If you’re going to read just one thing this week, forget the intramural MUD histrionics and read Ambrose Evans-Pritchard’s takedown of OPEC’s World Oil Outlook, 

…a remarkable document, the apologia of a pre-modern vested interest that refuses to see the writing on the wall.

The underlying message is that the COP21 deal is of no relevance to the oil industry. Pledges by world leaders to drastically alter the trajectory of greenhouse gas emissions before 2040 – let alone to reach total “decarbonisation” by 2070 – are simply ignored.

Global demand for crude oil will rise by 18m barrels a day (b/d) to 110m by 2040. The cartel has shaved its long-term forecast slightly by 1m b/d, but this is in part due to weaker economic growth.

One is tempted to compare this myopia to the reflexive certainties of the 16th Century papacy, even as Erasmus published in Praise of Folly, and Luther nailed his 95 Theses to the door of Wittenberg’s Castle Church.

Is OPEC the hard-nosed realist here, setting out sober forecasts based on sensible expectations? Or is the OPEC mindset catatonically blind to tectonic shifts in technology and society about to render its product obsolete?

I don’t know, but I don’t think Evans-Pritchard’s take can be dismissed out of hand.

OPEC says battery costs may fall by 30-50pc over the next quarter century but doubts that this will be enough to make much difference, due to “consumer resistance”.

This is a brave call given that Apple and Google have thrown their vast resources into the race for plug-in vehicles, and Tesla’s Model 3s will be on the market by 2017 for around $35,000.

Ford has just announced that it will invest $4.5bn in electric and hybrid cars, with 13 models for sale by 2020. Volkswagen is to unveil its “completely new concept car” next month, promising a new era of “affordable long-distance electromobility.”

The OPEC report is equally dismissive of Toyota’s decision to bet its future on hydrogen fuel cars, starting with the Mirai as a loss-leader. One should have thought that a decision by the world’s biggest car company to end all production of petrol and diesel cars by 2050 might be a wake-up call.

Goldman Sachs expects ‘grid-connected vehicles’ to capture 22pc of the global market within a decade, with sales of 25m a year, and by then – it says – the auto giants will think twice before investing any more money in the internal combustion engine. Once critical mass is reached, it is not hard to imagine a wholesale shift to electrification in the 2030s.

These are the strategic debates Venezuelans should be having but can’t have, because the acute instability of our politics makes discussion of anything more than two weeks in the future seem esoteric.

It’s unfortunate. We might be done with the future, but the future is not done with us.

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  1. It is pointless to argue that batteries will have “consumer resistance” or that hydrogen cars will not be successful so soon, etc. The important thing for us to see is that a trend, most probably irreversible, has been set, pointing to the progressive replacement of fossil fuels by cleaner, alternative sources. When considering that the Orinoco heavy oil are has resources for the next 300 years we cannot escape the thought that a portion: 20%, 40%, 80% of these resources could be left behind as stranded assets. And the Orinoco area is our best card for the future!
    Within our small petroleum community this is a topic that is being discussed actively but nobody seems to be listening. It’s good that CC brings it forward.

  2. Hear, hear! Or as some say: “here, here!”

    I wish we could have a couple of Venezuelans politicians discussing that on TV next to a couple of these charts…for 30 minutes in a row! OMG, that sounds so surreal! I can only imagine them repeating during 30 minutes “hay que sembrar el petróleo, diversificar, diversificar”

    In Norway they were having discussions on this well before the past Oil Boom, they were discussing it at every level, in the national government but also at public servant meetings in rural communities!

    Imagine Calabozo politicians discussing with the community how they are going to finance pensions
    and investment in agriculture in 2050 if the energy sector keeps developing as it is going.

  3. In today’s world, when discussing future technologies, predictions of more than five years into the future are nearly as worthless as Maduro’s promises. Modern computing and electronics companies simply do not make plans for more than five years. The technologies and markets are simply changing too fast. In contrast, the energy and transport sectors have changed much more slowly… until now. The introduction of new tech-savvy competitors into the automobile market with electric cars and the resulting research into better batteries is a game changer. I suspect (though, I wouldn’t bet the farm on it) that much of the petroleum powered transport will be eliminated within ten years. However, petroleum will always have a market, if for nothing other than feed-stock for the chemical and plastics industry.

