Over at the Guardian there is a nice little graphic on oil prices I cannot embed here. But it is worth a look as it has explanatory spots on each of the peaks and troughs over the last ten years.
The real question is “How long can it last?” And, thanks to Andy in Germany we have a guide to that too.
There is no doubt that demand is down – and that includes places like China which have been one of the biggest resaons for increases in demand recently
Over the next two decades, some experts say, oil production will peak at around 95 million barrels a day.
Other experts say that it has peaked already
One big problem is that oil fields have a natural rate of decline as oil gets pumped out. The rate varies widely from field to field, but the global average is about 5 percent a year. So, just to maintain output, producers around the world must find and develop about six million barrels of oil a day. To increase global oil production by 1.5 million barrels a day, that figure rises to 7 million or 8 million barrels a day, or at least 2.5 billion barrels a year – a monumental task that gets tougher as production grows.
“The energy crisis is fundamentally a problem of supplies, not of energy demand,” said Frédéric Lasserre, the head of commodity research at Société Générale in Paris.
And the great chorus of “drill baby drill” to the south of us ignores the reality that the reserves in places currently thought to be untouchable due to environmental concerns are going to take a long time to be exploited even if the unthinkable happens and the Republicans manage to steal another election.
the cost of producing extra barrels of oil is rising. As prices fall, this might cause high-cost producers, like those working Canada’s vast oil sand deposits, to shut down production or curb their expenses.
Which is, I think, the first time I have seen that suggested. Of course, the tar sands have to be shut down – and quickly – if we are serious about stopping the current disastrous slide into global catastrophe, but no one in any Canadian government is going to even think about that. Indeed the opportunity for more drilling in the Arctic is about the only official reaction so far to the new predictions on the rate of change in global warming. But it might put a crimp in some of the pipeline schemes which threaten our coast with a lot more tankers.