More OIL WARNINGS
Posted by: prophetic <prophetic@...>
theory, which has caused growing alarm in some quarters over
the last couple of years. This is based around the fact that the
danger lies at the "halfway" point of the Oil Nations running out of
oil - not when the last drop is consumed. Some experts place this
"half-way" point during 2005 - very soon. They say our whole way
of life may change within years. Though this could well be
"alarmist", certainly major disruptions could occur in the not-too-
distant future. Our whole society is built on cheap energy and
cheap oil. But it is difficult to tell how bad things may become.
By the way, this is not some "fringe" theory. It was the subject of
a front-page Wall Street Journal report in September 2004.
Our response to such crises can never be "fear". Our response
must be - "The hour is late. Let us get busy in the harvest fields,
for the night comes when no man can work." By the way, the
recent hurricane damage plays into this also. It looks to be
several months before the US Oil Industry will recover. The
New York Times reports: "As of yesterday, 11 major refineries,
accounting for 18 percent of the nation's total capacity, remained closed."
Below - an insightful article on 'Peak Oil':
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"Will OIL SUPPLIES DRY UP?"
-TheTrumpet.com (Oct 6).
Global oil demand is white-hot and getting hotter. Worrisome signs
loom that supplies are peaking. What will happen when the long-
feared oil crunch becomes reality?
Over the past seven years, the price of oil has skyrocketed.
For the first time ever, on August 29, crude oil prices on the New
York Mercantile Exchange topped $70 per barrel. Only eight years
ago, crude oil traded for just $10.50 per barrel. Goldman Sachs is
predicting possible oil spikes to $80 over the short term and $105
over the long term.
Why are prices so high?
According to oil analyst Kenneth Deffeyes, We are facing an
unprecedented problem. World oil production has stopped growing;
declines in production are about to begin. For the first time since
the Industrial Revolution, the geological supply of an essential
resource will not meet demand (Beyond Oil, the View From Hubberts Peak).
These record levels are reminiscent of the 1970s oil shock and have
caused some people to wonder if we really have reached
Hubberts Peak. Hubbert was an American geophysicist who, in
1956, correctly predicted that peak oil production within the
United States would occur around 1969. U.S. production did peak
in 1970 and since then has steadily fallen.
Hubbert also predicted that global oil production would peak in
2000, begin dropping off slowly at first, and then decline more
rapidly after about 2005. On this prediction, Hubbert has been
proven wrong, so far. Over the past decade, world production rates
have slightly increased.
However, there are indications that Hubbert's projections were not
far off. A supply crunch looms.
Much of the worlds oil production comes from old discoveries. The
last giant oil finds were discovered in the late 1960s in Alaska, the
North Sea and Siberia. Alaska peaked in the 1990s at 2 million
barrels daily and now produces less than half of that. The North
Sea peaked six years ago and is now maxed out at about 75
percent of its peak. Siberia, too, produces several million barrels
per day less than its peak production several years ago.
Saudi Arabian oil fields are also aging. Ninety percent of Saudi oil
comes from six gigantic fields, all of which were discovered before
1970. According to one expert, the largest Saudi oil field, Ghawar,
that has produced over half of all Saudi oil during the past 50
years, is already past its peak and is likely entering a period of
accelerated decline (Daily Reckoning, September 29).
The world is finding it harder to discover oil. In 2000, there were
only 13 major oil discoveries; in 2001, six; in 2002, two; and in
2003, none (Business Line, July 29). Much of the oil being found
is of poorer quality and is more costly to extract.
Many countries are looking north of Americas border at the 175
billion barrels of oil in Canadas oil sands as an abundant fuel
source. The oil sands, however, are difficult and expensive to
extract. Worse, the time required to delineate the required
resource, develop a mining plan, obtain the proper permitting and
construct needed infrastructure can be years.
Meanwhile, oil demand is rapidly accelerating.
Recently, Asian demand has been leading the way and is expected
to double over the next 8 to 10 years. The International Energy
Agency is predicting that global oil demand will hit record levels
during the fourth quarter of this year.
