If the looming global oil crunch has been postponed for another decade or two as widely alleged, this is far from obvious in today’s commodity markets. Brent crude jumped to $115 a barrel last week. Petrol costs in Germany and across much of Europe are now at record levels in local currencies. Diesel is above the political pain threshold of $4 a gallon in the US, hence reports circulating last week that the International Energy Agency (IEA) is preparing to release strategic reserves.

Barclays Capital expects a “monster” effect this quarter as the crude market tightens by 2.4m barrels a day (bpd), with little extra supply in sight. Goldman Sachs said the industry is chronically incapable of meeting global needs. “It is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand,” said its oil guru David Greely. This is a remarkable state of affairs given the world economy is close to a double-dip slump right now, the latest relapse in our contained global depression.

James Staffprd from Oilprice.com were fortunate enough to have some time with Scotland’s First Minister Alex Salmond where they discussed a broad range of topics from Scotland’s ambitious renewable energy targets and North Sea oil & gas to Scottish independence and Donald Trump.

This interview is available in full from: Oilprice.com

At the ASPO meeting in Vienna I was elected anew to be president of ASPO for an additional two years. Now autumn’s agenda has begun to fill with conferences where I will represent ASPO and Uppsala University. First there are four conferences in China in the middle of September of which ”The 2nd International Symposium of Unconventional Oil & Gas" is the most important.

Immediately afterwards at the end of September and beginning of October I will be in Abu Dhabi for ”The World Route Development Strategy Summit”. . The World Bank has invited me to participate and discuss the future of aviation at that industry’s largest conference.

The meeting following that is in October and is “the 127th Assembly of the Inter-Parliamentary Union (IPU)” . It will be held in Québec in Canada.

The 10th Annual ASPO International conference in Vienna was a great success. On the conference website you can read about the conference (ASPO 2012), you can look in detail at the program (program) and read the presentations of the speakers and download their presentations (speakers). All seminars were filmed, and now all the presentations are available on YouTube. The organizers, Michael Cerveny, George Günsberg and Rembrandt Koppelaar (organisation), have made a fantastic job to make the presentations from the conference to a historical document. Now there are 34 presentations on YouTube. We who participated in the conference can once again listen to the presentations that we like to hear, or to the ones that we missed because there were parallel sessions. All of you who were unable to come can now study the program and choose the presentations that you want to be on.

Presentation of the book Peeking at Peak Oil

ASPO was formed 10 years ago in 2002 during the world’s first Peak Oil conference in Uppsala. During the autumn of the year 2000 a number of people had encouraged Colin Campbell to take the initiative to form an organization that would study Peak Oil and inform the world that it faced a great challenge – within 10 years the world’s oil production would reach its maximum level. Together with Jean Leherrere, Colin had described this fact in an article in Scientific American in March 1998. This year’s conference was our tenth and, at the same time, a 10 year jubilee for ASPO. My opening presentation can be downloaded for viewing. You can look at it as I refer to it in the text below.

The International Monetary Fund (IMF) has released a working paper entitled "The Future of Oil: Geology versus Technology".

Abstract:
We discuss and reconcile two diametrically opposed views concerning the future of world oil production and prices. The geological view expects that physical constraints will dominate the future evolution of oil output and prices. It is supported by the fact that world oil production has plateaued since 2005 despite historically high prices, and that spare capacity has been near historic lows. The technological view of oil expects that higher oil prices must eventually have a decisive effect on oil output, by encouraging technological solutions. It is supported by the fact that high prices have, since 2003, led to upward revisions in production forecasts based on a purely geological view. We present a nonlinear econometric model of the world oil market that encompasses both views. The model performs far better than existing empirical models in forecasting oil prices and oil output out of sample. Its point forecast is for a near doubling of the real price of oil over the coming decade.

Rex Weyler, executive member of the Vancouver Peak Oil campaign group, has written a viewpoint on peak oil for Public Service Europe.

During the last century, society squandered 500 million years of captured sunlight on drag races, traffic jams, private jets and overheated office buildings - warns campaign group. Oil company cheerleaders proclaiming huge supplies of oil are dead wrong. Peak oil is as real as rain, and it is here now. Not 2050. Not 2020. Now. Oil production has been flat since 2005. This is not by choice. The producers cannot increase production because new fields cannot keep pace with declining production from old fields. The plateau is the top of the global depletion curve. Furthermore, this end of energy growth only accounts for volume. Energy quality and net-energy are falling like stones as environmental devastation increases. Every producing oil field on earth is in decline, unless it is brand new, and peak discoveries are well behind us. Meanwhile, the aggregate decline rate appears to be about 5 per cent per year.

Chen and Hsu have published a recent study about oil price volatility and its impact on global trade. A large annual panel data set covering 84 countries has been examined and the evidence shows that trade will be lower when oil prices fluctuate significantly. This supports the ideas presented earlier by Rubin in the book "Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization" that peak oil may in fact reverse globalization.

Abstract:
This paper examines whether higher oil price volatility causes a reversal in globalization. Using a large annual panel data set covering 84 countries all over the world from 1984 to 2008, we investigate the impacts of oil price fluctuations on international trade, namely exports and imports. We present strong and robust evidence that international trade flows will be lower when oil prices fluctuate significantly. We therefore conclude that oil price volatility hurts globalization.

Available from: ScienceDirect

A recent publication in Energy Economics by Douglas Reynolds and Jungho Baek has analyzed the use of Hotelling and Hubbert theories as determinants for oil price. Their conclusing is that scarcity rent has little importance, while the Hubbert curve is a major determinant for oil prices.

Abstract:
Much economic literature analyzes the Hotelling principal. Little economic literature analyzes the Hubbert curve although much controversy surrounds it. This difference in emphasis by economists needs to be reconsidered critically, and towards that end, we attempt to look at both concepts simultaneously. We test whether a simple Hubbert curve model is a significant determinant of world oil price changes and whether one of the main determinants of the Hotelling principle—the discount rate—also affects world oil prices. An autoregressive distributed lag (ARDL) bound testing approach is used to examine the effects of a Hubbert index variable and a Hotelling discount rate variable on the world wide price of oil.