Report: When Economy Picks Up, A New Energy Shock is Likely
Come on, you didn't really think this cheap gas lull was going to last, did you? Better tune up those bicycles!
Sharp reductions in investments and low oil prices could curb future supplies by almost eight million barrels a day within the next five years, according to a study scheduled for release Friday, the latest warning that the world could face a new energy shock when the economy picks up.
The report by Cambridge Energy Research Associates, an oil consulting firm, said that the potential drop in production capacity is a “powerful and long-lasting aftershock following the oil price collapse.”
The global slowdown has forced oil companies to slash their investments, postpone or cancel expansion plans, or delay drilling in many corners of the world. While some of the biggest companies, like Exxon Mobil and Royal Dutch Shell, say they will keep their investments unchanged this year, many other producers are curbing investments because of the crisis.
The report says about 7.6 million barrels a day of future supplies are “at risk” of being deferred or canceled, like heavy oil or deepwater projects, and which could bring total supplies to 101.4 million barrels a day by 2014. Last year, the group projected that capacity would rise to 109 million barrels a day by then.
“Seven consecutive years of rising oil prices — unprecedented in the history of the oil industry — have come crashing down, thus burying the notion that the commodity price cycle was a historical relic,” said the report, a field-by-field study of production trends.
Many experts have voiced even darker concerns in recent months. Christophe de Margerie, the chief executive of French oil company Total, recently said that producers would find it challenging to bolster supplies even to 90 million barrels a day by the middle of the next decade as projects get canceled.
Oil prices have fallen by 63 percent from their peak of $147 a barrel last summer. They are now trading around $54 a barrel after OPEC producers curbed supplies to prevent a price collapse.
But even at this level, many producers warn that oil prices remain too low to sustain increased investments.
before the greed re-awakens
________________
common sense matters as much as truth
So the move to green energy becomes more urgent and cost effective. Good.
does not become president and
rip the solar panels off the whitehouse.
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common sense matters as much as truth
That was my first thought too.
Say what you mean. Mean what you say. But don't say it mean.
Gas prices are already on the way up...
Nothing else went down along the way, didja notice?
When the gas prices went up, the price of everything went up.
When the price of gas went down, the price of everything stayed up.
Greed never sleeps, babeez!
has decided in it's infinite wisdom that it can take the ideas from both the Repigs and the Dems. They are increasing borrow spending monstrously, while at the same time cutting taxes. Double the amount for corporations. And if that isn't enough, they are harmonizing our provincial tax with the federal tax, meaning EVERYTHING will go up in price. First targets this week, were cigarettes and booze. Wow. Am I shocked.
The political response to recession is laughable. Increase costs to everyone BUT the corporations, and then bail out the corporations. If it wasn't so damn tragic, it would be enough to make sane people buy guns and climb a clocktower.
All the more reason to move to twenty-first century fuels.
Ditch the fucking fossil fuels, or prepare to become fossils.
In other words, if they aren't making billions in profit, they will hang onto their well deserved fraudulent cash. Nice. Well, if the low price is scaring them from spending, howz about a little "tax the shit out of them" for awhile and see how that spurs investments?
When is there any news out of the oil industry that isn't bad for the consumers....Oil running out expect higher prices. $100 per barrel coming. $200 per barrel coming. And now low prices will hurt new investment, production efficiencies and future supplies, thus expect higher prices.
What about their record profits. Can't those monies be used for investment?
I thought record profits were partially due to lack of new investment opportunities because all the easy oil is discovered. Then record profits were due to record consumption. Then consumption went down and new record profits were realized.
Poor oil companies. They're always in a jam.
I wish I could stay on point when I'm this angry.
Looks like 8:30 to 9:30 PM Eastern.
http://www.commondreams.org/headline/2009/03/...
The people of privilege will always risk their complete destruction rather than surrender any material part of their advantage." J.K. Galbraith
When consumer debt is erased. When government stops rewarding evildoers.
IOW, not during our lifetimes.
See, when there is actual competition, lower commodity price wouldn't translate into refusal to invest. But thanks to consolidation, the oil companies are not only too big to fail, they're too big to give a rat's ass what you want.
Now would be a great time to do some of that refinery maintenance that always seems to drive up the price of gasoline in the summer.
Aren't monopolies great?
For the monopolists.
So are completely free and un-manipulated markets.
For both buyers and sellers.
Trashing capitalism is relatively easy.
But let's be sure, if we are sure, why capitalism is awful compared to the alternatives.
We're still at price levels never seen before the oil baron Bush entered office. All those poor, poor, oil companies. Being forced to live on the profits that they made 8 years ago. It's not like, ya know, they were making money when gas was 20 a barrel. 50 is not enough. 100 is more like it.
Once having monopolies, it then relies on the State to preserve and protect them by erecting regulatory barriers to entry into the marketplace.
