Posted on 3/29/2010, 5:27:55 PM by Lorianne
The U.S. Department of Energy admits that “a chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 “if the investment is not there”, according to an exclusive interview with Glen Sweetnam, main official expert on oil market in the Obama administration.
This warning on oil output issued by Obama’s energy administration comes at a time when world demand for oil is on the rise again, and investments in many drilling projects have been frozen in the aftermath of the tumbling of crude prices and of the financial crisis.
Glen Sweetnam, director of the International, Economic and Greenhouse Gas division of the Energy Information Administration at the DoE, does not say that investments will not be “there”. Yet the answer to the issue of knowing when, where and in which quantities additional sources of oil should be put on-stream remains widely “unidentified” in the eyes of the most prominent official analyst on energy inside the Obama administration.
The DoE dismisses the “peak oil” theory, which assumes that world crude oil production should irreversibly decrease in a nearby future, in want of suffisant fresh oil reserves yet to be exploited. The Obama administration of Energy supports the alternative hypothesis of an “undulating plateau”. Lauren Mayne, responsible for liquid fuel prospects at the DoE, explains : “Once maximum world oil production is reached, that level will be approximately maintained for several years thereafter, creating an undulating plateau. After this plateau period, production will experience a decline.”
Glen Sweetnam, who heads the publication of DoEs annual International Energy Outlook, agrees that what he identifies as a possible decline of liquid fuels production between 2011 and 2015 could be the first stage of the “undulating plateau” pattern, which will start “once maximum world oil production is reached”.
M. Auzanneau - After 2011 and until 2015, do you acknowledge that if adequate investment is not there, a chance exists that we may experience a first stage of decline in the “undulating plateau” you describe ?
GLEN SWEETNAM - I agree, if the investment is not there, a chance exists that we may experience a decline. If we do, I would expect investment in new capacity to increase if there is still demand for oil.
Glen Sweetnam acknowledges the possibility of a close-by and unexpected fall of world liquid fuels production in an email interview, after several requests of details about a round-table of oil economists that Mr Sweetnam held on April 7, 2009 in Washington, DC.
The DoE April 2009 round-table, untitled “Meeting the Growing Demand for Liquid (fuels)“, was semi-public. Yet it remained unnoticed and unjustly, as it put forward forecasts that are far more pessimistic than any analysis the DoE has ever delivered.
Page 8 of the presentation document of the round-table, a graph shows that the DoE is expecting a decline of the total of all known sources of liquid fuels supplies after 2011.
The graph labels as “unidentified” the additional supply projects needed to fill in a gap that is expected to grow after 2011 between rising demand and decline of known sources of supply that the DoE supposes will start that year. The declining production foreseen by the DoE concerns the total of existing sources of liquid fuels plus the new production projects that are supposed to come on-stream before 2012.
The DoE predicts that the decline of identified sources of supply will be steady and sharp : - 2 percent a year, from 87 million barrels per day (Mbpd) in 2011 to just 80 Mbpd in 2015. At that time, the world demand for oil and other liquid fuels should have climbed up to 90 Mbpd, according to the presentation document.
“Unidentified” additional liquid fuels projects would therefore have to fill in a 10 Mbpd gap between supplies and demand within less than 5 years. 10 Mbpd is almost the equivalent of the oil production of Saudi Arabia, world top producer with 10.8 Mbpd.
(excerpted)
They seem to expect some imaginary 'investors' to come in to save the day, presumably with ethanol or some other mystery fuel as yet undiscovered or developed.
This is the warning shot. Expect a sharp rise in the price of gasoline starting in 2011. If libs had their way, gas would be $20 a gallon.
“.... but the Obama administration doesn’t seem keen on exploring/finding/extracting/refining.”
::::::::
Anything that hurts America, is always welcome in the Obama administration. Their position on “energy availability” is very clear. Just like their position on everything else they touch....
“They seem to expect some imaginary ‘investors’ to come in to save the day, presumably with ethanol or some other mystery fuel as yet undiscovered or developed.”
It’s more than expectation. The new age, energy dreamers believe the magic will happen when they turn the lights off. They have faith.
These are supremely arrogant and supremely ignorant people. They are totally absorbed in their brilliance and ideology, both are not worth a rats ass.
And yet the amount of identified petroleum reserves increases every year as more oil is found then is drilled.
This warning on oil output issued by Obama’s energy administration comes at a time when world demand for oil is on the rise again, and investments in many drilling projects have been frozen in the aftermath of the tumbling of crude prices and of the financial crisis.
Sounds like a lot of double and triple talk. Except for the run-up to $147 per barrel, the recent price for crude in the $75 to $85 range is the highest it's ever been on a consistent basis. The price is on a new, higher plateau after the record run-up in 2007 and 2008 about $20 to $40 higher than it was back in 2006 and 2007.
I bet there'd be quite of bit of new exploration off the US shorelines if Obama didn't have a ban on it.
I believe you are right, they are warning. However it is puzzling.
If they could, it would seem that they would deter this rise until AFTER Nov 2012. Perhaps they know they cannot?
Anything that hurts America, is always welcome in the Obama administration.
They want us on our knees and won’t stop until WE stop them.
we have plenty of oil but we also have scumbags who won’t let us get at it
Bears repeating.
Bookmark - this is consistent with what Jim Puplava of FinancialSense.com has been saying for the last 2 years I’ve been listening to his weekly podcast. He says to expect output to max out somewhere between 2012-2015 given the current path the nations are taking.
All of that puts the U.S. in a position that war for oil or
complete economic collapse will be our only choices.
You can't frustrate every source of domestic energy
without consequences. Our enemies will blackmail us
to the extent that we are vulnerable to blackmail.
0bama, the Democrats and RINOs are leading us into a real war for oil.
A war we won't have the energy to fight.
A war we don't need to fight because we have our own resources.
I recall an announcement in the last week or so about finding formations in Venezuela? that were bigger than Saudi Arabia. Bigger than ALL of Saudi Arabia.
Toss in the Bakken shield stuff, oil in the Gulf of Mexico, the Arctic floor, and whatever is in Iran (Iran probably has more than all the rest of the mideast combined), and we should have enough to grease the skids for a while.
I don’t think that the fact it is there is the issue at hand.
You know, it makes me think of how Obama does so much for the Saudi/ muslim cause. In this case, if we do not bring the product on stream and there is a shortage, the increased benefit in price goes to the mideast. While he is destroying us here, he is increasing the longrun potential of the mid east oil kingdoms.
Not only is he financially bankrupting us here today, indenturing future generations to debt, he is also destroying our access to energy and continuity thereof. This directly affects industry and the economy. But then again he has us on the path to all time unemployment already...
Every policy and program is contrary to America... but the people let him linger on....
We have more oil than the saudi’s and its on the land and its easy to get and yet they predict an oil shortage.
Red between the lines . They are getting ready to perform sodomy on the American public.
Canada alone has enough to supply the USA for over a hundred years in discovered oil shale.
And that’s not even counting what you have in ANWAR and in your own shale deposits.
This is a manufactured crisis. The solution is real simple. Drill baby drill, and get the government the hell out of the way.
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