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High Petrol Prices - unfolding history of production and procurement

08/12/2005 09:26 PM
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High Petrol Prices - unfolding history of production and procurement
High Petrol Prices - unfolding
History of the rise of the cheap petrol economy - commentary and speculation on its fading
[link to www.SustainableLiving.info] or use this TinyURL-
[link to tinyurl.com]
summary details of fading hydrocarbons price spikes recession in the USA recession overview
immediate response to recession medium term response to recession recession to depression

140 mya - 140 million years ago Middle East and North Sea oil forms from the continuous rain of dead bodies of tiny plant and animal plankton in the seas of this time.

90 mya - 90 million years ago North and Central American oil forms from the continuous rain of dead bodies of tiny plant and animal plankton in the seas of this time.

1850 - most homes in the west are lit by smoky, smelly, whale oil lamps. The beginning of a turn to clean burning kerosine.

1859 - first ever U.S. oil well drilled in Pennsylvania by the Pennsylvania Rock Oil Company at the site of seeping oil at Oil Creek, Titusville. Oil is struck at 21 meters.

1870 - John D Rockerfeller founds the Standard Oil Company.

1878 - Standard Oil controls 90% of the refining capacity in USA. Kerosine for lighting is a main product, as whale oil for lighting is now increasingly expensive as whale catches have peaked, and are now declining year on year.

1877 - Worlds first oil tanker (steam driven) plys the Caspian sea, carrying kerosine.

1878 - Invention of the lightbulb -death knell of the kerosine lamp.

1892 - In a technological breakthrough, French car builder Peugeot creates the first petrol-engined 4 wheel car that has rubber tyres.

1901 - Spindletop oilfield in Texas drills a well that gushes 100,000 barrels of oil a day.

1903 - Ford motor company incorporated.

More at link.

Last Edited by SHR on 09/21/2011 04:25 AM
Anonymous Coward
12/08/2005 10:08 AM
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Re: High Petrol Prices - unfolding history of production and procurement
In other words, this policy is short-term ´me-generation´ expediency in face of a crisis whose dimensions are known.

It is an impotent policy.
It is an intellectually bankrupt policy.
It the childish self-delusional policy of the addict living in a fantasy world of ´cheap energy forever´.
It is a policy of those in frightened of the reality of the impending consequences of what they have failed to do.
2001 - USA, summer. Natural gas prices drop back nearly 300% to the normal trend line after winters demand spike.

2001 - USA backed big business in Venezuela uses the right-dominated Petroleum Workers Union to organize a general strike.

2001 - the highly nitrogen-gas pressurised declining Canterell field in Mexico now produces 2.1 million barrels a day - nearly twice the flow rate achieved at the ´natural´ peak of production for the field.

2001 - Iran signs a 25-year deal with the USA´s ally Turkey to supply 4 billion cubic metres of natural gas, making Iran the second biggest supplier to Turkey after Russia.

2001 - Turkey on-sells part of its Iranian gas to USA´s dependent ´oil and gasless arab state´ - Israel.

2001 - Ford Motor Company introduces a car, the P2000, with a hydrogen internal combustion engine saying it "could help bridge the gap between gasoline vehicles and the fuel cell vehicles of the future." Engine efficiency is about the same as a diesel, but the range is only 62 miles. Liquified natural gas or compressed natural gas gives much better range, and is a mature technology. Hydrogen gas must be ´made´ by decomposing these gases, or by using electricity from a coal or gas fired power station (or nuclear station) to decompose water into hydrogen and oxygen. The idea a hydrogen powered vehicle could ever be widely and popularly available as a ´substitute´ for mined gas shows no understanding that there are no ´reserves´ of hydrogen to be ´mined´; hydrogen can be brought into existance only through burning fossil fuels or uranium.

2001 - September 11 - Saudi Arabian terrorists murder over 3,000 Americans in New York, setting the stage for America to invade Saudi Arabia Iraq, and kill an estimated 20,000 Iraqis.

2001 - (november) a paper published by eminent geologist Kenneth Deffeyes of the prestigous Princeton University says "The biggest single question is the year when world oil production reaches a Hubbert peak and then declines forever. Both the graphical and the computer fits identify 2004 as the probable year. The largest single uncertainty is the enormous reserves of Saudi Arabia."

2002 - USA White House spokesperson Ari Fleischer “The only interest the United States has in the region is furthering the cause of peace and stability, not in [Iraq’s] ability to generate oil...” If you are going to tell a lie, tell a big one.

2002 - USA sponsored opposition attempt to violently overthrow the democratically elected government of Venezuela. A massive popular uprising, with support from the lower rank of the military, stops the insurgents and restores the popularly elected president.

2002 - “Senior Defense official” - possibly Deputy Defense Secretary Wolfowitz - Pentagon leadership reveals in a Pentagon briefing paper that the Pentagon “have crafted strategies that will allow us to secure and protect those [Iraqi oil and gas] fields as rapidly as possible in order to preserve those prior to destruction.”

2002 - ExxonMobil semi-publicly admits world oil will peak before 2010 - Harry J. Longwell, director and executive Vice-President of ExxonMobil “The catch is that while demand increases, existing production declines. To put a number on it, we expect that by 2010 about half the daily volume needed to meet projected demand is not on production today – and that’s the challenge facing producers.” (World Energy, Vol 5 No 3, 2002)

2002 - a report from the Colorado School of Mines, titled ´The World´s Giant Oilfields,´ notes that nearly 50% of the world´s crude oil supply come from the 120 largest fields in the world. The 14 ´largest of the large´ supply over 20%, and these 14 have an average age of nearly 44 years. The conclusion is that there are no more super giant fields in the world to be found.

2002 - USA gas production falls back to 2001 levels.

2002 - USA oil field service and drilling costs are now $1,057,510 per well (expressed in 2005 dollars). This reflects more geologically ´extreme´ drilling conditions, where drilling would never in the past have been viable.

2002 - 2003 Oman´s (Middle East) oil field drop production significantly as fields age

2002 - Columbian Cruz Beana oil fields production drops from previous levels to 200,000 barrels a day

2002 - Latin American oil production might have peaked, but still a little too close to call [2]

2002 - (november) USA invades Afghanistan.

2002 - Commencement of the Baku-Tbilisi-Ceyhan (BTC) pipeline to bring oil from the Caspian Sea to the Mediterranean for on-shipment.

2002 - (december) The Caspian sea area, previously touted as "a new Saudi Arabia" has drilling results in that show not the expected 200 billion barrels, but about 39 billion barrels, much of it lower quality crude.

2002 - This years USA additional government debt is $US158 billion, most of which will be funded by issuing more treasury bonds.

2002- Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates peg their currencies to the US dollar to benefit by its strength.

2002 - Volkswagen announces a project to develop a super-economy car that can travel 100 kilometers on 1 litre of fuel. It is called the “1-liter” car. The prototype, a lightweight single cylinder diesel capable of 120 kph (75 mph) does even better, 0.890 litres to the 100 kms (264 miles per gallon).

2002 - 1.2 million new cars were purchased in China this year.

2002-2003 - USA winter demand over this period draws reserves dangerously low (40% below normal by the end of winter). Reserves were low because increased demand required increased storage in the ´off season´ but pumping capacity was insufficient due to decreased supply. Spot market prices created ´spikes´ as high as US$30 per million cubic feet, in equivalent energy terms, about $US9 a gallon for gas. Natural gas is also the primary feedstock to be decomposed into the risible USA ´hydrogen economy´ smokescreen.

Winter demand in 2002-2003 hit an all-time high, depleting storage by a record 2550 Bcf. By early April, storage had bottomed out at a dangerously low 623 Bcf, more than 40% below normal storage for that time of year. Spot prices skyrocketed to $10.00 per Million British Thermal Units (MMbtu´s). This led to NG prices of as high as $30 per million cubic feet (Mcf).

2003 - In the UK the number of petrol stations also equipped with LPG (liquified petroleum gas) reaches 1,200 - nearly twice the number of suppliers that existed in 2001. Government tax on LPG is considerably lower than petrol, and subsidises the cost of installation of dual fuel systems in new cars (and in some used cars, albeit at a lesser rate) at around £1,000. Savings on petrol pay for the buyers share of the installation within about 20,000 miles.

2003 - The number of motor vehicles in the UK is now 31.2 million.
27.7 million of these are private autos and light goods vehicles such as utes and vans.
Road transport accounts for about 75% of all oil used in the UK.

2003 - UK now consumes 42 million tonnes of oil per year in road transport (private and freight).

2003 - UK now consumes 0.3 million tonnes of oil per year in rail transport (passenger and freight)

2003 - China´s oil resource probably peaked (as assessed from the Uppsala Hydrocarbon Depletion Study Group model). Remaining reserves estimated at 25.7 billions barrels.

2003 - China´s largest oilfield at Daqing, produces 48.3 million tonnes for the year. This is the first production drop (down from about 50 million tonnes per year) in 27 years.

2003 - China relies on Iran for 14% of its oil needs.

2003 - China spends $US300 million doubling the capacity of the Sudan-China oil refinery.

2003 - the giant Shaybah oilfield on the border of United Arab Emirates and Saudi Arabia has now produced 1 billion barrels of crude (136 million tonnes).

2003 - Australias oil fields have peaked. Total production has fallen from about 650,000 barrels a day to around 430,000 barrels a day.

2003 - Indonesias production slide continues. It now exports 100,000 barrels of crude a day.

2003 - (early) Japanese companies take a 20% stake in developing the Iranian 1 billion barrel Soroush-Nowruz offshore field in the Persian Gulf, and later sign contracts for natural gas and gas liquids from it and other Iranian offshore fields.

2003 - USA national gas field production decline is estimated at roughly 3% a year.

2003 - UK North Sea fields production drops by 8.5% as decline continues (small fields come into play, but nett of consumption, there is an overall loss).

2003 - Canadian Ladyfield gas deposit now producing at only 300 million cubic feet per day, and the decline rate continues to be steep. Some charge the field has been overproduced, and should have yeilded more.

2003 - (january) US president Bush announces "Tonight I am proposing $1.2 billion in research funding so that America can lead the world in developing clean, hydrogen-powered automobiles." Either he had been badly advised, or he is incredibly ignorant of the science and previous reports. The technology to do it reasonably is not, and never will be, there. Technological feasibility is a trivial side issue anyway - hydrogen must come from gas or coal; or from electricity. There are no ´hydrogen mines´ available to exploit; there is no cheap and abundant source of hydrogen even if it were a practical option for automotive transport. Which it isn´t. Much of the funding will flow to Sandia Research Labororatories, a Lockheed Martin subsidary long involved in contracts for the business/military/presidential-administrative complex, a complex extremely heavily ´influential´ in USA.

2003 - (january) Iraqi oil production is about 2.8 million barrels a day. Saddam Husseins regime uses 80% of oil revenue to pay for food, 20% (worth about $US3 billion) for the military, governance, and kick-backs.

2003 - Report for the Italian Government recommends that if USA invades Iraq Italy should make the oil field regions of Nasiriyah and Halfaya secure to protect their 1997 oil deal, "a deal worth 300 billion dollars".

2003 - (before April) According to reported information from a former Energy and CIA oil analyst, a secret plan was drafted by the American administration to the sell-off all Iraq´s oil fields after a planned invasion. Republican administration ´hires´ are said to have had the secret intention to destroy the power of the Opec cartel by large increases in oil production from the seized iraqi oil fields, busting the Opec quota levels.

2003 - (January) "The pentagons darling" Ahmed Chalabi, having already met with executives of three US oil multinationals, tells an American newspaper that "American companies will have a big shot at Iraqi oil". Not only does Iraq have the second largest oil reserves in the world, Iraqi oil is also one of the cheapest to produce in the world - some estimates are as low as 97 cents per barrel. North Sea oil cost around 3 to 4 dollars per barrel to produce. Estimated annual production would be worth somewhere between $US40 billion and $US80 billion per year (at 2003 oil prices).

2003 - (january) Unnamed ´sources´ in the office of Vice president Cheney claim some in the administration want to seize Iraqs oil as "spoils of war". Others argue that the proceeds of oil sales should go to pay the Americans for their costs incurred in invading and occupying Iraq. Some argue that Iraqs money belongs to Iraq, and should be held in trust to pay for repair to the damaged infrastructure and for normal governance. The Congressional Budget Office estimates the cost of occupation would be $12-48 billion per year, and occupation would only need to last until 2004 or 2005.

