Peak Oil - scaremongering again

Aljazeera has jumped on the peak oil bandwagon! Their feature "the scourge of peak oil" is alarmist and lacks economic justification. Dahr Jamail and the chaps in Doha did not do their homework this time, drafting a scaremongering senseless piece.

World oil production - 1970-2010

Many of the arguments proposed have long been discredited by economists and the concept is bogus modelling. The Hubbert curve is a mere Malthusian curiosity. We have reserves for decades and as the prices increase, so will reserves, as new exploration is justified and deposits with higher extraction costs become viable. Scarcity of cheap reserves may slowly rise prices, but brings other reserves to the market. New technology changes both supply and demand and substitution cannot be ignored. Economic exhaustion is not anywhere near, and economic exhaustion will precede physical exhaustion.

Anyway, today's prices already include the best available information about the market, so they will not have exponential growth as prophets of doom try to spread to attract followers.

Marion King Hubbert - geoscientist who introduced the Peak Oil concept

15% probability of oil in the Portuguese offshore

Despite decades of exploration activity, and some sub-commercial production in the Lusitanian basin, Portugal has yet to discover a commercially viable oil deposit.

However the she search for oil is on again in the Portuguese offshore. This time Petrobas, Petrogal and Partex are the main players.

In a first phase USD$90 millions is being spent in 2 and 3D analysis of the the local formations. A test well is expected to cost USD$20 million. Petrobras estimates the chances of success at 15%, but reveals that their research points to a positive EMV, i.e. either very large reserves or an even larger disappointment.

Sources at the Colorado School of Mines were very skeptical about the conclusions reached by Petrobras and suggested other reasons beyond pure economics may explain the investment at this stage.

Can Portugal be the new Norway?

map of the Portuguese Exclusive Economic Zone in the Atlantic

Mining: 30% of exploration companies expected to close

Independent research organization the Fraser Institute has released its Survey of Mining Companies 2008/2009, based on the opinions of 658 mining executives and managers worldwide.

Economic slowdown led the vast majority of mining executives to expect a severe contraction in exploration activity, and at least 30 percent of exploration companies going out of business.

Udachnaya pipe open-pit diamond mine, Yakutia, Russia

Oil at $100

Happy 2008!

Nice new year news: crude oil reaches $100.

Serves us well in the West for engaging in or supporting stupid wars, and moreover for leaving natural resources in the hands of greedy regimes in states that for the most part should never have become independent in the first place!

oil rig fireworks

Bravo Western world!