and analyzing correlations between periods of warming and the level of the sea, they’ve found that water levels can vary very fast within the relatively-limited time frame of a century.
University of Copenhagen Niels Bohr Institute Center for Ice and Climate geophysicist Aslak Grinsted explains that “Instead of making calculations based on what one believes will happen with the melting of the ice sheets, we have made calculations based on what has actually happened in the past. We have looked at the direct relationship between the global temperature and the sea level 2000 years into the past.”