2003 - (April) USA business/military complex attacks Iraq on the pretext of the prescence of unspecified weapons of mass destruction. All major government buildings are attacked and either damaged or destroyed. The Iraqi Oil Ministry building is the only building left untouched.

2003 - Saudi Arabia arranges an extra 800,000 barrels of oil for world markets. Some or all of this may be from its tank farm reserves around the world, perhaps disguising less spare capacity than the world thinks it has.

2003 - Post invasion, commentators speculate Iraqs oil reserves are 200 billion barrels, and will bring an era of ´cheap oil´ once again.

2003 - USA business/military complex achieves its objectives of protecting and controlling the more southerly oilfields. Saudi Arabia co-incidentally pumps at full capacity, something it has never done in recent times. The price of oil falls by $US10 for a few months.

2003 - Italian Government sends in troops for "humanitarian" purposes. Italian troops guard a refinery and oil pipeline in Nasiriyah. 19 Italian soldiers die when a suicide bomber attacks the Italian base at Nasiriyah.

2003 - The USA invading force´s self-appointed administration, the ´Coalition Provisional Authority´, nullifys all Iraq´s existing oil lease contracts with any Eurasian country signed in the period 1997-2002 . The contracts were worth about $US1.1 trillion.

2003 - Rumors that the USA controlled puppet governing council intended to privatise Iraqi oil encourages insurgent attacks on oil infrastructure, presumably on the premise the invaders should be denied the "prize" so deeply coverted by Dick Cheney in 1999. Production of Iraqi oil does not meet expectations due to insecurity and sabotage, especially in the vunerable northern pipelines. The price of oil starts to climb again.

2003 (may) - Former CEO of Shell Oil USA takes control of Iraq´s oil production for the US Government. He delays and obstructs the USA administration scheme to sell off Iraqi oil fields and oil infrastructure to private companies of the invading nation.

2003 - Iran continues to invoice its oil sold in the Asian region in US dollars, but prefers payment in euros or alternative regional currencies. Most Iranian oil sales to europe are already in euros. 30% of Irans oil goes to European markets. Many of Irans imports come from Europe. If Iran had not switched to the euro, it would have experienced significant losses through having to pay for European imports with the depreciating USA dollar. As a result of European trade, 60% of Iran´s foreign reserves are now held in Euros.

2003 - Strong Euro, 13% above the dollar, OECD interest rates hit a 50 year low.

2003 (june) - export of Iraqi oil re-commences. Iraqi oil is once more sold in US dollars, not Euros. Large amounts of ´Iraqi´ revenue foregone as a result.

2003 - Dollar strengthens once more, treasury interest rates on bonds cut, Asian purchase of the bonds continues, USA banks with petrodollars recycling from the Middle East re-lend with few credit worthy requirements for housing and lifestyle, fueling the property bubble and fueling private debt, including purchase of gas guzzling SUV´s.

2003 - Strong resentment by Arab feudal chiefs and dictators at US seizing of Iraqi oil leads to Saudi Prince visiting Russia and the Saudi regime discussing closer cooperation with Lukoil and other Russian companies. OPEC countries reportedly are privately much more predisposed to sell oil in Euros, but are presumably too afraid of America to say so publicly.

2003 - This years USA additional government debt is $US375 billion, most of which will be funded by issuing more treasury bonds.

2003 - USA is now burning almost 9 million barrels of oil a day in motor vehicles.

2003 - USA electricity generation capacity troubled at the margin by some nuclear power plants possibly having to shut down over summer to repair degraded reactor heads. Nuclear power supplies 10% of USA electricity.

2003 - The year ends with the preferred, easily refined Dubai ´sweet´ crude having sold for an average price over the year of $26.80 per barrel .

2003 - China sold 2 million new cars this year - 70% more than the previous year.

2004 - The US military guards ´US´ oil supplies. USA signs a miltary base agreement with Principe and San Tome, two tiny islands off West Africa´s coast. Curently Nigeria supplies around 400 million barrels a year to USA, and Angola 110 mb/yr. Offshore Nigerian and Angolan oil might contain 83 billion barrels in the long run. If it could be produced in significant volume it would probably meet demand for 3 or 4 years, according to some estimates. But there are large political and logistic problems in producing it.

2004 - Peace discussions between rebels and Sudanese government. Bitter rebel commanders suggest Chinas oil contracts may be terminated once they share in government power.

2004 - Sudan´s government commits crimes against humanity in burning villages, bombing, torturing, and murdering people in order to drive people from their ancestral land to ´clear´ land for oil exploration. 4 million have been dispossessed. 2 million are dead. They use guns and planes bought from the Chinese, and sometimes use oil company airstrips and facilities. UN wonders whether or not it is ´officially´ genocide.

2004 - China National Petroleum Corp begins trial oil production from a field it almost totally owns in South Darfur, Sudan.

2004 - The Greater Nile Petroleum Operating Co consortium´s (majority owned by China National Petroleum Corporation) Heglig and Unity oil fields in Sudan produces 350,000 barrels per day.

2004- China now buys 10% of its oil needs from Sudan, which has estimated reserves of 563 million barrels.

2004 - USA is now importing 60% of the oil it uses.

2004 - Yemen passes its peak of production and starts its decline.

2004 - Highly pressurised supergiant Canterell complex in Mexico is now expected to "decline rapidly" from last years pressurised production of 2.1 million barrels a day.

2004 - Prudhoe Bay´s production has declined to 350,000 barrels of oil a day.

2004 - Russia´s giant Samotlor field production falls to 325,000 barrels a day. At peak, it used to produce 3,500,000 barrels a day.

2004 - UK North Sea fields production drops by 10% as decline continues (small fields come into play, but nett of consumption there is an overall loss). Production is now 30% below the 1999 daily average.
Anonymous Coward
12/08/2005 10:08 AM
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Re: High Petrol Prices - unfolding history of production and procurement
2004 - (March) US Department of Energy predicts oil prices to stay around $29 per barrel for the whole of 2005.

2004 - (April) Iranian oil and energy analyst Ali Bakhtiari tells an audience at the annual gathering of the Association for the Study of Peak Oil (ASPO) in Berlin "By the end of the year we will see oil at $50 a barrel" .

2004 - (March) the International Energy Association (IEA), in response to China´s sharply increased oil buying, raises their projections of the growth in demand for oil by an additional 220, 000 barrels a day, taking projected daily demand throughout 2004 to 1.65 million b/d.

2004 - (March) US president re-signs Executive Order (12959) of 1995 prohibiting US oil companies from oil exploration or development with Iran. Presumably American plans are to take control of Iranian natural gas by any or all of - ´precision-strike´ missile coercion (most likely); invasion; or sponsoring a coup d´etat and installing a puppet regime (least likely).

2004 - (April) Iran signs a deal allowing Thailand to explore and develop the small Saveh oil block.

2004 - (April) French firm CETAL commences work on Iranian gas pipelines to prevent them from freezing up in the coming winter. Iranians are heavily reliant on natural gas for domestic use, and winter freezes have interrupted supply. They now import much of their refined petroleum products as they have no real refining capacity for domestic use. Gasoline prices are heavily subsidised.

2004 - (july) Shell admits it has overstated its reserves by almost 4.5 billion barrels. It is fined by the financial regulators.

2004 - (july) China buys oil to build its reserves - some speculate it is starting to convert dollars of long term dubious value into gold - black gold.

2004 - (october) China signs a $100 billion contract with Iran for joint development of a major Iranian gas field including a 25 year supply contract for liquified natural gas to be produced from the field. Once the field is commissioned, the contract is for Iran to sell oil to China at a rate of 150,000 barrels per day for 25 years, at prevailing market prices. Iran is China´s major source of oil.

2004 - (october) crude oil prices reach $53 a barrel - a 20 year high. Only the few commentators familiar with ´peak oil´ had predicted this level, but not this early.

2004 - US Department of Energy forecasts world oil production won´t peak until around 2037, asserting -
"The world production peak for conventionally reservoired crude is unlikely to be ´right around the corner´ as so many other estimators have been predicting..."

2004 - US office of petroleum reserves report states "world oil reserves are being depleted three times as fast as they are being discovered. Oil is being produced from past discoveries, but the re­serves are not being fully replaced. Remaining oil reserves of individual oil companies must continue to shrink. The disparity between increasing production and declining discoveries can only have one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available....Although there is no agreement about the date that world oil production will peak, forecasts presented by USGS geologist Les Magoon, the Oil and Gas Journal, and others expect the peak will occur between 2003 and 2020. What is notable ... is that none extend beyond the year 2020, suggesting that the world may be facing shortfalls much sooner than expected."

2004 - The head of the Association for the study of Peak Oil claims the massive Saudi Gharwar fields geological structure may have been damaged by pumping at full capacity, leaving some oil unable to be extracted. This field produces about 5 million barrels per day of the total Saudi output of around 9 million barrels per day.

2004 - (early) A Texas based American oil industry group headed by the former USA secretary of state James Baker (now said to also be a paid legal representative of both Exxon-Mobil and the Saudi Arabian government.) draws up plans for the USA administration which would create an Iraqi (nominally) state-owned oil company to apparently control Iraqi oil and Iraqi oil infrastructure. As Iraqi equity in its industry has been removed and its capital base destroyed, a shrewd guess would see it likely that the company would have to ´farm out´ all its assets to overseas companies due to capital starvation (in return for a small percentage of residual profits, probably equal to the food bill for the Iraqui people). A fair speculation would be that it would also have to borrow heavily - from plainly visible or disguised US dollar currency interests. Repayments could possibly be in oil.

2004 - Overall gas depletion in Europe is estimated at about 6% less production a year.

2004 - UK´s Energy Institute estimates conventional global oil reserves are declining at the rate of about 4-6% a year, and staffer speculates the peak might be in 2008.

2004 - USA gasoline stocks are at the lowest levels since the 1970´s oil shock.

2004 - (march) Petrol prices in USA are about $1.80 a gallon. In UK petrol cost $US5.30 a gallon. A substantial part of the difference is tax on petrol. The price signal in USA is, and always has been, to buy ´gas guzzling´ cars with big engines. The price signal in the UK is, and always has been, to buy more economical cars with small engines. Can the USA national fleet abruptly change? In time. One estimate is fifteen years to change over half the fleet.

2004 - (may) energy advisor to George W. Bush energy investment banker Matthew Simmons says for demand for oil to be ´controlled´, oil would have to reach $US182 a barrel. At this price, gas prices would also rise, by his estimate, to the equivalent of $US7.00 per gallon. On 2003 experience, his price for natural gas may be conservative.

2004 - USA ´lower 48 states now produce 5 million barrels of oil a day.

2004 - (august) USA drivers use over 9.2 million barrels of petrol a day in the summer ´touring season´.

2004 - (august) Russias privately held Yukos oil company may be forced to stop operations due to a supposed massive tax debt. Yukos supplies world market with about 1.7 million barrels of oil a day, about 2% of global oil.

2004 - (august) Oil prices rise to $US49 a barrel, the highest price since futures started being traded in 1983.

2004 - (september) Shell Oils total reserves fall by an unstated amount. New additions to its reserve estimates equate to only about 20% of this years production. Shell predicts the company will be producing the "equivalent of" 4.5 million barrels of oil per day by 2014. Presumably this includes gas.

2004 - Shell Oil finds moderate sized gas play in western Canada. While big relative to the usually shallow wells now in western Canada, expected daily production still only equates to 0.04% of total North American daily demand. Industry veterans note a field of about this size would need to be found every few months to flatten out the natural gas decline curve of fields in Western Canada.

2004 - (september) Hurricanes shut down many of the Gulf of Mexico wells and reduce production in Texas and Louisiana. Refineries in Louisiana shut. US Southern State crude oil import facilities close. There is a production loss of 43.8 million barrels of oil from the Gulf of Mexico. Saudi Arabia pumps at full capacity to make up the shortfall.

2004 - (september) Oil passes the $US50 a barrel price mark at the end of september.

2004 - (mid october) Oil hits $US55 a barrel.

