ENERGY: by Peter WestmoreNews Weekly
Good news! New oil and gas finds around the world
, December 11, 2010
Contrary to what is widely believed, new energy discoveries announced this year have guaranteed that the world will have abundant supplies of oil and natural gas into the foreseeable future.
The discoveries include massive new reserves of natural gas in the United States and China, natural gas off the coast of Australia, and giant oil fields off the coasts of South America and Africa.
For many years, doomsday theorists have predicted "peak oil", the imminent moment when oil production reaches a peak, after which the rate of production enters a terminal decline. Some have claimed that global petroleum extraction has already peaked, and the world is about to go into a period of rapid decline in energy availability.
Geologist Colin Campbell, the founder of the Association for the Study of Peak Oil and Gas, predicted in 2002 that peak oil would occur in 2010. His ideas were accepted by various UN agencies and national governments.
This was one of the driving forces behind the push for renewable energies, and government subsidies being provided for renewables throughout the world.
Following the global financial crisis, these subsidies are being cut back in many countries, leading to fears that the world may face acute energy shortages. However, the latest discoveries show that this will not happen.
A New York Times
columnist, Clifford Krauss, wrote on November 16: "Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation."
Krauss added that "another wave of natural gas drilling has taken off in shale rock fields across the United States, and more shale gas drilling is just beginning in Europe and Asia. Add to that an increase in liquefied natural gas export terminals around the world that connected gas, which once had to be flared off, to the world market, and gas prices have plummeted.
"Energy experts now predict decades of residential and commercial power at reasonable prices. Simply put, the world of energy has once again been turned upside down."
Krauss did not mention the massive expansion currently underway in the Timor Sea, where natural gas contracts worth tens of billions of dollars have been signed with Japan, China and South Korea.
The current expansion of petroleum production owes something to the two oil shocks which have occurred over the past 10 years. The first of these was due to the invasion of Iraq, which created massive uncertainty over the availability of Middle East oil. The second arose in 2008 when the massive expansion of oil consumption in China and India caused supply shortages around the world, and oil prices rocketed up to $US150 a barrel.
They have since fallen to about $US80, just over half that figure.
What is most extraordinary about the recent discoveries is that they come at a time when the International Energy Agency estimates that over the next 25 years, global energy demand will increase by about a third. Oil demand is predicted to grow to 99 million barrels a day in 2035, compared to 84 million barrels a day in 2009.
One of the most pleasing aspects of the new discoveries is that they come from different parts of the world and from different sources, making the world less vulnerable to the predatory policies of the Organisation of Petroleum Exporting Countries (OPEC), and to political strife in the Middle East.
Krauss pointed out that one of the most interesting questions about future oil production involved Iraq which currently produces only about 2.5 million barrels a day, less than 3 per cent of world production.
Since the overthrow of Saddam Hussein, international oil companies have conducted a major exploration and development program which could lead to the production of 12 million barrels a day by 2020. This is more than Saudi Arabia produces today.CBS News
reported that in the last few years the equivalent of two Saudi Arabias of oil production had been discovered in the form of natural gas in the United States. (CBS, November 14, 2010).
, the business news organisation, reported recently a statement by the China National Petroleum Corporation that it intended to treble its production of unconventional natural gas (from coal-seam and shale gas) over the next five years, both to meet growing energy demand from domestic sources and reduce the country's dependence on imported coal. (Bloomberg's
, November 19, 2010).
These developments come at a time when subsidies for alternative energy in some European countries are being scaled back due to the financial crisis in the Eurozone.
Spain, Slovakia and the Czech Republic have all announced either cuts to renewable energy subsidies, or the removal of tax breaks on them.