    The oil business is not going away, but it is going to have to learn how to be a normal industry in which they are not the only game in town.

    • Yet in technology there are leaps that are well anticipated even though it is unclear which company will profit from it.

      Arpanet was the predecessor of today’s Internet. It was developed by the Department of Defense to insure survivability of the defense system in case one become disabled probably due to a nuclear attack. This system was put in place in the late 70s. During the 80s Universities were the main users of this internet. The best you could get for the common man was Compuserve. Then in 91 Mosaic, the web browser broke out from Urbana with Mr Andreessen, then Netscape, Yahoo, etc. The point is interconnected computers were feasible and highly priced at least 15 years before the .com boom of the 90.

      The next example is ubiquitous computers. Here it was apple and the cellphone that brought that to pass. As a concept it was discussed in the 80s but it was Apple with the Newton and Palm that trailblazed the commercial success of today’s Smartphones.

      So electric cars are also in this trajectory. I don’t questions it ultimate success but when will it happen and who will profit.

      In many ways, technology is like a pinata. If you are not there in the squabble you certainly will get nothing, but there is no guarantees for good attempts, just ask Palm, DEC, Sun….

    • As I said earlier, electric cars will come to pass but we are missing three huge technologies that will accelerate its adoption and success:

      -The driverless car, think Google’s car.
      -The sharing economy, think Uber.
      -Crowd sourcing for efficient traffic routing. Thinks Waze or Google Traffic.

      Simple people like me would love to read CC on our way to work while comfortably sitting in A robotic car. But once I get to the office why pay for an auto that will be parked ALL DAY? Instead my driverless car can now go down the street and pick up its next fare thanks to a Uber like model. I would not own the car. Instead through my phone I would program my ride.

      As this grows the efficiencies of the economy of scale become very clear. I don’t need to own a car, I just pay for the exact consumption I need. Now the central dispatcher can run big predictive algorithms and efficiently use our roads by directing traffic accordingly and economically incentivizing people to stagger their commute. You want to drive at peak time? Pay peak price, otherwise, get a discount according to the demands on the system.

      What is really great about this impending revolution is that things will qualitatively improve in the transportation front and our urban landscape.

  4. There’s other topic related to climate change nobody is talking about: how will climate change affect Venezuela: 70% of our electricity comes from hydropower; a large part of our population lives in climate sensitive areas; our water resources are being neglected; the damage done to our agricultural sector will take many years to repair.

    We will not only be poor as hell, but we will also be unprepared the next time climate change comes knocking our door…

  5. That thought is a wonderful thought to end the year on. Really and truly.

    The representations of this regime at the Paris conference (as reported in the bolivarian press) defied description. They were the confused and pretentious ramblings of a source that had never been challenged by debate and never had experienced the modern world: like the Saudis touting their advances in gender equality or something like that.

    • I was just doing the rounds on Venezuelanalysis, Noticias 24 and Aporrea. Those were where i picked up the info. So I don’t have the full transcript, although if I can remember the overstuffed and ridiculous title of the regime’s climate change jefa I will pass it along to Google.

  6. Kepler jumped ahead of me , Dr Coronel as always is the man to hear ……….as giving the most sound judgement on any oil issues ……I am wary of predictions because the variables are too many , but the trend is there , oil consumption should go down as technology makes other sources competitive, lowers the demand for energy in general and governments slowly move to cut oil consumption in line with their fear of climate change . But there is a lot money invested in the use of oil and until the economics make it a money loser there will remain a not insubstantial demand for oil . That doesnt mean that prices will regularly rise to boom levels as in the past , it might happen but again the odds are that it wont , the winds have changed and now the tailwinds of the past are becoming the headwinds of the future.