2004 - (october) USA strategic oil reserves have been filling at the rate of more than 100,000 barrels a day, and are now 666 million barrels. USA adminstration decides to take it to 700 million barrels before stopping.

2004 - (november) OPEC revises its projection of oil demand growth for next year downward. It estimates likely demand for OPEC oil to average 28.2 million barrels per day over the fourth quarter 2004 and first quarter 2005. This is a 2 million bpd drop over the amount its own figures estimate as having been produced in october.

2004 - (november) - China signs an agreement with Brazil to jointly develop undersea oilfields off Brazil´s coast, and to jointly construct a natural gas pipeline.

2004 - (december) China imports a record high of 12.1 million tonnes of oil this month. Chinas total oil use, domestic and imported, was 6.38 million barrels a day - a growth in total oil demand of 15.6% for the year. Imports of oil are now rising at the rate of 9% a year.

2004 - (december) China signs a 25 year supply deal to import 3.3 million tonnes a year of liquified natural gas from Australia North West gas fields. Supply is due 2006.

2004 - (december) Chinas government-owned China National Offshore Oil Corporation buys a 5% stake in the consortium developing Australias North West Shelf gas reserves. Australias Woodside Petroleum and BHP Billiton each have a 12.5% stake, as does England´s BP, America´s ChevronTexaco, Japan´s Japan Australia LNG (MIMI) and the Netherland´s Royal Dutch Shell.

2004 - (december) Qatar, with the third largest gas reserves in the world (its giant field, the North field, holds 25 trillion cubic metres of proven reserves), produced 18 million tonnes of natural gas in the 2004 year.

2004 - (december) Qatar announces the Qatargas II project to deliver gas by train to Europe and then via a contract with ExxonMobil to deliver future supplies to England starting in the winter of 2007-2008. It is described as "the biggest deal in the history of the hydrocarbon industry". The Qatar government owns 70% of the project, the US oil giant ExxonMobil owns 30%. It plans to produce 60 million tonnes a year by 2010, which would make it the worlds biggest LNG exporter at that point.

2004 - (december) USA Congress warned in testimony by UK energy expert Dr. Daniel Yergin that "The US is facing a critical five-year period in which, unless new steps are taken by consumers, industry and government, there is significantly increased risk of higher, more volatile natural gas and electric power prices, job losses, demand destruction and industry relocations." Not only is the price of gas to industry going to rise, the price of natural gas to power electricity generation plants will rise. Thus the cost of domestic and industrial energy will rise. Clearly, compressed natural gas as a substitute for petrol for domestic automotives will be more expensive than it has ever been, even if it retains a margin against petrol.

2004 - (december) USA Congress warned in testimony by UK energy expert Dr. Daniel Yergin that while USA currently imports 16% of its gas needs from Canada, that supply is likely to slowly decline as Canadian domestic demand increases more quickly than the very modest yearly production increases.

2004 - USA onshore gas exploration reaches record levels. Productive capacity is not expected to grow meaningfully, and in total, is expected to fall below 2003 levels.

2004 - (fourth quarter) Trend for increasing US dependance on selling government bonds continues. This years USA additional debt is $US413 billion, most of which will be funded by issuing more treasury bonds. Total accumulated USA Federal Government Debt reaches $7.6 trilllion, funded by $4.4 trillion in publicly held Treasury bonds and T-bills. Almost half the $4.4 trillion publicly held bonds are owned offshore - double the amount held offshore in 1992. If the world is to continue to accept US dollars, all payments for oil must continue to be in US dollars only, as by itself, the dollar has little intrinsic value.

2004 - (fourth quarter) USA Federal Government debt owed to US Social Security Trust Funds reaches an all time high of $3.1 trillion. $US1.8 trillion is now owed to the Social Security Trust fund alone via treasury bonds. Continued raiding of Trust Fund surpluses to help pay the huge USA debt means the cash in the funds is replaced with treasury bonds whose value depends on the fate of the dollar, which depends on the fate of the ´petrodollar´. The USA Government will not be able to replace the market value of the money it has ´borrowed´ from the funds in even the medium term, let alone the long term. Medical benefits and retirees pensions will necessarily be extremely limited when the taxpayer base shrinks as oil prices climb. Bonds must be issued to fund future shortfalls. If the US bonds are to have any value, the dollar has to be backed by oil, as in itself, the dollar has little intrinsic value.

2004 - The USA government-run Pension Benefit Guaranty Corporation administers payment of retirement benefits of nearly 500,000 workers and retirees covered by around 2,700 business sector pension plans that have terminated. The Corporation now also insures around 42 million American workers (about a third of the workforce) in more than 44,000 private-sector pension plans in case the companies fail and can no longer pay out their pension liabilities. It is funded for occasional failures in any given industries, not collapse of whole industries.

2004 - USA has experienced the highest budget deficit in history - $US500 billion. Interest rates on US treasury bonds are at historic lows, but are raised slowly to convince Asian banks to continue buying bonds. Asian banks, and particularly China and Japan, hold 43% of treasury bonds, whose value depends on oil backing. Neither wishes to rock the boat, especially as it is uncertain how much of the Middle East oil reserves USA may ultimately control. High oil prices are in both the Asian banks interests (to support the dollar) and the USA interest (to show foreign banks that Middle East oil backing continues to make the treasury dollar bonds worth buying; thus financing the deficit and the Iraq occupation).

2004 - USA trade deficit (cost of foreign goods imported less money received for US goods exported) reaches $700 billion per year. The largest part of the deficit is for imports of gas and oil, not Chinese and Japanese trade goods, as popularly supposed.

2004 - USA has trillions in consumer debt - per capita, the highest in the world. Only a strong dollar, backed by oil, prevents interest rates rise, and collapse of the consumer debt bubble, with consequent recession.

2004 -(december 28) Iran announces plans to have an international oil trades bourse, adding to the NYMEX bourse in New York and London´s ´International Petroleum Exchange´ bourse. The oil trades will be denominated in euros. It solves the problem of lack of a euro-denominated benchmark standard. The three current oil benchmarks - Brent crude (Norway), West Texas Intermediate (USA), and Dubai (UAE) are all USA dollar denominated. A euro denominated oil trading benchmark will significantly add to the value of the euro. Over time, it will remove some of the dollars ´black gold´ backing. Iran already trades with Eurasia in euros. If it goes ahead with this commercial activity, Iran´s fate is likely to be sealed. Iran plans to start trading on March 20, 2006, the Iranian New Year.

2004 - (november) Russias Putin publicly considers the idea of switching its trade in oil from US dollars to Euros at a summit of European leaders in the Urals. Russia is now the worlds biggest producer of oil by volume (bigger than Saudi Arabia). More than half of Russias oil trade is with West Eurasia. This follows the effective re-nationalisation of the Yukos oil company, and may be a ´straw in the wind´ to the erosion of the petrodollar. Unlike Saudi Arabia, Russias reserves are not massive enough to allow it to remain as number one for long.

2004 - Oil output from China´s domestic fields is a total of 175 million tonnes for the year, 2.9% more than 2003. Oil consumption for the year is 288 million tonnes. This is16.8% higher than for 2003.

2004 - China´s largest oilfield in Daqing continues to decline, producing 46.4 million tonnes for the year.

2004 - Both China´s second biggest oilfield at Shengli, and it´s third biggest, at Liaohe, continue to decline. Field-edge drilling and reservoir pressurisation are being used to maintain production levels.

2004 - China displaces Japan as the second highest importer of crude oil in the World.

2004 - Chinas total energy use from renewables - hydro power, solar, and wind - reaches 1%.

2004 - China sold 2.4 million new cars to it´s citizens, 20% more vehicles than last year.

2004 - China increases the amount of automotive fuel it burns by 20% relative to the previous year.

2004 - There are now about 13 cars per 1,000 people in China. Bicycles are a major form of non-recreational personal transport.

2004 - there are now about 600 cars per 1,000 people in USA. Bicycle barely register as a form of non-recreational personal transport.

2004 - By years end, China consumes oil at the rate of 2.45 million barrels of oil a day.

2004 - China´s total oil consumption for the year is the equivalent of 1.3 barrels of oil per citizen.

2004 - USA remains - by a huge margin - the worlds´s highest consumer of oil, consuming the equivalent of 25 barrels of oil per person in USA.

2004 - Growth in oil demand in USA, originally thought to have increased by 2.4% over last year - or 484,000 barrels a day - is found to have in reality been nearly 50% greater. The USA increased its consumption by 3.5% for the year, or an additional 697,000 barrels a day more than last year.

2004 - diesel fuel in USA averages $1.81 per gallon for the year, and the trucking industry spent $62.6 billion on diesel.

2004 - International Energy Agency says rate of demand grew faster in 2004 than any year since 1976.

2004 - the number of private cars on Britain´s roads is estimated at about 29 million.

2004 - the number of private cars on Europe´s roads is estimated at about 192 million.

2004 - Estimated ´world car population´ is now 740 million.

2004 - By years end, global daily oil consumption is now about 83 million barrels a day, 17 million barrels a day more than earlier expected.

2004 - The year ends with the preferred, easily refined Dubai ´sweet´ crude having sold for a price averaged over the entire year of $33.60 per barrel.

2004 - by years end, knowledgeable commentators predict oil to range between $US45-$US60 a barrel, i.e. EUR36- EUR50 a barrel for 2005. At least one commentator suggests $US75-90 will not choke off demand.

2004 - crude oil production prices have remained at about $US6 per barrel for non-OPEC oil producers and at about $US1.50 per barrel for OPEC oil producers.

2004 - USA - A years end survey of 32 firms (86% in the food and beverage industry) by IBM Business Consulting Services and the Grocery Manufacturers Association reveals transportation costs have risen by 23% in the food, beverage and consumer products industry since late 2001. Overall, these increased transport costs represent 6% of gross revenue for these busineses. Transportation costs have risen to an average of $US1.69 per mile. The companies include mega businesses with annual revenue of $1 billion or more such as General Mills, ConAgra Foods and Procter & Gamble. In responcse to these cost increases, new efficiencies are being systemically embedded - no partial loads are shipped, and some loads are being shifted to rail, which for some commodities is becoming a cheaper option.

2005 - Houston petroleum consultant estimates, on an inflation-adjusted basis, pump prices in USA would have to be $US5.10 per gallon to even equal the 1980 price. He does not mention the recession that followed.

2005 - (new year) by years end, one analyst projects the possibility oil may be consumed at the rate of 86 million barrels a day by the fourth quarter. This is 3 million barrels a day more than was consumed in 2004. This would be a total demand for production of an additional 1,095 million barrels a year by the end of 2006 - well in excess of last years ´cushion´ of supply over demand of about 7.2 million
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12/08/2005 10:08 AM
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Re: High Petrol Prices - unfolding history of production and procurement
2005 - (new year) by years end, one analyst projects the possibility oil may be consumed at the rate of 86 million barrels a day by the fourth quarter. This is 3 million barrels a day more than was consumed in 2004. This would be a total demand for production of an additional 1,095 million barrels a year by the end of 2006 - well in excess of last years ´cushion´ of supply over demand of about 7.2 million barrels! There is no evidence Saudi Arabia has the ´extra´ pumping capacity of 3 million barrels a day it is claiming, and that might meet this shortfall.Using these projections, the implication is that there would be a theoretical supply shortfall 3 days into the new year in 2006. Even taking into account the extra oil no longer required for US strategic reserves, the supply shortfall would still appear on the third day of the new year in 2006. If true, this would be an historic event in the very brief oil economy.

2005 - International Energy Agency (a conservative forecaster) forecasts daily oil consumption to rise to 84.3 million barrels a day this year. This is about 1.3 million barrels a day (475 million barrels a year) more than 2004, and on last years consumption levels, this forecast implies that there would be a supply shortfall 6 days into the new year in 2006. Taking into account the extra oil no longer required for US strategic reserves, a supply shortfall would appear 8 days into the new year in 2006.

2005 - (january) China´s vice president Zeng Qinghong visits Venezuela and signs an agreement on a number of bilateral areas of cooperation, including an agreement facilitating oil sales to China.

2005 - (january) India signs a contract with Iran to buy 7.5 million tons of liquified natural gas a year, the contract to run for the next 30 years.

