Energy Renaissance as Supplies Grow and Demand Drops

“[Peak Oil] was once supposed to arrive by Thanksgiving 2005,” the newspaper [WSJ] said. “Then the ‘unbridgeable supply-demand gap' was expected ‘after 2007.' Then it was to arrive in 2011.”


The peak prediction is now sometime between this year and 2020. By next week that could change to 2025. Dire predictions about an oil shortage following an elusive peak have consistently been wrong. Between 2007 and 2009, 1.6 barrels of oil were added to the reserves column for every barrel of oil actually produced.


Oil is being produced in great quantities today in places where only a trickle was flowing a few years ago. Locating tomorrow's oil boomtown is as hard as accurately predicting when the production summit will be reached.

_Newsok

At the same time that the US has increased production it has reduced demand. Peak oil demand in the US was reached in 2005. “We will not see that peak reached again,” said Burkhard, who further explained, “The great recession had a negative impact on oil consumption, but it is not connected to the fall in demand.” That has been brought about by higher fuel economy standards and carbon regulations that were imposed under President Bush in 2007.

...“The decline in demand is a global trend,” said Burkhard. _EnergyRenaissance

Demand for oil is reducing for a number of reasons, including improved efficiency, a growing use of substitutions, and a prolonged depression in the global economy due to uncontrolled government debt and a declining demographic in most advanced economic nations.

But supply is still growing -- thanks to oil prices that have been held high by OPEC policies, energy starvation policies in the advanced world, and a speculative premium based upon many factors -- including corruption in global markets.

Here are more reasons for the growing supplies:

...the demise of oil was greatly exaggerated, even in a state where oil production peaked years ago. Someone forgot to tell energy firms that oil was no longer noteworthy — or profitable.

Oil sands, linked to the controversial Keystone XL pipeline project that would go through Cushing, make Canada the world's second-largest storehouse for oil in reserve. Producing the bitumen crude is made possible by technology and made profitable by higher oil prices.

SandRidge Energy, a five-year-old Oklahoma City firm with its roots in west Texas natural gas wells, told its employees recently that “Oil is our future.” Larger state energy firms known primarily as gas producers have also shifted more resources to oil. That's where the money is.

The Wall Street Journal noted Sept. 17 that the summit point for oil has been quite elastic. “It was once supposed to arrive by Thanksgiving 2005,” the newspaper said. “Then the ‘unbridgeable supply-demand gap' was expected ‘after 2007.' Then it was to arrive in 2011.”

The peak prediction is now sometime between this year and 2020. By next week that could change to 2025. Dire predictions about an oil shortage following an elusive peak have consistently been wrong. Between 2007 and 2009, 1.6 barrels of oil were added to the reserves column for every barrel of oil actually produced.

Oil is being produced in great quantities today in places where only a trickle was flowing a few years ago. Locating tomorrow's oil boomtown is as hard as accurately predicting when the production summit will be reached. _newsok