About a decade ago, China was a net exporter of oil. Now, China
has become the worlds third-largest importer of oil (behind the
United States and Japan), and the second-largest oil consumer.
As developing countries continue to industrialize and become more
urbanized, their oil consumption increases. Industrialized countries
use an average of 18 barrels of oil per person per year, while people
in developing countries only use two barrels of oil per year.
According to the Institute Francais de Petrole, if all countries
consumed oil on a per capita basis equal to that of the United
States, all the world's known oil resources would be gone in eight
short years.
Most of the worlds industrialized and rapidly developing countries
are dependent on foreign oil. The United States is the worlds
largest consumer and importer of oil. In 2004, the United States
imported 58 percent of the 20.7 million barrels of oil per day it consumed.
European countries are even more dependent on foreign oil. The
EU now imports over 80 percent of its oil needs, a trend that is
only getting worse. Last year Germany, the worlds fourth-largest
oil consumer, had to import more than 92 percent of its oil. France,
Italy and Spain, the worlds sixth-, seventh- and eighth-largest
importers respectively, all had to import over 94 percent of their oil.
According to the Energy Information Administration, the rest of
Europe, excluding the United Kingdom and Scandinavia, are not
much better off.
Parts of Asia, including Japan, also rely heavily on foreign oil.
Japan, the worlds third-largest oil consumer, had to import 98
percent of its oil. India, the worlds second-most populous country,
imports 65 percent of its oil. China, which is now the number-two
oil consumer, had to import 44 percent of its oil.
Realizing their dependency and the potential of a coming supply
crunch, nations, especially China and the EU, have already begun
scrambling to secure fuel sources.
Following Chinese President Hu Jintaos trip to Venezuela this
past September, Venezuelan President Hugo Chavez expressed
his countrys "extreme interest in becoming a safe supplier of oil
and oil derivatives to the People's Republic of China" (bbc,
September 16). This has worried some observers in the U.S.,
since Venezuela is a major supplier of oil to America.
Chinese oil companies have also been on the prowl, looking for
acquisitions. Following the Chinese National Offshore Oil
Companys (cnooc) failed takeover bid for U.S. rival Unocal, cnooc
purchased Canadian company Petro Kazakhstan. Sinopec,
another Chinese oil company, also made recent large-scale
investments in the Canadian Oil Sands. PetroChina too just signed
a deal with Canadas Enbridge to construct a $2.5 billion pipeline
that would deliver Canadian oil to China via a port in British Columbia.
The EU is also starting to take steps to mitigate any oil supply
shocks and maintain a secure supply of oil. Recently, Germany
and Russia announced plans for a $5 billion pipeline to deliver gas
rom Russia to Germany. Frances oil giant Total recently
announced that it had purchased a major investment in Canadas
oil sands.
According to the chief European economist at Deutsche Bank in
London, Oil is by far the biggest threat to the world economy, and
it is felt most by the weakest link, the European Union (New York
Times, April 8).
Perhaps this threat to the European Union is what spurred the
agenda for the recent meeting of the EUs Oil Supply Group, which
has begun to discuss the coordination of measures to reduce
demand in the event of an even graver supply crisis. These
measures range from car-free Sundays and speed restrictions on
motorways, to airport closures (European Information Service,
September 24).
World oil supplies are tight and there have been no major
discoveries of late. As the developing world industrializes, its vast
populations will continue to drive up the demand for oil.
The United States, the European Union, Japan and China are
getting set to engage in an increasingly intense competition over
oil supplies. This puts the countries with oil to spare at a massive
advantage. We are already witnessing how Iran is taking advantage
of the situation; Russia is positioning itself to do the same. You
can be sure oil will play a decisive role in determining the outcome
of an emerging new global geopolitical order. Watch for it.
-Copyright © 2005 Philadelphia Church of God.
Visit their website- " http://www.TheTrumpet.com "
http://www.thetrumpet.com/index.php?page=article&id=1755
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