2005 - USA "almost 200,000 megawatts of gas-fired power plants have been installed [in recent years], equal to one-fourth of the country´s total installed capacity in 2000."

2005 - Demand for LNG (liquified natural gas) has reached such heights that it exceeds current capacity to liquify it for shipping. Once sufficient liquification facilities are built to meet strong Asian, European and American demand, there will not be enough highly specialised liquid gas transportation vessels to carry the liquid gas.

2005 - (january) The U.S. manager of Toyota´s advanced technologies group, when asked when fuel cells cars would replace gasoline-powered cars replies "If I told you ´never,´ would you be upset?". While American car makers embrace an energetically and logistically impoversihed idea - hydrogen fuelling - Toyota embraces and refines high fuel efficiency hybrid gasoline-electric cars.

2005 - (february) Indonesia hit its lowest production level in 34 years of pumping - 942,000 barrels per day. Continued depletion plus increased internal consumption means that Indonesia is now a nett importer of crude. Domestic demand for oil and gas increased by around 50% in 2004.

2005 - (february) Saudis produce 9.2 million barrels a day to meet increased world demand.

2005 - (february) USA drivers use over 8.8 million barrels of petrol a day in the winter low demand season.

2005 - (march) Saudis produce 9.5 million barrels a day to meet increased world demand.

2005 - (march) US petrol still $US2 at the pumps.

2005 - (first quarter) The president of China´s Sinopec Economics and Development Research Institute predicts China´s oil consumption will double over the next 15 years to more than 10 million barrels of oil per day. As China reserves would only last 17 years at its much lower 1999 consumption rate if it relied soley on its own oil, it is clear that China will be looking to buy up to 8% of current (Q1 2005) daily world production. But in 15 years time there will be a 739 million tonne (about 15 million barrels a day) shortfall in annual world supply if demand averages at 1999 levels in the intervening years. A worldwide 15 million barrel a day shortfall is not a good time to be looking to buy an additional 5 million barrels a day over existing (2004/5) purchases!

2005 - (march) US Department of Energy said it expects prices to stay near or above $50 per barrel for the rest of 2005, making their prediction of just 12 months ago - a 40% error margin in only 12 months!

2005 - (march) For the first time, a USA Government report admits what has been obvious to the rest of the world for some time "World oil peaking is going to happen....[the] timing is uncertain". It advocates early governmental intervention, minimising public consultation as it delays an already overdue response. It presents three possible scenarios, depending on when oil peaks. In the worst case - which is more likely to be the actuality - they tell the truth, but couch it in dense and obscuring language - "if mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction". "Demand destruction" is a euphism for "recession", a term the authors fear using. "Demand" for oil would be "destroyed" because a recession is characterised by failure of businesses (most importantly, the small businesses that employ most people), unemployment, people stop spending, and cut back in luxury activities such as travel, huge government debt as tax base erodes and welfare skyrockets, failure to repay house loans, huge increase in bankruptcy filings, and so on. [3]

2005 - By years end, one estimate is that 92% of all the oil used in the USA will be imported (some domestic oil will be held in reserves for strategic reasons).

2005 - (april) US strategic petroleum reserves have recently been filling at around 250,000 barrels a day and are now nearly full, providing a buffer in case of ´price spikes´ in the Middle East if it attacks or invades Iran.

2005 - Iran considers increasing exports of liquified natural gas as oil field production declines.

2005 - Iranian opponents of gas exports claim by 2010 domestic demand will be 42 billion cubic feet per day - far in excess of present production. They estimate using gas to pressurise oil fields to maintain pumping rates will require 20 bcfd, 5 bcfd will be required for industrial and petrochemical use, 7 bcfd for electric power production, and10 bcfd will be needed for commercial, residential, and automotive compressed natural gas.

2005 - Iranian natural gas production is 25 billion cubic feet per day, which includes production from the first three phases of the giant South Pars gas field.

2005 - Iranian opponents to gas exports claim that by 2010 gasoline for domestic consumption will not meet demand, and a CNG program will need to be in place to replace the estimated 63,000 barrels a day of gasoline that will be being consumed by 2008-09. Further development of South Pars will barely meet domestic demand.

2005 - The population of Iran is now 70.7 million. Half of Iran´s population is now under 25 years of age. Unemployment is around 11%. Nearly a million jobs a year must be created to keep unemployment at this rate.

2005 - Oil and gas journal reports Iran is losing oil productive capacity of 350,000 barrels day every year, with the decline rate possibly reaching 500,000 barrels day every year by 2010. The estimated decline rate of onshore fields is now 8% a year; the decline rate for offshore fields is now 13% a year.

2005 - (april) US presidential commission into pre-war intelligence failures finds the CIA believed second hand reports from an informer described as "crazy" by his German intelligence handlers, and by his friends as a "congenital liar" without doing the usual checks on the informants reliability. The informants numerous unsubstantiated lies were the basis for the presidents spy agency to be able to say to the presidential/military administration that Iraq had weapons of mass destruction (later slyly watered down to WMD "programmes"). The report officially confirms that Iraq had no weapons of mass destruction (as the UN inspectors had already reported). It is officially confirmed there were no programmes involved in producing them. The given reason for invading Iraq was based on lies. The real reason is congruent with the 2001 energy strategy of using soldiers to invade and base themselves (or their proxies) in unstable countries with significant oil reserves.

2005 - (april) U.S. Department of Defense will reportedly spend $100 million in "the next few years" to establish a network of police forces and ´special-operations units´ "that can respond to various emergencies, including attacks on oil facilities" around the Caspian Sea oil and gas fields claimed by former USSR countries.

2005 - Russia expands its Caspian fleet to defend its claims to offshore fields in the Caspian Sea

2005 - Tension simmer in the Bakassi Peninsula in West Africa, a narrow stretch of land claimed by both Nigeria and Cameroon, and which may contain gas and oil reserves.

2005 - (april) Saudis offer to produce at full capacity - 11 million barrels a day - to meet increased world demand. But this extra supply is made up of higher sulphur medium and heavy crudes not easily used by many refineries, not the ´Saudi light´ the industry had been expecting

2005 - Any increase in supply of Saudi light crude simply will not be available until about 2012. In the interim, existing Saudi light crude supplies will be declining year on year. 2.5 million barrels a day nett are hoped for, by that time - relatively inconsequential in the large scale of global oil decline by that date.

2005 - Saudis are now pumping 7 million barrels of salt water a day into the giant Gharwar field to keep the pressure up to maintain production rates. Gharwar produces 60% of Saudi oil. The decline of pressurised fields in general principle is likely to be ´steep´ and ´abrupt´ rather than slow and gentle. If true, this is very troubling.

2005 - (april) Bank of Montreal analyst predicts Saudi Arabias oil fields decline rate will be "...among the world´s fastest as this decade wanes..." and estimates that the Saudi Gharwar field, the biggest oilfield in the world, has already peaked.

2005 - commentators question why even new Saudi fields are being pressurised with water. This technique is usually reserved for aging fields. The suspicion is that the fields are being pumped at a very high rate, which means they would peak earlier than would otherwise be expected.

2005 - Saudi Aramco claims the size of its oil reserves have remained the same since 1990; they also claim they have increased slightly from 258gb to 259gb, due to better extraction techniques. These claims are met with skeptiscism by those following the Peak Oil debate.

2005 - (april) Saudi Aramco oil company announces it has "ambitious expansion plans" to raise production capacity to 12 million barrels per day. Aramco claims plans to develop more crude in the "long term" will raise that to 15 million barrels a day. Aramco make the huge claim that oil can be produced at these rate for about the next 50 years. They produce no huge evidence to back the claim. Saudi Aramco´s own statistics show existing Saudi fields falling short of previous production by 600,000 to 800,000 barrels per day every year. If this rate of decline continues into the future, the short term expansion of an additional 3 million barrels a day that the Saudis claim (12 mbpd claimed future capacity, minus 9 mbd present production) will be eaten up by field production declines in about 5 years. Production will then be back to where it is today until - or if - the other ´crude developments´ come on stream.

2005 - (april) Australian officials say new projects starting up may allow oil output to rise in 2006 for the first time The last five years have seen output decline from Australias aging fields. Production is expected to resume the decline once more in 2008, as exploration in Australia has failed to find significant new oil deposits.

2005 - (april) Australian Treasurer Peter Costello publicly warns that Australia is running out of oil for export -
"The reason why Australia´s crude oil exports have fallen over recent years - while world demand and prices have increased to record levels and LNG exports are booming - is that some of our oilfields are approaching the end of their productive lives..."

2005 - (april) Australia needs to import 30% of the oil it burns domestically. The Australian Petroleum Production and Exploration Association estimates if existing consumption - and consumption increases - continue, in theory Australia will need to import 78% of its oil requirements in 2015. Obviously, recession-mediated demand fall off will reduce that percentage requirement.

2005 - Denmark likely to reach the peak of production this year, others say "within 3 years".

2005 - industry watchers forecast Brunei to reach peak of production in 2006, others say sometime with the next 3 years.

2005 - (april 7th) the International Monetary Fund says the world is facing "a permanent oil shock". It envisages permanent high prices for the next two decades.

2005 - (april 19th) US president Bush admits in public what he has known since at least 2001 (and probably a lot earlier) "I mean, we´re just going to have to change our habits. And that´s one of the reasons why I funded the hydrogen-powered automobile initiative, fully recognizing that, you know, with [within] the decade we´re going to have to think about how to drive different -- you know, power, power our automobiles. It´s a -- the hydrocarbon society will still be with us, but it can´t be with us to the extent it is today." Of course, hydrogen power is very energy expensive, and can never ever even begin to replace petrol. Bush also notes the need for more investment in refineries - an oblique admission that the Saudis ´excess capacity´ is not the sweet light crude the world wants, but the heavy sulphur containing crude that requires specialised refineries to be able to deal with it.

2005 -(april 15th) Volkswagon abandons work on its extreme fuel efficient car (the prototype does better than 265 mpg). Even with a simple single cylinder diesel engine, it says it cannot produce a popular economy car for less than €20,000 ($US25,900), which is too expensive. Their existing production model, the VW Lupo, is a 3 litre diesel and already does a thrifty 3 litres to the 100 kms (~ 78 mpg)., and is less expensive at €15,100 ($US19,500).

2005 - (april) work starts on the world´s longest subsea gas pipeline (1,200 kilometres), running from Norway to Great Britain. When completed in 2007, its capacity of 70 million cubic metres of natural gas a day will be enough to meet about 20% of UK´s current gas requirements. UK´s former Minister of Energy Brian Wilson predicts that by the year 2020, 70% of UK´s electricity will be generated by burning gas. 90% of that gas will have to be imported. His "working assumption" is that global oil and gas reserves "continue to be significantly underestimated". He provides no data to explain why he makes this assumption. He provides no figures for his assumed "underestimation".

2005 - (april) Americas Secretary of State Rice tries to prevent a gas pipeline to India to meet its gas requirements, telling reporters she had "communicated" to the Indian government Americas "concerns" about "the gas pipeline cooperation" between Iran and India. Unsuprisingly, India´s Prime Minister Singh tells her the gas is necessary for India´s "soaring" energy needs, and that "We have no problem of any kind with Iran."

2005 - (may) Americas Secretary of State Rice tells Russias Putin "what Russia can do", that is, "What Russia can do is to adopt policies in its energy sector in terms of the development of its energy sector that will increase the supply of oil both in the short term . . . and the long term..." She wants Russia to allow her countries´ oil companies to drill for Russian oil...

2005 - (april) Russia announces it will build a pipeline from Taishet in eastern Siberian to Skovorodino, near the border between China and Russia - a distance of around 2,000 kilometre. It will then build a branch pipeline into China before possibly continuing on for another 2,000 kilometres to Perevoznaya, only about 600 kms by sea from Japan.

2005 - UK now imports 50% of its domestic coal requirements from overseas.

2005 - UK now obtains 30% of its electricity requirements from coal.

2005 - (april) Saudi energy minister again repeats claims Saudi Arabia has ´spare´ capacity of 1.5 million barrels per day over the11 million barrels per day it is already pumping, and can add a further 1.5m b/d in production capacity by the end of 2009. They have previously claimed an ability to raise the capacity beyond 11 mb/d by 3 mb/d in the "long term".

