Nodding donkey pumping an oil well near Sarnia, Ontario (Photo credit: Wikipedia)
Don’t listen to all the PR hype about oil running out. It is designed to frighten you into believing that you have no choice but to pay the ridiculous high prices at the fuel pump for which the Treasury takes a hefty 80% in duty, without which the British economy would INSTANTLY grind to a halt.
Oil, running out? Oh contraire my friends. There is a glut of crude heavy & light oil, and I’m not talking about black gold from The Middle East. New oil fields are being discovered further afield and on a regular basis.
Examples of new oil fields with a billion barrels plus:
Brazil, Venezuela, Kazakhstan, Azerbaijan, Turkmenistan, Nigeria, South Sudan, Columbia, Equatorial Guinea, The Falklands, Antarctica (approx. 90 billion barrels of oil & 1,678 trillion cubic feet of gas). The USA are supposed to have one hundred years worth of oil reserves under the Alaskan ice, but why are they so slow to bring it up?
When was the last time you heard or read anything about Algeria? I surmise there is a press blackout imposed. Why, because the country is so rich in Natural Gas and oil, no one involved wants to rock the boat. Algerian oil reserves= 19 BILLION barrels. Natural Gas product= 78 billion cubic metres. Just three oil companies with a foothold in Algeria are BP, Spain’s Repsol and Norway’s Statoil, but there are many, many more. Dow Chemicals, GE (General Electric) and Halliburton have a footprint there too. It is bonanza time in Algeria. Christ, there is even a joint US/Algerian Business Council!
Furthermore, with new technology oil companies are able to return to abandoned wells where oil was thought to be too far down or too difficult to extract, and now extract every last drop.
Ah yes, but what about increased use of oil by emerging countries, e.g. India and China? (Strictly speaking China has already emerged). As China makes everything for the West, so there consumption of oil will increase dramatically. Not necessarily so. Currently, with declining Western economies, China is closing factories left, right and centre. She is also swapping arms for oil in Kartoom (Sudan).
Reliant upon computerised ‘engine management systems’, fuel-efficient vehicles have approximately 20% less moving parts to vehicles thirty years ago, thus fewer parts require lubrication (oil).
Oil producers follow the same business practice as DeBeers. Have you ever asked yourself why diamonds are so damn pricey, after all, they are not particularly rare, nor is there a gem shortage. Indeed, along the Ivory Coast you can still occasionally pick up rough diamonds between your toes. Diamonds retain there price because the world’s supply is being hoarded, as with oil. My guesstimate is, at current production levels and new finds, we have enough crude oil for…for…forever.
Back to the price of a barrel of oil, currently $100. Of course one must take into account such things as the cost of research & development, and cost of drilling and transportation, but speculation and greed play an vital part in ramping up the price of oil to you and I.
Oil…running out…don’t you believe it! There is more likely to be a shortage of good, clean drinking water long before there is a shortage of oil.