[Texgreen] Has world oil production already peaked?

[Roger Baker]

[We should know for sure in six to ten months. It should be noted  
that current production is not rising in response to high prices of  
the last few years (according to the official numbers). Also the oil  
offered for sale to the open market will peak earlier than oil  
production per se as the newly cash-rich oil producers use more of it  
themselves. With supply stagnant, why has price declined recently?  
There are various short term speculative factors at work, but one  
important factor is that the poor of the world are being bid out of  
the market; kerosine cooking stoves across Africa are no doubt  
flickering out. -- Roger]



World oil production may have peaked-executive
Thu Oct 26, 2006 2:33pm ET147
By Scott Malone

http://today.reuters.com/news/articleinvesting.aspx?storyID=2006-10-26T1
83322Z_01_N26302200_RTRIDST_0_ENERGY-PEAKOIL.XML
( http://makeashorterlink.com/?H25812D0E )

BOSTON, Oct 26 (Reuters) - World production of crude oil may have
already peaked, setting the stage for declining output that could lag
demand, a top advocate of the "peak oil" theory said on Thursday.

Matthew Simmons, chairman of Simmons & Co. International, a Houston-
based investment banking firm specializing in the energy sector, said
U.S. government data showed that the world oil supply has declined
through the first half of this year.

Energy Information Administration data showed world supply of crude oil
has declined to 83.98 million barrels per day in the second quarter
after hitting 84.35 million bpd in the fourth quarter of 2005. Adblock

"If you basically have another six to ten months of that decline
lasting, then I think for certain we would look back and say, 'Guess
what? We actually reached a sustainable peak in crude oil production in
December 2005,'" Simmons said at a meeting of the United States of the
the Association for the Study of Peak Oil and Gas.

The peak oil theory has detractors, who note technology can help extend
the life of the world's oil reserves.

Simmons acknowledged his call may be premature, saying, "If that number
turns around, that will be wrong."

TEMPERED VIEW

Other speakers at the conference took a more tempered view of the
world's oil capacity, arguing that peak production is still a few years
out.

"Conventional oil production is going to increase by a few million
barrels a day between now and the period between 2010 and 2015," when it
may peak, said Mike Rodgers, a partner at PFC Energy, an energy industry
consulting company.

Advocates of the peak oil theory, however, said a decline in high oil
prices was likely to lead to less pressure for oil companies to invest
in production.

Rising demand for oil, stoked by the rapid economic development of China
and India, have helped to drive oil prices to record highs. U.S. oil
futures peaked above $78 in July, but have since eased to about $61 per
barrel.

"If the supply and demand are such that we see declining oil prices, and
given that the economy functioned pretty well through a period of high
oil prices, the question is -- are policymakers going to lose focus on
this problem?" Rodgers asked. "I would argue that they probably will."
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It's hard to determine just how much oil is left in the world, since
companies in different countries use varying standards to calculate
their oil reserves, speakers said.

Major oil companies haven't raised the specter of peak supply with their
shareholders.

One speaker said that could suggest their oil reserves are richer than
many executives disclose, as a result of strict U.S. regulations on how
public companies may estimate their reserves.

"We don't have data which allows us to study in detail the depletion of
oil fields," said Jeremy Gilbert, managing director of Barrelmore Ltd.
and a former top engineer at BP Plc. (BP.L: Quote, Profile, Research).
"The industry itself does know more about the way things are behaving,
wells are producing and it may be that if we had access to that data, we
might refine some of our estimates."

(c) Reuters 2006. All Rights Reserved.
-- 
Ross McKay, Toronto, NSW Australia
"If ye cannae see the bottom, dinnae complain if ye droon"
- The Wee Book of Calvin