2005 - (april) BP, the worlds second largest publicly traded oil company, unsuprisingly, reports a record first quarter (Q1) profit. Oil prices were 53% higher than for the same quarter last year. Exxon Mobil (largest publicly traded company), BP and Shell (#3) together made $US16.5 billion profit in Q4 of 2004.

2005 - (april) A BP spokesman says "The world holds enough proved reserves for 40 years of supply and at least 60 years of gas supply at current consumption rates". If the sentence is broken into two parts - "The world holds enough proved reserves for 40 years of supply" and "The world holds enough proved reserves for... at least 60 years of gas supply at current consumption rates", then true; but it obfuscates the real issue. There is not enough production capacity to supply oil at the rate the market demands at the price the market demands, and no new large high capacity fields have been found, or will be found. BP must be well aware the crisis is in pumping capacity to meet demand, not absolute potential supply over time.
And gas, of course, will be in high and increasing demand as smaller gas fields run out and electric generation plants look around for new gas in a world where piplines are non-existant, inadequate, and/or in need of repair - not to mention insufficient specialist LNG transport ships and too few or non-existant LNG terminals. In short, "current consumption rates" of gas will skyrocket, making the prospect of it lasting 60 years quite risible.

2005 - (april) BP announces its production from key fields in Alaska is "flat", and from its North Sea oil properties "is declining somewhere between 6 and 8 per cent". This represents around 150,000 - 200,000 barrels a day less. It´s stake in Russian TNK-BP and its new output from Azerbaijan have different (unspecified) decline rates.

2005 - (april) Exxon Mobil announces a 44% increase in profits for the first quarter. Its shares lose 4 cents. Why? Because it also reports its total stock of oil-equivalent hydrocarbon reserves have fallen by 5% (older larger fields are depleting, newer ones tend to contain less reserves than the ´rich pickings´ of earlier decades - an overall nett loss of reserves).

2005 - (april) CEO of the Royal Dutch/Shell Group claims "...contrary to what some commentators say there is plenty of oil and gas left.", but goes on to admit it is not in ´traditional´ locations (the only ´tradition´ is to produce from the biggest and most accessible fields with the greatest production capacity first ), and in unconventional oil (tars, shales, igniting coal mines to generate methane). He says cost of recovery of these sources has halved. All true, with caveats. None of these sources will equate to the current oil demand, or even come close to it. It may be there - but it simply can´t be produced at the rate and the price the world wants.

2005 - (april) Shell produces 78,000 barrels a day of oil from oil sands in Q1, a 5% decline on the amount produced in Q1 2004.

2005 - (april) Shell report crude oil production has fallen by 8% to 2.14 million barrels a day, and natural gas production is down by 2%.

2005 - (april) USA lower 48 states (without Alaska) depletion rate now nearly 2% per year; natural gas demand has also been increasing by 2% per year. In spite record levels of drilling, and drilling in technically difficult and expensive locations, US domestic natural gas supplies are near the point of supply shortfall. Newer gas strikes have been smaller, and have a shorter production life.

2005 - (april) study of the aggregated first quarter reports of 8 major publicly traded oil companies shows a decline of 2.8% in production compared with the previous year. This amounts to 304,000 barrels a day. The Government owned oil companies (responsible for the greatest amount of oil traded) do not make public reports, so their decline rate is not as easy to estimate.

2005 - (april 4) jet kerosene trades at a record high of $US76.

2005 - (april) The International Air Transport Association (IATA), representing 270 airlines, estimates fuel costs may rise by 20%. Fuel costs make up between 15% and 40% of the total operating expenses of airlines.

2005 - (april) China Southern Airlines increases passenger numbers to 28 million, a 38% increase, but in the face of a 66% surge in its fuel costs for the last half of 2004, makes a loss. IATA estimates that if oil averages $US43 a barrel, the industry worldwide will accumulate losses of $US5.5 billion this year.

2005 - USA Delta airlines loses a billion dollars in the first quarter. It has over 3 billion dollars of employee pension liabilities from 2006 to 2008. Delta wins court approval to be relieved of its pension funding liabilities under a bankruptcy type proceeding.

2005 - With fuel costs high and competition intense, USA´s United Airlines also moves to bankruptcy actions and defaults on its pension plan - the largest ever US pension plan default. The USA government Pension Benefit Guaranty Corporation picks up the cost.

2005 - with General Motors still producing gas guzzling SUV´s, costs outweigh income and the pension plan (whose investments provide a very large part of GM ´income´) is unable to pay $US17 billion of its obligations. Default is possible, and may mark a trend in cheap-oil-dependant USA industries.

2005 - Americans, with more vehicles (around 210 million) than there are licenced drivers, drive an average of 12,000 miles a year at an average US driver fuel inefficiency of 3.2 kilometers per liter (20.8 miles per gallon).

2005 - (april) UK truckers and farmers protest outside the UKs largest refinery over the price of diesel, which risen by about 60% in the last six months. Protesters say they were threatened with arrest under the contentious new anti-terrorism laws.

2005 - (april) crude oil spikes to US$58 a barrel.

2005 - (april 15) Colin Campbell, addressing Swiss financiers prior to the Peak Oil conference, estimates global peak oil -
"About 944bn barrels of oil has so far been extracted, some 764bn remains extractable in known fields, or reserves, and a further 142bn of reserves are classed as ´yet-to-find´, meaning what oil is expected to be discovered. If this is so, then the overall oil peak arrives next year..."

2005 - (april 26) Peak Oil UK conference in Edinburgh predicts prices for crude hitting $US100 per barrel by 2010.

2005 - (april 26) Matthew Simmons, pointing to the unreliability in oil figures reported by governments ("Our data collection system for oil is rubbish") claims there is "a big chance" that Saudi Arabia actually peaked in production in 1981 and is now in decline. He commented that if that were true, most major fields are being over produced. If fields are over produced that can be damaged. If damaged, their original ´probable recoverable oil´ estimates are too high.

2005 - (april) The USA Governors Ethanol Coalition (GEC) promotes the desiderata of producing at least 10% of US transportation fuel from ethanol and biodiesel as soon as possible. Almost all ethanol production in the USA at the moment is from taxpayer-funded corporate welfare corn (maize) production. More gas and oil energy is consumed in producing the fuel than the ethanol so produced contains. The GEC promotes a small proportion of the ethanol to be derived from the digestion of crop waste - high cellulose corn stems, wheat stems sawdust etc - by organisms that can digest cellulose and produce alcahol as a by-product (in the same way yeast digests sugar and produces alcohol as a waste product). This technology is experimental. Whether the cost of harvesting and transporting the waste, distilling the ethanol, and removing the sludge results in a nett energy loss or gain is yet to be determined.

2005 - (april 27) Bush calls for fast tracking of new LNG terminals, as the existing 4 in USA are inadequate for the fast increasing dependance on imported LNG.

2005 - (april) West Australias $11 billion Gorgon gas project finds a buyer for 2.5 million tonnes of Gorgon LNG (liquefied natural gas) a year USA, with the gas to be shipped to a currently non-existant terminal on the west coast.

2005 - (april 27) Bush calls for fast tracking of new specialist oil refineries to handle the poorer crudes now being produced by Saudi Arabia.

2005 - (april 27) Bush calls for fast tracking of new nuclear power plants, tacit admission the 20% of electricity produced by nuclear cannot replace demand as gas-fired stations have an increasingly squeezed supply.

2005 - (april 27) Bush calls for extending the subsidies for fuel-efficient cars to “clean diesel” vehicles, a tacit admission that modern diesels are highly efficient and affordable now, and fuel cell hydrogen cars are an expensive unrealistic fantasy.

2005 - (april 29) crude oil imports into USA reach 10.9 million barrels per day - the third highest daily import rate ever recorded. Stored crude peaks at 327 million barrels - only around 2 million barrels of storage capacity is left unfilled. This is the highest levels in 6 years. This huge extra capacity filling has kept world oil pumping capacity near its limit. The stores will see the USA over the summer holiday ´touring season´.

2005 - USA now imports almost 60% of its oil consumption. At current crude prices this costs about a billion US dollars a day.

2005 - (april) Chinas monthly imports of crude oil reach a new high of 2.99 million barrels a day for april (12.25 million tonnes for the whole month).

2005 - (june) Fu Chengyu, General Manager of China National Offshore Oil Corporation says in a news article the State Corporations annual import of LNG in 2010 is expected to reach 30 million tons, equivalent to rough 3 million tons of oil per month. This figure is expected to double by 2020, to about 6 million tons of oil per month. Most is from long term (20-25 year) ´take or pay´ large-quantity contracts with Australia and Indonesia. China is trying to substitute for oil, and ´lock in´ foreign LPG at a relatively low price while it explores its own coastal areas for gas over the next decade. It is aware of the relatively long lead time to bring in gas fields and their associated infrastructure.

2005 - (june) decision on whether or not the US west coast Longbeach LNG terminal will be permitted is delayed yet again.

2005 - (april 29) Ahmed Chalabi, described as "the pentagons darling", is named as oil minister by Iraqs pro-US Kurdish president.

2005 - (may 9) Algerian oil minister comments that OPEC will be unable to meet demand at current levels in the 4th quarter of 2005. Expected northern hemisphere winter demand can only be met if strong inventories have been built up already in the importing countries before winter, that is, in the third quarter. Look for a ´run´ on crude starting september 2005?

2005 - (may) gasoline futures for november delivery trade on the Tokyo Commodity Exchange at about $US65 a barrel.

2005 - (may) Algeria is producing near full capacity of around 1.4 million barrels per day.

2005 - (may 2) French energy economists at the French investment bank Ixis-CIB speculate that crude oil might reach $380 by 2015. They base this speculation on the ideas that crude prices increase nearly seven-fold, and annual inflation is 2.5%. However, at a certain price point recession will likely tip into deflation, due to lack of demand caused by marked collapse in industrial activity. So the 2.5% inflation may just as likely be 2.5% deflation. In addition, at a certain level of bankruptcy, it will be difficult to re-capitilise and re-open small businesses that have failed. Thus, it may be that demand for oil is simply lost, almost at any price. At least, for a decade or so. Demand might slowly recover on back of stable ´lower´ prices, until finally oil prices increase again. The economy can be compared to a punch drunk boxer. It takes a heavy hit in the first round (peak oil), but it won´t stay down, it will get up off the canvas. But before it can ´return to form´, it is knocked down yet again as oil prices once more rise. Each time the economy is laid out, its stays down for longer before struggling to its feet. Eventually, it cannot get up at all. At that point, the boxer analogy is no longer useful. We should then be thinking of metamorphosis, of the total re-organisation of all systems by the quiescent pupa, before finally emerging once again, but in radically changed form.

2005 - (may 3) "It´s too late to maintain a ´business as usual´ attitude. What is required is to manage the change that peak oil will bring in a way that causes the fewest casualties. This must be done at an economic and geopolitical level, to fend off resource wars. The US invasion of Iraq is clearly a resource war" - Richard Heinberg, author of ´Power Down: options and actions for a post-carbon world´.

2005 - commentators note that the US Federal reserve will have to raise interest rates or live with inflation flowing through from higher oil prices. If rates rise, the hugely indebted western consumers (and particularly American consumers imprudently loaned money) would not be able to meet monthly repayments or afford to roll-over loans. The consequence would be bankruptcy, recession, cut back in spending, unemployment. Petrol prices may fall with reduced consumption, but this is poor consolation to the unemployed..

2005 - USA conventional natural gas production has now fallen to about 35 billion cubic feet per day, or 6.3 million barrels of oil-equivalent per day.

2005 - (january) Turkey uses 2.6 billion cubic metres of gas more than it has contracted for from its second largest supplier, Iran. How much of this extra demand is actually Israeli demand (Turkey on-sells some if its Iranian gas to Israel) is unknown.

2005 - (january) Turkey, an American ally, "expects" to buy an additional 6 billion cubic metres of Iranian gas above its existing 25 year contract by 2007.

2005 - (january) Iran raises the price of its gas exports to Turkey by 4.5%. Turkey (?Israel) doesn´t want to pay, and goes to the International Court of Commerce for a ruling. The ruling is due in September, if Iran hasn´t been partitioned by then (north west Iran going to Turkey so long as it supplies Israel).