    My own suspicion , that we have to look at what happened to coal , oil will survive , perhaps for many years but the likelihood of returning boom prices as in the past is probably low and making money from oil will require a very expert and intelligent handling , then again I dont believe that anyone can absolutely predict these things…….., time will tell.!!

  7. It will take a great cultural change for many in Venezuela to understand that oil is most probably on the downward slope. Long ago I grew tired of trying to explain to my wife’s family and friends that energy (all forms of energy) is expensive and it is a crime to waste it. When I closed windows so that we weren’t air conditioning the great outdoors, or even turned off lights in rooms that people had left I got treated like that crazy uncle that it is best just to ignore. It just got to the point that it seemed like I was just hitting my head against the wall trying to explain……now that we are in Canada and my wife sees what the electricity, heating and other energy costs really are she understands that you cannot waste it.

  8. Perhaps “the last oil boom” has passed with regards to price but there will be additional sources of oil to compete with Opec such as shale oil and gas in Argentina, China and other areas and the conversion to natural gas as a power source to generate the electricity required to charge those cars. Electric power will not be the only challenge to the one trick ponies like Saudi and Venezuela.

  9. So, the consensus is in… no oil booms any time in the foreseeable future. Furthermore, Venezuela’s oil infrastructure is very degraded and will require very large injections of capital just to maintain current production, at a time when current oil prices can hardly justify such an investment.

    Conclusion: Venezuela is going to have to earn its living in the world some other way. The “rentista” mindset has got to change. Venezuela is going to have make money the old fashioned way; working for it.

    The good news is that Venezuela does have a lot of other things going for it:

    — Venezuela has an agricultural sector that can and has to be reinvigorated. This is a good idea, on many levels, one of which is to create jobs outside of the major cities, which are over-populated and strained in their infrastructure.

    – There is an heavy industrial base that can be re-started. This will need investment, but it will produce more jobs than the oil sector.

    — Venezuela has a young population that is tech-savvy and capable of mass exploitation of internet commerce. With very low real wages and living costs for some time to come, Venezuelan entrepreneurs should be able to compete very effectively in world markets. Actually, this is already happening.

    — Venezuela always had a solid market for their telenovelas and other media products. We need to make Venezuela the Hollywood of Latin America.

    — Tourism, of course… Venezuela has a lot of natural beauty and attractions. This sector is the easiest and least costly jump start.

    I am sure that just about anyone could add more items to the list. Of course, all of these require fixing the economic distortions and disincentives that have destroyed the private sector over the last 15 years. My point is that most other countries in the world survive quite nicely without oil rents. So can Venezuela. The first thing we need to do is to acknowledge the easy money of the past is never coming back.

    • While oil wont provide the kind of revenues that it has in past boom years its still the best game in town , to be sure it will have to be run with much better proficciency and professionalism and this wont allow for the pols to squeese what it produces to support a parasitic corrupt clientelar wasteful Venezuela.

      Other areas of potential economic growth have to be expanded but from looking at the existing human and physical infrastructure they will just tag along and supplement rather than replace the revenues of the oil industry , there is a lot of competition out there , people who are better equipped to be highly productive for generations , to think of developing the kind of agriculture or Argentina they have in Brasil and Argentina or even in Colombia is something hard to imagine or convert into reality , it will take a lot of intelligent long term planning and effort and darn good luck.

      Lets face it except in isolated pockets there is no culture of concentrated hard work and ambitious entrepeneurship. It takes much more than the magic bullet of scholarly ‘education’ to provide the country with the kind of ‘how to’ practical expertise and organizational capacity for working together that is essential to achieve development .

      We should work hard at developing new areas of economic growth but not harbour too many illusions that this will be an easy task or even a done thing . Meantime lets use the cards we do have and that means a much better managed oil business (including the help of the best of international oil companies) even if its not going to be as luchrative as it has been in the past ……

      Our economy will not grow independently of oil unless we grow as a people and that usually a job for generations ….

      • Bill,

        “….there is no culture of concentrated hard work and ambitious entrepreneurship.”

