Friday, March 26, 2010

$80 Barrel Oil Price Drives Oil Discovery, Production

Update March 31: More evidence here and here that large oil producers have been holding back on production until they were certain that oil prices would stay above $70 a barrel. As long as oil remains close to $80 a barrel, large OPEC and non-OPEC producers can justify the expense of new exploration and production.

Big new oil and gas discoveries by US and Mexico in the waters of the Gulf of Mexico are sparking increases in national oil production for the first time in years.

New discoveries across Africa combined with $80 oil is drawing more foreign producers, including more Chinese producers.

Even countries not known for their oil, such as India and Colombia, are finding new oil thanks to new discovery efforts. In fact, Colombia may overtake its unruly neighbor Venezuela in oil production within 10 years.

New Iraqi reserves and production threaten to drop a glut of oil supply on the global markets. And Iraq has just gotten started.

Brazil is bursting with offshore oil, creating many of the internal problems that oil-rich states are famous for.

Canada is rapidly becoming one of the world's richest hydrocarbon producers, and is making new oil discoveries all the time.

Much of the new oil will cost more to produce, perhaps placing a floor of $60 a barrel under such new production. But only a total idiot expects technology to sit still while there is money to be made. Such price floors will be tested and eventually broken.

The real threat to oil supplies is political -- as in Obama Pelosi reich energy starvation. Having succeeded in beginning to break down the advanced US biomedical industry, the Obama Pelosi reich will eventually get around to every aspect of the US economy. Energy starvation has always been a long term goal of the O P reich. EPA policies declaring CO2 a dangerous pollutant are merely the bare tip of the spearhead of the OP thrust to starving US industries of fuel.

The future of advanced western technologies that could lead to a "singularity" or to "the next level" all depend upon the capacity to bridge the inevitable geopolitical turbulence that is coming. If the western nations lack the "depth" to sustain the losses that rapid and violent change is bringing to the world, they will be lost to the future. It is not a game that can be reset and started over.

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