2005 - (march) Saudi officials claim they have raised their production of oil to 9.5 million barrels a day.

2005 - (april) Japanese government releases survey findings that China´s Chunxiao and Duanqiao gas fields on the Chinese side of the median line between China and Japan in the middle of the East China sea are geologically linked to untested gas reservoirs identified on Japans side of the line. Japan makes moves to accelerate test drilling for natural gas on it´s side of the line, fearful China will "access" Japanese gas structures. Protests in China over new Japanese school books glossing over Japans never-admitted and never apologised for large-scale crimes against humanity in China in World War 2 may be co-incidence. Or maybe not.

On April 1, the government released survey findings that China´s Chunxiao and Duanqiao gas fields are linked to Japan´s gas fields. As a countermeasure, the government plans to begin procedures in the near future to grant private developers the right to test-drill on the Japanese side of the median line.

2005 - (may) Bolivia, with the second-largest natural-gas reserves in the western hemisphere (behind Venezuela) has a law introducing a 32% tax on foreign energy companies earnings on top of an existing 18% royalty blocked by President Carlos Mesa.

2005 - (may) Bolivia has a law partially nationalising its gas and oil - currently operated by 12 foreign firms - blocked by President Carlos Mesa.

2005 - (may) USA sells ´bunker buster´ bombs to the only Arab nuclear power - Israel - apparently in preparation for them to obliterate the Iranian nuclear research facility, and possibly to destroy Irans conventionally armed ballistic missiles. Pakistan and North Korea, both with unstable governments and proven to have weapons of mass destruction, are left untouched. Neither has significant oil or gas reserves. US coercion of Iran is unlikely to seriously affect oil prices. This ´news´ item may, of course, be ´planted´ USA disinformation to dissuade Iran from supporting the euro.

2005 - China announces its 20 year plan to seize a " window of opportunity" to develop its economy and industrial base as fast as possible for the good of its people. Why is the window open for only 20 years? Presumably it knows the peak of oil has been reached, but has an optimistic scenario of 20 years, rather than the more realistic optimistic scenario of 10 years.
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Re: High Petrol Prices - unfolding history of production and procurement
2005 - (april) Japanese government releases survey findings that China´s Chunxiao and Duanqiao gas fields on the Chinese side of the median line between China and Japan in the middle of the East China sea are geologically linked to untested gas reservoirs identified on Japans side of the line. Japan makes moves to accelerate test drilling for natural gas on it´s side of the line, fearful China will "access" Japanese gas structures. Protests in China over new Japanese school books glossing over Japans never-admitted and never apologised for large-scale crimes against humanity in China in World War 2 may be co-incidence. Or maybe not.

On April 1, the government released survey findings that China´s Chunxiao and Duanqiao gas fields are linked to Japan´s gas fields. As a countermeasure, the government plans to begin procedures in the near future to grant private developers the right to test-drill on the Japanese side of the median line.

2005 - (may) Bolivia, with the second-largest natural-gas reserves in the western hemisphere (behind Venezuela) has a law introducing a 32% tax on foreign energy companies earnings on top of an existing 18% royalty blocked by President Carlos Mesa.

2005 - (may) Bolivia has a law partially nationalising its gas and oil - currently operated by 12 foreign firms - blocked by President Carlos Mesa.

2005 - (may) USA sells ´bunker buster´ bombs to the only Arab nuclear power - Israel - apparently in preparation for them to obliterate the Iranian nuclear research facility, and possibly to destroy Irans conventionally armed ballistic missiles. Pakistan and North Korea, both with unstable governments and proven to have weapons of mass destruction, are left untouched. Neither has significant oil or gas reserves. US coercion of Iran is unlikely to seriously affect oil prices. This ´news´ item may, of course, be ´planted´ USA disinformation to dissuade Iran from supporting the euro.

2005 - China announces its 20 year plan to seize a " window of opportunity" to develop its economy and industrial base as fast as possible for the good of its people. Why is the window open for only 20 years? Presumably it knows the peak of oil has been reached, but has an optimistic scenario of 20 years, rather than the more realistic optimistic scenario of 10 years.

2005 - (may) China, just before the anniversary of its mass murder of protesters in Tiannamen Square signs a $US600 million oil deal with the criminal president of Uzbekistan, Islam Karimov - fresh from murdering hundreds of Uzbek protesters.

2005 - first quarter - The Asian benchmark Singapore fuel oil prices increase nearly 50%. China allows only 4% price increase in domestic diesel prices. Clearly, China is willing to hide the true cost of fuel in order to artificially subsidise business. This shields businesses from the need to be more fuel efficient, and make the inevitable recession, bankruptcies and adjustments much steeper than they would have been if part of the true costs of doing business in China was not artificially kept off the accounts.

2005 - (may) - Norway, the worlds third largest oil exporter, cuts its forecast for 2005 oil production (inclusive of natural gas liquids), from 3.3 million barrels per day to 3.2 million barrels per day, due to ´technical glitches´. This is the same level as 2004. Total oil production is expected to rise until 2006, and then decline. Norway is west Eurasias largest gas proucer. Gas production is expected to increase, peaking in 2011 at 120 billion cubic metres per year, then declining.

2005 - Iran´s Ahwaz Bangestan oil fields production has now declined from 250,000 barrels a day to 160,000 barrels a day and is expected fall to 60,000 barrels a day within 1-2 years. Gas injection could increase production to 220,000 barrels a day, but gas is heavily used by the 67 million Iraqis to spare oil for export and to sell to generate overseas earnings to feed a wheat dependant nation with an exploding population.

2005 - Iran´s productive capacity is falling by 350,000 barrels a day every year (8% onshore and 13% offshore). Iranian officials estimate the decline rate could increase to 500,000 barrels a day every year in 5 years time. Iraq currently produces about 4 million barrels per day, but imports petrol and diesel as it has no refineries.

2005 - (may) Algerian oil minister identifies a refinery capacity limitation co-inciding with demand closing with supply
“What’s the use of having a lot of oil if you can’t refine it or cannot stock enough products to be used in the winter time...
Nobody can build a refinery in two years and people have just barely started taking decisions this year. Saudi Arabia, and others, including Libya and ourselves have taken decisions so you are going to see a lot of new refinery capacity but not within the next two to three years...” (Gulf Times, Qatar, 9th may 2005)

2005 - World refining capacity is about 84 million barrels per day.

2005 - World consumption is about 84 million barrels per day. The first tier bottleneck to producing the oil the world demands is pumping capacity. Unexpectedly, the second tier bottleneck, refining capacity, now displaces pumping capacity as the primary bottleneck to meeting world demand.

2005 - World consumption, on current trends, expected (want) to be 86-87 million barrels per day.

2005 - USA now consumes around 20 million barrels of world oil a day.

2005 - (may) US military announces it is planning "more permanent" bases in Iraq, and sees itself remaining in Iraq for "many" years to come.

2005 (may) - Italian Benito Livigni, former manager of the Italian energy company ENI and the United States’ Gulf Oil Company, claims that Iraqi’s oil reserves are estimated at 400 billion barrels, far more than the known figure of 116 billion, and giving it more reserves than Saudi Arabia. The figure include under-explored areas, and there is suggestion some data of Iraqs oil potential has been held by oil companies since the 1970´s, but kept unpublished. If true, this information would likely to be known within the higher levels of the American oil/military complex.

2005 - (may) Azerbaijani newspaper reports US and Azerbaijan have agreed to a permanent US base in the Azerbaijan (strategically important to USA for its oil and gas pipeline). The Azerbaijan government denies it.

2005 - (may) the 1,762 kilometre long Baku-Tbilisi-Ceyhan pipeline (BTC) opens, exporting 1 million barrels of oil a day from the Azerbaijan´s capital city (Baku) on the Caspian Sea to Georgia (capital city Tblisi), then on to the Turkish terminal (Ceyhan) on the Mediterranean. The cost has been around $US3.6 billion dollars, the world´s biggest energy investment so far. Filling the pipeline with oil will take about 5 months. The pipeline is buried, and while it is relatively safe from disruption during the on-going border disputes and other conflicts in the area, Turkey, in particular, is prone to earthquakes which could damage part of it. Most importantly of all, it is the only pipeline from the Caspian oil fields that doesn´t have to go through Russian territory.

2005 - (may) Russias daily oil production, was believed by analysts to be likely to increase by 370,000 barrels a day ( a 4% increase over previous years) is now estimated to increase by 230,000 barrels through 2005 (a 2.6% increase). For a variety of reasons, it is no longer expected that there will be any increase in supply in 2006, although Russian oil is not yet considered to have peaked. Russia now exports around half its oil production, almost entirely to West Eurasia, and the proportion exported is slowly increasing.

2005 - (may) analysts suggest the claim by Saudi officials that they are producing 9.5 million barrels a day may be false. OPEC estimates - based on secondary source - put Saudi production at 8.39 million barrels a day. The International Energy Agency puts it at 8.14 million barrels a day, a 34 million barrel a day difference. The difference is very important because the world is increasingly reliant on the one producer that can pump in high volume - Saudi Arabia. The oil ´crisis´ is a pumping crisis right now - and an absolute depletion crisis in 20 years or so. The difference is more important because there is no transparency in the Saudi figures. Saudi Arabia is not a modern democracy. It is an absolute autocracy, a feudal state run by absolute power, and the use of torture. No wonder figures are suspect. Real production must be inferred from the number of ships leaving Saudi ports and their capacity, or even from ´tips´ from insiders. The difference may simply be the margin or error. Even if the Saudi regime is telling the truth, it may be the amount they have available to the refiners, not the amount the refiners buy. Why would there be a discrepancy? It may be that the extra production is in high sulfur crudes which few refineries can handle.

2005 - (may 31) Iran´s OPEC governor, Hossein Kazempour Ardebili says in an interview that in summer refineries want light crude, which is easily processed into gasoline for the ´summer driving season´, but OPEC is at the limit of its capacity to produce light crude, and there is simply no more light crude pumping capacity available. "All extra levels of crude oil sent to the market stay in the oil stockpiles, since the crude oil coming to the market now has got limited refinery demand". This fills the oil stockpiles and pumps up the statistics on oil that has been produced, but the ´extra´ production is functionally useless due to lack of refineries to deal with this type of oil.

2005 - (june) Iraq will not be able to pump more than its existing production of 1.5 million barrels a day for at least the rest of this year. It had been hoped to produce an additional 300,000 barrels a day.

2005 - (june) USA first quarter vehicle sales reveal a fall of 13.5% in sales in the petrol-guzzling ´sports utility vehicle´ category.

2005 (june) US airlines are estimated to be losing about $US17,000 a minute, partly due to the increased cost of fuel. More job losses are predicted.

2005 - (june) Matthew Simons suggests, in his new book, that Saudi giant fields started losing pressure in the 1960´s and have been so heavily pumped with water since that the sustained pumping capacity is an artifact of pressurisation, and the depeletion rate is thoroughly hidden. He suggests the wells are in effect being ´secondarily´ produced at the same instance as being primarily produced. While this is unknown territory, he point to the possibility that some of these large Saudi fields could suffer a precipitous collapse in production, rather than a stepped decline. He estimates the highly production North Gharwar field would then have to have every oil drilling rig in the world working it over a ten year period to sustain current production. North Gharwar produces about 4.5 million barrels a day.

In addition, he suggests the two Iraqi giant fields ( Kirkuk and Rumelia) have been overproduced and may be in similar shape to the Saudi fields.

The supergiant Canterell complex in Mexico is highly pressurised with nitrogen gas, and is currently producing around 1 million barrels a day. If its projected steep decline is earlier than forecast, and if Gharwar collapses, then shortfall in pumping capacity may be larger than anyone may have previously projected.

2005 - (june 17th) U.S. gasoline consumption jumps to 9.53 million barrels a day - the third highest level on record.

2005 - (june 21) US Energy Department´s Energy Information Administration reports that crude inventories in the USA declined last week by1.6 million barrels over historic levels for the time of year; and yet demand for distillate fuels (petrol, diesel, and heating oil) was nearly 7% higher than the same time a year ago.

2005 - (june 22) Speculators trading on future oil supplies push the price of Brent crude to an historic high of $US58.58 per barrel.