        The next year, and those following, will have a profound affect upon the culture of Venezuela, just as the Great Depression had a profound affect on American culture. Hardship changes people. It forces them to grow up.

  10. Where is the electricity going to come from?

    Solar and Wind power are heavily subsidized, subject to when the sun shines and when the wind blows. They only produce at a small fraction of their installed capacity ( <<5%), likewise their cost per MW/hr is well above that of thermoelectric and nuclear generated electricity.

    Coal gas and nuclear are still the least expensive options to generate electricity.

    So you can generate the power in your car or as inferred above, from power plants that generate electricity. But you still need to generate and transmit the power, and you still need fuel to generate the electricity. What is going to happen when you increase the demand for electricity, lets say ~20%, because now everyone is driving electrical cars, where is the electricity going to come from?

    Worldwide, 80% of generated electricity comes from fossil fuels. Is there a less expensive alternative, besides nuclear? Are populations going to cede cropland for solar fields and windfarms?

    Thus the question- will this electrical vehicle revolution be driven by by economic forces, whereby consumers purchase a product that has minimum impact on their pocketbooks, or will their purchase be legislated?

    • John, I wouldn’t be too sure.
      Sources of Energy Production in Germany 2014:
      26,2% regenerative energies. (9,1% wind, hydro-electric 3,3%, photovoltaic 5,7%, biomass/household garbage 8%)
      17,8% hard coal
      25,4% brown coal -> our dirty secret: produces lots of CO2, but they are under heavy political fire.
      15,8% nuclear -> we are in a process to take all the 8 remaining reactors from the grid until 2022. It resulted a very expensive way of energy generation, especially as the question to store nuclear waste has never been really solved. Also the process to really shut down the reactors will take decades, even if they don’t produce any energy for the grid.
      We have a common grid in Western Europe. When we started to shut down reactors after Fukushima, experts warned that we will depend on nuclear energy imports from France. Now it turned out that we export energy to France and even more to the Netherlands, which crowds out relatively clean natural gas plants
      9,5% natural gas
      5,3% rest

      Newest predictions say that this year wind energy grew with 63% in 2015. And off-shore production hasn’t really been started yet.
      Of course the industry is subsidized, but every year less per generated kilowatt hour. The export market for expertise and installation of regenerative energy facilities show interesting growth rates. Now 137.000 jobs depend on regenerative energy, with stable growth rates of 10% each year. This are often high income jobs.

      Even if there won’t be a cheap electric car for the next 5 years, people tend to buy hybrid technology, which reduces gassoline consumption. In the cities there are every year more people with high income, who do not own a car. People tend to commute to work with their bikes. In my last 3 projects it was 40% of the team (including me). And I am talking about quite conservative companies from the insurance sector and industry.

      China won’t produce the growth rates for expensive german cars in the future. They are looking for new markets. Marketing boss from a big german car maker anounced in an email before christmas change in strategy: “Women are the new China”. Lets see how this works out 😉 . I think, they will invest seriously in electric cars quite soon.

      In some regions in the world like Atacama Desert, photo-voltaic today is the most cheap alternative of power generation.

      • Hi Lemmy,

        There is a big difference between installed capacity and usable capacity.

        Yes, Germany has a high installed regenerative capacity, however only a small fraction of this capacity can be relied upon during peak hours. For this reason coal fired units have to be relied upon and have additionally been installed to fill in the gaps to generate at night or on cloudy days, or when the wind isn’t blowing as backup capacity. Until some form of storage is developed which can hold this intermittently generated power to be used during large power draws, particularly during peak hours, regenerative capacity is unreliable.For this reason backup thermogenic capacity has been installed especially in places like Germany.

        So, 10-20 years down the road, everyone comes home from work and arrives home at 6:00 pm, then plugs in their cars just as the sun is going down, to re-charge their electric cars. The system will have to respond to this increased demand scenario.In Germany’s case, the electricity comes from backup coal-fired plants, because the installed wind systems can only generate at 3% of their installed capacity and the increased demand can only be met by coal fired plants which, in Germany’s case are the installed backup to accommodate peak hour demand ramp-up.

