Here is a link to an interview with Matthew Simmons, author of the book “Twilight in the Desert”. He is an energy analyst. His interview is lengthy, and contains some personal views, and misinformation. However, he makes some valid points that my contacts in the oil and gas business have verified.
Link: http://www.financialsense.com/transcriptions/Simmons.html
The major oil pools, easily available and pressurized, are old, and have been exploited for years. New technology that keeps the reservoirs pressurized, and producing at peak output (like fracking and water injection) is rapidly depleting these reservoirs.
This is not to imply that we are running out of oil. Some areas of known reserves, like Gorges Banks off Nova Scotia, and most of the Arabian Sea, are too politically sensitive for current exploitation. Efforts in the deep ocean are just now ramping up. The world still has great reserves of oil.
What is in decline is cheap oil. A lot of the new discoveries are also heavy or contaminated crude, requiring additional refinery steps. CHEAP, EASILY REFINED CRUDE OIL IS IN DECLINE. I especially like the references in the article about cost per pint of crude. Crude oil is historically a very undervalued product. Our “sticker shock” at the price of crude oil and refined products is a result of the lack of information about this issue in the mainstream press.
The cost of crude oil and refined products will go up. There is no war, no governmental decree, and no protectionist policies that will change this fact.
Link: http://www.financialsense.com/transcriptions/Simmons.html
The major oil pools, easily available and pressurized, are old, and have been exploited for years. New technology that keeps the reservoirs pressurized, and producing at peak output (like fracking and water injection) is rapidly depleting these reservoirs.
This is not to imply that we are running out of oil. Some areas of known reserves, like Gorges Banks off Nova Scotia, and most of the Arabian Sea, are too politically sensitive for current exploitation. Efforts in the deep ocean are just now ramping up. The world still has great reserves of oil.
What is in decline is cheap oil. A lot of the new discoveries are also heavy or contaminated crude, requiring additional refinery steps. CHEAP, EASILY REFINED CRUDE OIL IS IN DECLINE. I especially like the references in the article about cost per pint of crude. Crude oil is historically a very undervalued product. Our “sticker shock” at the price of crude oil and refined products is a result of the lack of information about this issue in the mainstream press.
The cost of crude oil and refined products will go up. There is no war, no governmental decree, and no protectionist policies that will change this fact.
