by Timaeus on June 2, 2011
The cat is starting to come out of the bag. See this latest Globe and Mail article.
Apparently advances in new drilling technologies are starting to kick in and momentum is growing as CAPP has predicted the first increases in Canadian conventional oil production after decades of decline.
North Dakota Bakken is also starting to have a visible contribution to American oil production as well…
This is from some of the most mature and developed hydrocarbon basins in the world. For better or worse, one has to salute the resourcefulness of professionals / businesses and stable regulatory frameworks that has allowed this innovation to occur.
Perhaps the peak of oil will just be an ever-undulating plateau?
Let’s hope so. If civilization has enough energy, it at least has the potential to confront and overcome it’s challenges.
by Timaeus on March 24, 2011
A very illuminating chart borrowed from Early Warning blog.
It puts recent rises in crop prices into a long term perspective. Over the last 100 years civilization has done a pretty good job at meeting it’s own agricultural needs.
As Stuart Staniford at Early Warning points out: long term declining prices in food crops has probably led to relative underinvestment in production over time…. meaning it is likely that the capacity exists to produce more should price trends make it more economic.
The world’s not a perfect place, but the sky’s not falling in yet either… at least in terms of food production.
by Timaeus on February 22, 2011
The dramatic change in Natural Gas Reserves and production forecasts in N. America over the last few years due to horizontal drilling and fracturing of ”Shale/Tight” gas zones, has got me thinking more seriously about the possibility that a similar phenomenon could be possible with oil… maybe even world oil?
The most well known play is the the Bakken shale oil play in N. Dakota, where there has been significant success and steadily increasing oil production from a zone that was not so long ago considered of no value. And, in the Albertan energy industry where I am most familiar, most small and large oil companies these days are exploring formerly ‘tight’ oil reservoirs … and a good deal of them are having success. New light oil is flowing out of the ground again, but for a change the plays are often more laterally extensive and thicker.
Our hydrocarbon basins in N. America are extremely mature relative to the rest of the world, but the technical expertise, infrastructure, and economics exist here to support the to development of these more difficult to produce reserves. Of course, economics and the EROI (energy return on investment) will ultimately define how successful these plays will be, but there will be offset somewhat by increasing technical expertise, growing experience, and continued drilling technology progress.
It’s far too soon to tell if this could have an impact on peak oil theory, but I’m going to go out on a limb now and regard it as distinct a possibility. Many of the world’s oil producing basins are far less developed than N. America’s, and if this trend of initial success were one day applied on a global scale… who knows?
For a very illuminating and more sobering assessment of the challenges concerning these plays check out this post at ”our finite world” blog.
by Timaeus on February 11, 2011
Here’s a interesting blog post from Paul Krugman on commodity prices and inflation.
Food for thought
by Timaeus on December 18, 2010
Economic growth is starting to return in the developed world, but debt level’s are still bloated and de-leveraging is barely under way. Markets are responding positively, but dangers lurk.
Sovereign debt problems are blossoming across Europe due to excesses generated in part by the inherent instabilities of a shared currency among so many diverse economies. Austerity measures and financial loans from economically stronger European Union members appear to be putting off the problem until a future date, but for how long and at what cost will the weaker nations suffer for the sake of a greater European community?
This slow burning crisis that started on Wall Street two years ago will severely test the resolve of the European Union. Once one nation decides the cost of leaving the Euro behind is going to be less than the cost of austerity and de-leveraging, the Euro is done. For a region with such a fractious ethnic and political history, it would be reckless to assume cooperation will prevail.
The stakes are massive for all involved, and possible disintegration will not be officially/publicly contemplated. If the Euro unravels it will be sudden and without much warning.
Ride the market higher for now, but keep your stops in place… social unrest in Europe may be the catalyst.