        In Northern Europe, there is a direct relationship between installed regenerative installed capacity and cost per MW/hr, the higher the installed capacity, the higher the cost per MW/hr.

        Back to the point of energy used by cars, if the source of this energy is shifted from gasoline and diesel to electricity, then a reliable source of this energy will have to be installed to meet this new demand. Because the regenerative electricity only generates at single digits of installed capacity and is intermittent then you see the problem, you would need thousands of Atacama deserts and would have to cover the country side with wind generators.

        The not yet discovered solution to this problem is to be able to store the electricity generated by wind and solar during the day or when the wind blows and be able to draw upon this later on when it is needed.

        The economic problem is simple: why would I want to spend 35-40 thousand dollars on a renewable car, when I could buy the same car for $20k and never make the $15-20k back in energy savings in the 5-10 years I own my car. Unless the incentive to do this is legislated in some form of tax. Such a tax would initially be met with enthusiasm by those of higher income brackets would be least affected, however, what about those in the lower income brackets who would have to pay a much higher percentage of their income in transportation costs—remember the Boston tea party?

        • Energy storage is a huge challenge and there have been opposition, for instance, against using water reservoirs and the like, but technology will keep improving. Also: cars will need to be more energy efficient
          (after the Volkswagen scam they will really have to be extra so). But it will happen. The will is there in Europe. China is investing a lot in renewable energies as well.
          It has the double incentive of adapting to Europe’s import requirements and trying to tackle the environmental mess it has produced at home.

          LemmyCaution mentions the better off using less cars in Germany and he is right but it is not only about them: the majority of the German population uses much more the public transportation system and the same is true for most of Western Europe.

          Tea party? The truth might be a little bit less romantic:


        • John,

          for a long time I was quite sceptical about this regenerative energy topic, but much less now.
          The 9,1% for 2014 wind energy is real production not capacity 46081/3 . There are technologies to storage the energy of windy days with water pump systems. There is a lot of investment into research of a huge variety of options.
          The new termoelectric coal plants are mere replacements for older dirtier plants. And even a huge percentage of those won’t pass approval processes. New projects for brown coal exploitation have been slashed this year, because there is no future demand.
          It is definetedly no hippy stuff. The prime minister of the land Baden Würtenberg, which is one of the two powerhouses of german industry, is from Green Party.
          Fraunhofer institute invests heavily into research to tap all sorts of regenerative resources even in other countries. German engineering really means business and export. And chinese too.
          There are failures like the plan to secure Europes energy demand by put lots of photovoltaic plants in the northern Sahara (Desert Tec), but there are simply too many proyects. Some are successes.

    • John Reistroffer
      Solar and Wind power are heavily subsidized, subject to when the sun shines and when the wind blows. They only produce at a small fraction of their installed capacity ( <<5%), likewise their cost per MW/hr is well above that of thermoelectric and nuclear generated electricity.

      I would agree with you regarding solar electric, but not about wind power- at least for Texas.That 5% figure for actual generation/ generation capacity may be the case in Germany, but it does not appear to be the case for wind power in Texas. You know, the state of big wind- out in the Plains, the wind goes on and on- and windbags.

      Texas Wind Generation Capacity by Year (MW): 12,355 MW in 2013
      Texas Wind Generation by Year (MWh): 35,874,000 in 2013

      Doing the math, we get 33% capacity utlization in 2013. Wind energy accounts for about 10 percent of electrical energy use in Texas. Check out the electricity prices in Texas: the 100% “green” prices are not that much higher.

      https://en.wikipedia.org/wiki/Wind_power_in_Texas 2013 wind generation and capacity figures



      • Hi Boludo Tejano,

        I have included a white paper report on Germany’s regenerative effort as well as a graph of cost per MW/hr vs installed capacity for regenerative power for northern Europe.