2005 - (june 22) Oil for July delivery reaches $US59 a barrel.

2005 - (june 22) Dow Jones Industrials fall 1.5%, Nasdaq composite and Standards and Poors 500 indices fall about 1%, US Treasury 10 year junk bonds are less palatable and are sweetened with a 0.009% interest rate rise.

2005 - (june 22) branch company of the Chinese state owned oil company China National Offshore Oil Corp makes an unsolicited bid of $US18.5 billion for the USA oil company Unocal Corp. China continues its apparent strategy of carefully reducing its huge store of US dollars while simultaneously acquiring oil and gas assets. In this case, even although the price of the bid is close to the current asset value of the company, it would assist in small measure in putting some ´spine´ in the ´yuan´ (pegged by China to the dollar in order to make oil imports as cheap as possible while also making Chinese exports cheap), and allow China to denominate some oil trading in the yuan, not the dollar. The US Government will almost certainly pass laws to block Chinas acquisition, as it is a then wedge between the dollar and its oil backing.

2005 - (may 31st) China´s government backed ´Sinopec Group´ buys 40% of the Northern Lights oil sands project in northeastern Alberta. The project has a capacity to produce around 100,000 barrels per day of synthetic crude oil, at an estimated total cost over five years of $4.5 billion.

2005 - (april) Canada´s Enbridge Co and China´s PetroChina International Ltd agree to jointly build a $2.5-billion 400,000 barrels per day capacity pipeline1,160 kilometres across Canada - from Edmonton to a port in British Columbia. It will carry synthetic crude oil from Alberta´s oilsands. Half the crude would be tankered to China, the rest will probably be sold on the west coast North American market. It is expected to be ready by 2010, when it expects Canadian oilsand production to be sufficiently high to enable the pipelines use.

2005 - (june 20) - Indonesia finally cuts an acceptable deal with USA´s ExxonMobil to move ahead with the Cepu oil project, expected to ultimately yeild 500 million barrels of oil over the life of the field. This field will make little difference to the overall decline profile of the ExxonMobil global oilfield holdings.

2005 - (june 20) - Indonesias market-distorting taxpayer subsidies on the price of oil cause a massive blow-out in the subsidy budget as oil price rise rapidly. The cost to the taxpayers is estimated to reach $US11.4 billion this year - a sum that could only be met by debt. The Indonesian government says it will institute unspecified "measures" to reduce fuel consumption. It could start by removing the subsidy, a subsidy that is a form of corporate welfare to the oil companies.

2005 - (june) Agreement is reached to a multi billion dollar investment in re-working the declining Statfjord oilfield. This will allow for both relatively high oil and gas production levels to be maintained for longer and for maximal extraction of oil, gas and condensate - but will result in an accelerated decline in the daily production of the oil component of the hydrocarbon reserves in the field.

2005 - (june 22) oil prices briefly reach $US60 a barrel.

2005 - (late june) regular grade petrol at the pump in Canada ( a nett oil exporter) is now about 92 cents a litre.

2005 - (june) Diesel prices in USA reach a record high of $US2.34 a gallon. The average large freight truck does about 6 miles to the gallon. A truck may travel 500 miles a day, and with a co-driver, around 900 miles a day. In the trucking industry, fuel is the second highest expense after wages and salaries. Two thirds of freight in USA is transported by truck, burning 35 billion gallons of diesel a year. Distallate in USA is generally expected to rise about 2 to 2.5% a year. Combined petrol and diesel consumption has been nearly 7% higher than for the same period in 2004.

2005 (june) U.S. gasoline consumption reaches a new record of 4.4 million barrels a day in mid june, reflecting a 5.7% increase in petrol consumption relative to the same period last year. Clearly the price of gas is not yet high enough to "destroy demand".

2005 - The average vehicle in the USA domestic vehicle fleet has now achieved a fuel efficiency of 21 miles per gallon.

2005 - (june 30) project to recover the last of the oil from the large but low producing Masjed Soleiman field in Iran (currently producing only 5,000 barrels a day) is sold to China, with Iran receiving 15% share. It is hoped to raise production to 28,000 barrels a day, and supplemental wells might add 10,000 barrels a day to that. The contract was originally with a Canadian company, but the USA government forced it to withdraw.

2005 - (july 2) Japan becomes aware that its oil economy is fading, and money cannot substitute for actual supply based on relationships and goodwill (China´s strategy and a part of USA´s strategy), or a gun to the head (the other part of USA´s strategy) - "Japan will not be able to survive an energy war unless it breaks from an idea that was valid until several years ago, in which it was believed Japan could cope with surging oil prices by growing economically strong enough to pay more." -Yomiuri Shimbun

2005 - (july 3) In an historic first, a specialised LNG tanker berths at the United Kingdom´s new National Grid LNG terminal in Kent with a cargo of 31 million cubic metres of liquid natural gas from Algeria. This is the first time the UK has imported LNG. The UK´s North Sea gas fields are starting to decline, and the Norwegian pipeline is not yet built.

2005 - (july 3) Oil industry analyst and banker Matt Simmons, author of ´Twilight in the desert´, says "...I still think that $60-a-barrel oil is a remarkable bargain...we need a pricing committee to start taking a "cold shower" look at what the real value is. My guess is that will be somewhere between $250 and $400. The sooner oil users begin understanding what the real long-term cost of oil has to be, the easier it will be for everyone to cope with fast-rising prices for the world´s highest-volume and most expensive commodity."

2005 - (july 4th) American drivers hit the road in the holiday weekend in record numbers, in spite of gasoline being $US2.25 a gallon. Low wage workers move closer to their place of employment. Middle class start to trade in petrol gulping SUV´s for hybrid SUV´s. Middle class switch to ´the wifes´ European car instead of the massive motored American dinosaur. Some people elect to vacation 400 miles away instead of 1,000 miles away. High mileage petrol dependant small businesses such as garden care businesses with high petrol cost components become marginally profitable.

2005 - (july 5th) options contracts for December delivery at $US80 surge.

2005 - (july 5th) the International Energy Agency forecasts global oil demand to rise to a record 86.4 million barrels a day in the last quarter of 2005 (i.e. 31,536,000,000 barrels a year, or 4,288,896,000 tonnes of crude) This now aligns with more informed analysts early new year prediction, and makes a shortfall in ability to pump the demanded motor spirits very likely early in the new year 2006, or earlier if there are significant weather disruptions to refineries in USA, or if there are ´unexpected´ changes in pumping performance of Saudi or Mexican mega-fields.

2005 - (july) India loses several thousand barrels a day in oil production when the off-shore drilling platform at the Bombay North High sector of the Bombay High oil field is destroyed. The Bombay High oil field is India´s sole large oil field. Only one third of Indias total oil consumption is produced by its own oil resources, currently estimated at 5 billion proved barrels. Of those domestic resources, the Bombay High field produces more than a third of Indias total oil production. Bombay High produces 170,000 barrels of sweet light crude oil a day, contributing 14% of Indias annual domestic consumption. The field had been in decline until it was ´redeveloped´ (pressurised). The fire will set back the completion of pressurisation of the North field by about a year. One estimate has Indias oil needs increasing by a massive 60% by 2010, 1,392,700,000 barrels a year. Current global oil consumption is 30,660,000,000 barrels a year. In 1999 the USA alone used 6,205,000,000 barrels a year.

2005 - China´s oil consumption for this year is projected by commentators to be 2,272,300,000 barrels for the year, or 6.2 million barrels a day. At this consumption level, 2.6 million barrels a day will now have to be imported, 6% more imports than last year.

2005 - (july) China is desperate to meet a looming domestic oil shortfall exacerbated by industry needing to use deisel-burning generators due to China´s unreliable power supply. An agreement is made with Shell oil to form a joint venture to develop a successful method to extract organic matter from shale rock in the northeastern province of Jilin. This can then be converted to oil via a very energy expensive process. The shale-oil reserves have a proven 17.4 billion tons of oil equivalent, with a supposed ultimate potential to yeild 300 billion tons.

2005 - (july) The G8 summit is dominated by discussions on energy, despite a terrorist bombing in UK and ceaseless terrorist bombings in Iraq. The only ´good news´ is a commitment from Russia to "build up its pace of oil production and its volumes of oil exports...". Russia claims to be able to increase oil production by an additional 30 million tons, or about 602,465 barrels a day. For the moment. The G8 also established the ´Joint Oil Database Initiative´. This database is supposed to give accurate monthly data on the oil inventories, supply, and demand in 93 countries. The International Energy Forum, in charge of the database, delays issuing the first iteration until November. Why? "Difficulties" in obtaining accurate information.

2005 - (july) Indonesias state-owned oil company Pertamina finds it difficult to pay its oil bill, limits distribution to gas stations to conserve existing reserves. Gas stations run out and close. Now a nett importer, OPEC members may eject Indonesia from OPEC.

2005 - (july) Malaysian Prime Minister admits they will soon be in a similar position "Malaysia is an oil exporter, but if we do not find new oil reserves, then by 2009, we will become a net importer". Petronas, the Malaya state-owned oil company, is exploring for oil in concessions in various muslim countries overseas.

2005 - (july) oil drilling expertise remains in short supply as the impetus to find any available gas and oil accelerates. Chinese drilling crews and rigs are brought into the United States for the first time as insufficient rigs are available domestically.

2005 - (july) PetroCaribe Energy Summit, in which Cuba´s dictator Fidel Castro notes that within this decade oil will reach $US100 per barrel, prohibitively expensive to impoverished Caribbean countries. A treaty is signed in Venuezuela whereby 185,000 barrels a day of discount priced oil from Venuezuela will go to Caribbean nations, financed by low credit rates. If oil reaches $100 the interest rate will be 1%.

2005 - (july 13) gas for delivery in January 2006 to the UK trades at £1.07 per therm - the equivalent of $US18.65 per million Btu, or in crude oil equivalent, $US108 a barrel. The price reflects the expectation of high oil prices in Europe for the rest of 2005, and the fact that the UK will be a nett gas importer by 2006. Spring-summer water accumulation behind hydro dams has been poor this year, forcing increased reliance on gas for electricity generation. The lack of water has also reduced nuclear power plant output, as nuclear plants are major users of water.

2005 - (july) in a clever device to limit petrol consumption under the guise of concern for ´global warming´, the British Government announces the idea of introducing a form of energy rationing called a “personal carbon allowance.” This allows each person in the country a private ´carbon allocation´ which in turn allows a certain amount of ´free´ vehicular use. Each litre of gasoline uses 1 carbon unit, and this is then deducted from the free allocation in the citizens´ ´account´. Those who exceed their alloted carbon entitlement through fuel use pay a tax. Alternatively they can buy someone elses underused allotment on the free market. Thus, those who use public transport are not penalised, and those who are profligate petrol wasters pay for the privilege.

2005 - (july 8th) USA Secretary of Energy Samuel Bodman tells reporters major oil suppliers including Saudi Arabia "are right at their ragged edge" in regard to their ability to meet rising global demand for oil. "We are in a new situation... we are likely at least in the near-term to be dealing with a different pricing regime than we have seen before." This is US Government fog-speak for "the price of gas is going to go up dramatically and there is nothing the government can do about it". From now on, the US government will be increasingly forced to admit the truth that it is bankrupt of ideas to meet the gathering crisis - a crisis it has long known was on its way. It will doubtless try to ´unload´ the problem onto the public by hypocritically and duplicitously appealling for "everyone to work together to face this new challenge".

2005 - (July 13th) American Automobile Association´s daily price survey shows the national average for diesel at $US2.46.

2005 - (July 18th) Refinery shutdowns in Texas and Louisiana as precautions against possible damage from Hurricane Dennis and Tropical Storm Cindy take around 200,000 barrels of daily gasoline production off the market for that period. This is a over 4% of daily US gasoline demand.

Facilities for crude oil imports for further refining are also hit. The biggest US petroleum import terminal - 20 miles off the coast of Louisiana - handling the receiving and storage of 1 million barrels a day, closes for 2 days.