There is no such thing as a "free market." All markets are managed or regulated in ways that prefer some outcomes or operators.
big government, financed by rich capitalists, is the central problem.
American society would work quite well without big government and big capitalism. Look at a small, isolated American community. You have to go way out of the way.
That'll be the story all Spring & Summer long - when gas is up to $3.00 - $3.50. They'll remind us that it's still $x or x% cheaper than 1 year ago, and blame the increase in prices on refinery capacity, Nigerian jitters, China's economic growth, Summer demand caught us by surprise, etc.
Man smart, woman smarter.
the reFineries have slowed production of gasoline and other distillants. why? to control volume/inventory.
of course they've been doing this for years. Rockefeller was the king of price controling/fixing. he did it with the kerosene industry for years. then it went to gasoline. NOW i believe it's somewhat more sophisticated because crude is based on the dollar and commodities futures are traded and effect cost.
i believe we will see much higher gasoline prices depending what region of the country you live in within
1.5 to 3.0 years. now's the time to purchase a hybrid.
... keeps coming up with what seem like "outside forces" that cause the price to increase or decrease. BS. Big Oil functions as a monopoly. They essentially control a spigot through which they can control price.
Q) Why did gas prices triple?
A) Because they could get away with it.
Q) Why did they fall again?
A1) Because of Big Oil's fears that they would be blamed for a world wide economic collapse.
A2) Because of a threatened windfall profits tax.
Whatever happened to that windfall profits tax you promised, Mr. President?
So Exxon gets to keep the $1 billion per week profit it gouged us for? Real incentive not to do it again, huh?
I guess we'll put the windfall profits tax on the shelf next to refusing telecoms immunity, closing Guantanamo, getting out of Iraq, ending the Bush tax cuts, returning transparency in government, respect for the rule of law, and a host of your other "promises."
Corruption favors the wealthy.
in one easy lesson!
http://z.hubpages.com/u/144774_f496.jpg
Kind of funny-im actually profiting quite nicely off the rise in gas prices-and I predict ill make a lot more as summer comes closer.
UGA is a great etf! I know im probably going to get slammed for taking advantage of it-but its going up anyway-why not invest and make money from it?
Beware of contango!
ETFs are fun, but not meant as LT investments. I made some pretty decent coin on FAS (3x leverage - Financials) a couple weeks back, and I'm playing URE (2x real estate) right now. I'm with you - if it swells, ride it!
Man smart, woman smarter.
I read in the last week or so, hybrids like Priuses are languishing on car lots, and what's flying off again are SUV's and trucks.
Diabolus est Deus Inversus
The wife's Prius hasn't exploded on $2 gas yet. We're just saving a dollar per gallon this year instead of two last year. Yeah, want to bet that won't change again?
The problem with something like an Expedition is that it's too big to drive but too small to live in. Whole lot of idiots overcompensating for other deficiencies thinking aggressively. They figure they can ram somebody else and be the most likely to walk away. What they don't have the brains to research is that SUVs are relatively _unsafe_ in single car crashes. Some pickups are even worse. I believe the Prius is 5 star/4 star, and unless they've repealed the laws of physics, _nothing_ is going to protect you from going 60-0 in under a second against an underpass.
I don't know. You can't swing a cat in a parking lot without hitting a Prius on a Saturday in our suburb. I like annoying my wife by pointing out, "There's a Prius! And there's a Prius!" Not that cutting edge. So let's everybody get a hybrid and be done with it. Then, in another 10 years we can move along en masse to the next step of all-electrics instead of just sitting here and fantasizing about them.
I get sticker shock whenever I pull a bandaid off my hairy arms or drumsticks.
Diabolus est Deus Inversus
I thought prices were down because the nice oil companies got tired of making record profits!
they gotcha by the nads sweet hearts and they aint gonna let go, viva zapata ! el condor pass! kiss kiss!
it will be easier to cut back on driving for errands. I am fortunate enough to have a supermarket that is in walking distance from my house, and when the weather is nice, I am able to ride my bicycle to my mom's to help her out. It's not much, but every little bit helps.
What the hell are they burning money in big pits or something? they made for at least 5 years stright record 10s to 100s of BILLIONS in profits they have enough cash to fund their projects and about a million others.
I can't wait till oil is sent into the dusts of time like so many other no longer used energy sources. It's where coal should be now.
Alternative energy is very important to improve economy and good for the nature also Gas prices are already on the way up and its flying
since mid-February. Many, many petroleum landmen in Oklahoma City are out of work and some are changing professions, as they did in the oil bust of 1980. It's always feast or famine in this biz. My gut feeling is that things won't come back up for at least a year or maybe more. Except for gas prices, that is. Price for the cheapest gas is $1.99 in OKC. According to national surveys, OKC is in pretty good shape comparatively, but don't kid yourself. Things are bad all over.
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