2005 - (july) Middle East oil states continue to repratriate money invested in USA and other western states. According to Salman bin Dasmal of Dubai Holdings, the Saudi dictatorship alone has moved about a third of their trillion-dollar overseas portfolio out of USA and some western countries. Muhammad Al-Jasser, the Vice-Governor of the Saudi central bank, the Saudi Arabian Monetary Agency, announces Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates are planning an Arabian regional currency similar to the Euro. The proposed regional currency could be linked to the euro, or to a basket of currencies. As the oil producers sees the USA oil-dependant and deeply indebted economy in trouble they are anxious not to be caught with too many junk bonds on hand.

2005 - (July 25th) China stops pegging its currency to the US dollar. The central bank will attempt to "manage" it so it stays within a band plus or minus 0.3% of the value of the US dollar. It ´float´ within this tiny range according to the movement of a "basket of currencies" with the dollar as just one component. China has a tiger by the tail. It can´t afford to hang onto dollars forever. It is too scared to let go. It is positioning itself so that it can adjust incrementally or quickly, according to circumstance.

2005 - Peugeots advanced diesel technology in a standard production sedan sets new and meaningful fuel economy records. The Peugeot 407 HDi turbo diesel crosses the continent of Australia - nearly 3,000 kilometres - and used only $A150 of fuel. The advanced diesel engine used an average of 3.45 litres of diesel per 100kms (about 70 mpg).

2005 - (july) Honda´s hybrid petrol-electric motor is redesigned for increased efficiency and greater power output. The wheels are now driven only by electricity at low speed ( as Toyota´s hybrids always have). The new powertrain is expected to use 5% less petrol than the current model, which achieves a ´town and country´ fuel economy of less than 6 litres per 100 kms (about 50 mpg).

2005 - (july) In Australia, the demand for small cars rose 26%, and the demand for sports utility vehicles (SUV´s) fell five%, and demand for large cars fell 13%.

2005 - (july) A Welsh engineering company, IMP Ltd, claims to have invented a revolutionary new electric engine that produces 400% more torque than any electric motor unit currently in production. The normal bulky permanent magnets have been replaced with electric pulses transmitted across a number of rotors. It needs no gears, produces little heat, has greatly reduced size and weight (while being fully size scalable) and therefore a greatly increased power to weight ratio. The director of the company claims the acceleration of an electric vehicle based on these motors will exceed that of expensive high performance sports cars.

It is envisaged the new electric motors could be used as the sole drive of all-electric cars. It is envisaged that each wheel could have its own drive motor, with each wheel powered by two lightweight batteries. By powering only either the front or rear wheels, the number of batteeries could be cut to four, giving lower power, but longer range between recharges. As there are permanant magnets, the power can be switched off going downhill and the wheels will free-wheel, acting as generators to top up the batteries.

2005 - (august) Chevron Oil Company launches a public community involvement initiative, in response to the truth of the fading of cheap oil becoming better known, overwhelmingly via the internet and via European newspapers -
"Energy will be one of the defining issues of this century, and one thing is clear: the era of easy oil is over. What we all do next will determine how well we meet the energy needs of the entire world in this century and beyond....Many of the world’s oil and gas fields are maturing. And new energy discoveries are mainly occurring in places where resources are difficult to extract—physically, technically, economically, and politically. When growing demand meets tighter supplies, the result is more competition for the same resources....We can wait until a crisis forces us to do something. Or we can commit to working together, and start by asking the tough questions: How do we meet the energy needs of the developing world and those of industrialized nations? ...Whatever actions we take, we must look not just to next year, but to the next 50 years....We call upon scientists and educators, politicians and policymakers, environmentalists, leaders of industry and each one of you to be part of reshaping the next era of energy."
[link to www.willyoujoinus.com]

All major oil companies are faced with ´finessing´ the fact of declining oil products - and therefore greatly increased prices - to the consumer. BP ("Beyond Petroleum") was the leader. Eventually all companies (and governments) will have to accept the public worry about the future of supply as well as the outrage over price increases and shortages, and deflect it with some public display of apparent concern.

The truth, well known to the industry and its political-military complex, is that transition - fiercely difficult even in the very best of circumstances - is now 20 years or more too late. As the oil economy steadily, irrevocably, fades, severe physical and emotional dislocation becomes increasingly manifest.

Huge amounts of capital are needed to start the transition to decentralisation, canalisation, re-railing, hybrid power shiping, solar power via photovoltaics, massive scale wind and wave power, and all the other massive infrastructural changes. Huge capital will surely be in very short supply within 20 years. Only feudal and corrupt Middle East oil producers will have this quantum of capital. And oil companies.

2005 - (august 1) "The Pentagon, acting under instructions from Vice President Dick Cheney´s office, has tasked the United States Strategic Command (STRATCOM) with drawing up a contingency plan to be employed in response to another 9/11-type terrorist attack on the United States. The plan includes a large-scale air assault on Iran employing both conventional and tactical nuclear weapons. Within Iran there are more than 450 major strategic targets, including numerous suspected nuclear-weapons-program development sites...As in the case of Iraq, the response is not conditional on Iran actually being involved in the act of terrorism directed against the United States. Several senior Air Force officers involved in the planning are reportedly appalled at the implications of what they are doing – that Iran is being set up for an unprovoked nuclear attack – but no one is prepared to damage his career by posing any objections"
Philip Giraldi, “In Case of Emergency, Nuke Iran,” American Conservative, August 1, 2005
This may of course be ´planted´ disinformation to dissuade Iran from the euro. Or maybe not.

2005 - (august 2) The United Arab Emirates disputes the border between itself and Saudi Arabia at the point where it over-lays the giant Shaybah oilfield, with proven reserves of 15.7 billion barrels currently remaining. At stake is the belief that new techniques could raise recoverable oil to 18 billion barrels. More importantly, the field contains 25 trillion cubic feet of gas.

2005 - In many countries motorists are saving money on high petrol costs by turning to regular gas for their cars. Automotive experts claim using lower octane ´regular´ ( typically 87 octane ) in modern computer-controlled engines does no harm, as the timing is automatically adjusted to the richness of the fuel-air mix. The possible exceptions are turbo-charged and high-performance engines. The only drop in power in most cars is when the vehicle is being driven hard and fast - not a likely scenario for those waching their petrol consumption. In some vehicles mileage even improves when regular is used. Older vehicle, especially those with carburettors rather than fuel injection, may experience pre-ignition or ´pinking´ when the car is under load. Well tuned and driven carefully, pinking may not necessarily occur, even in carburettor fueled autos. Premium petrol is typically 91 octane, although some 98 octane fuels are now being introduced. The main benefit is to the oil companies and the gas stations, which have a higher profit margin on the so-called premium gas.

2005 - (august) Mexico´s state owned oil company, Petroleos Mexicanos (Pemex) says it expects its second biggest oilfield, Ku-Maloob-Zaapto, more than double crude output to 800,000 barrels a day within five years. The size of the production increase means it is likely to be pressurising the field, hastening its ultimate decline. Mexico´s massive Canterell field continues to decline.

2005 - (august) Mexico´s 56,000 kilometres of oil pipelines, many built in the 60´s and 70´s, are 20 years beyond obsolete. 40% are either damaged or corroded. The Mexican government has supplied only a third of the estimated capital amount needed for repairs and replacement.

2005 - (august) while US refineries have been shown as operating at less than full capacity, it is increasingly apparent that this is because they can´t, not because they lack crude to refine. Plants have been over-pushed to try to meet demand. The result is unexpected shutdowns due to plant failure and accidents. The latest refinery forced to shut down is Sunoco in Philadelphia, closed following a fire. It would normally produce 200,000 barrels a day of distillates. Large capacity refineries that have recently experienced interuptions to operation include those of BP, Exxon Mobil and Valero. BP´s Texas City refinery recently had their second fire in four months, and then had to shut the gasoline cracking unit for ´maintenance repairs´. As the US refineries age, corrosion and breakdown become increaasingly problematic.

2005 - (august 12th) oil is $US66 a barrel.


´Secret US plans for Iraq´s oil´ story reported by Greg Palast.
Published by BBC NEWS: 2005/03/17 15:41:31 GMT
URL: [link to news.bbc.co.uk]

Aleklett, K,Campbell, CJ. ´The Peak and Decline of World Oil and Gas Production´
published by the Association for the Study of Peak Oil and Gas. www.asponews.org .

Bakhtiari, AM. 2002. ´2002 to see birth of New World Energy Order´
Oil and Gas Journal, January 7, 2002.

Campbell, CJ. 1999. ´The imminent Peak of World Oil Production´.
Presentation to a House of Commons All-Party Committee on July 7 1999.
[link to www.hubbertpeak.com]

BP Ltd ´Petroleum Review of 2004´

Deffeyes, Kenneth S.2001. ´Peak of world oil production´
Paper no. 83-0,Geological Society of America Annual Meeting, November 2001. gsa.confex.com

Engdahl FW.2003. ´A New American Century? Iraq and the hidden euro-dollar wars´
[link to www.currentconcerns.ch]

Hirsch, Bezdek and Wendlings report ´The Peaking of World Oil production: Impacts, Mitigation, & Risk Management´, in a March 2005 report to the US Department of Energy.

Simmons, MR. 2002. ´The World`s Giant Oilfields´
M. King Hubbert Center for Petroleum Supply Studies, Colorado School of Mines, January 2002.

Simmons, Matthew. 2004. ´The peak oil debate: crisis or comedy?´ Presentation at the SPE Annual Technical Conference September 27, 2004, held at Houston, Texas, USA.

U.S. Department of State. Foreign Relations of the United States. 1945, viii, 45, cited in Joyce and Gabriel Kolko, The limits of power, Harper & Row, 1972

Multinational Oil Corporations and U.S. Foreign Policy, report to the Committee on Foreign Relations, U.S. Senate, 2 Jan 1975


© Copyright 2005 Sustainable Living Organisation
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Anonymous Coward
12/08/2005 10:08 AM
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Re: High Petrol Prices - unfolding history of production and procurement
I guess all that talk about Peak oil last year may have had some merit. The only solution is quick invention of new power sources. This scenario is unlikely however. I´m beginning to see the water boiling.
12/08/2005 10:08 AM
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2005 - (august 1) "The Pentagon, acting under instructions from Vice President Dick Cheney´s office, has tasked the United States Strategic Command (STRATCOM) with drawing up a contingency plan to be employed in response to another 9/11-type terrorist attack on the United States. The plan includes a large-scale air assault on Iran employing both conventional and tactical nuclear weapons. Within Iran there are more than 450 major strategic targets, including numerous suspected nuclear-weapons-program development sites...As in the case of Iraq, the response is not conditional on Iran actually being involved in the act of terrorism directed against the United States. Several senior Air Force officers involved in the planning are reportedly appalled at the implications of what they are doing – that Iran is being set up for an unprovoked nuclear attack – but no one is prepared to damage his career by posing any objections"
Philip Giraldi, “In Case of Emergency, Nuke Iran,” American Conservative, August 1, 2005
This may of course be ´planted´ disinformation to dissuade Iran from the euro. Or maybe not.

Read more
[link to www.SustainableLiving.info]

Last Edited by Account Deleted by User on 09/21/2011 04:11 AM
12/08/2005 10:08 AM
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Anonymous Coward
12/08/2005 10:08 AM
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Re: High Petrol Prices - unfolding history of production and procurement
Don´t forget this one from 1954:

After 5 decades, the Anglo-Persian Oil Company, having a large ownership stake in oil fields in Persia (Iran) and Iraq, renamed it as BRITISH PETROLEUM - BP - in December, courtesy of the City of London bankers and oil shareholders.

In 1970s, BP acquired the Standard Oil of Ohio (SOHIO) - the first major oil company formed by John D. Rockefeller Sr.

In 2001, BP acquired Amoco (the former Standard Oil of Indiana) and became BPAmoco.

In 2002, BP dropped Amoco as namesake and renamed its full title as "Beyond Petroleum".

In 2003, it was revealed that Halliburton´s no. 1 shareholder is BP, with half percentage ownership stake.

In 2003-2004, Royal Dutch Shell loses its 2nd place as one of the largest petrochemical co. in the world. BP moved into the 2nd place. ExxonMobile (the Standard Oil of New Jersey/Esso of UK and the Standard Oil of New York, respectively) reigns supreme.

In 2004, Lukoil (Russia´s largest petrochemical co,) and BP signed a new joint pipeline development deal through the Caspian Sea regions via Afghanistan via Siberia.