        The nut of the whitepaper is that solar and wind power is not a constant and reliable source of power. It is spikey on a daily basis and on a seasonal basis has it’s seasonal highs and lows. The result of the irregularity of this type of production is that a much greater capacity (3X-5X); many times the expected production, has to be installed to achieve a minimal production. The result is huge up-front capital and maintenance costs for huge installed capacity that only produces at a small fraction of this capacity. Meanwhile in Germany, coal is still the workhorse which is drawn upon during shortfalls of regenerative electrical production both on a daily and seasonal basis.


        The other graph shows increasing cost to the consumer with greater installed capacity in the case of northern Europe.


        I agree with your earlier comments on gas being a sort of “bridge fuel”.
        In the past gas was a waste product from produced oil and discoveries of free gas in oil exploration was considered a failure case.

        I can remember growing up in eastern Venezuela, the night sky was lighted up a brilliant orange as fields in the Anaco and greater Oficina field areas flared the produced gas.

        Now or intermittently and probably more into the future, gas is and will be a primary exploration target as oil prices once again begin to ramp up in the mid-to-longer term. Higher Oil prices will result Increasing gas production, making this a viable transportation as well as thermoelectric fuel.

        PDVSA in the early 1980’s had a fleet of vehicles converted to CNG, and facilies to charge their vehicles, especially in Eastern Venezuela, PLC, Anaco, and San Tome. Vehicles could both run on CNG or gasoline and the conversion from one to the other was simply a flip of the switch while driving. I could envision something like this to catch on initially on a large scale because of the versatility and option to choose the cheaper fuel at a given time.

        In the 1980’s. PDVSA also had an ingenious idea to switch diesel-electric capacity to gas generation by converting facilities over to gas. This was accompanied by an exploration effort in the northern Guarico Yucal-Placer area. I don’t think that this ever panned out, but the thinking at the time was very dynamic. I’m sure G. Coronel is probably familiar with effort, and very well may have had a hand in this.

        So as you mentioned, gas does have a big role to play in the intermediate future, particularly in the offshore shelf areas around the world, where it was at one time considered a failure case.

        Hook ‘Em Horns,

        John R.

    • John Reistroffer
      Solar and Wind power are heavily subsidized, subject to when the sun shines and when the wind blows. They only produce at a small fraction of their installed capacity ( <<5%), likewise their cost per MW/hr is well above that of thermoelectric and nuclear generated electricity.

      While I would agree with you about solar electric- concentrating a diffuse energy source is inherently a costly affair, I would not agree with you about wind energy. Wind energy is a more concentrated form of energy compared to solar radiation. But yes, the variability of these energy sources can be a problem.

      From the EIA, consider the following figures for electrical power generation in Texas for 2014, in Megawatt Hours:
      Total 437,629,668
      Wind 40,005,124
      Solar Thermal and Photovoltaic 282,531

      These figures would suggest that there is a definite cost difference between wind energy and solar electric power.

      If you look at the Wikipedia article on Wind Power in Texas, you find the following/

      Texas Wind Generation Capacity by Year (MW) 12,355
      Texas Wind Generation by Year (MWh) 35,874,000

      This translates into 33% utilization of capacity, which is rather different from 5%. For 2014, EIA has 40,005,124 MWh for Texas Wind. Its 2013 figure checks out Wikipedia’s number. This represented 9.1% of electricity consumption in Texas for 2014.

      Wind energy in Texas is actually fairly competitive with other energy sources. No links because too many links get put into the spam folder.

      Wind energy is more viable in the Great Plains area than in the eastern part of the US, where the wind doesn’t blow as much.

      Because of the variability of wind power, wind power will represent a supplementary addition to the electrical power grid. But the current record in Texas indicates that wind energy is not a boondoggle.


  11. And by the end of the article the author says this:

    “If they have any planning sense, they will manage the market to ensure crude prices of $70 to $80. They will eke out their revenues long enough to control spending and train their people for a post-petrol economy, rather than clinging to 20th Century illusions”

    “manage the market to ensure crude prices of $70 to $80”?

    It seems that not only OPEC is clinging to 20th Century illusions here. That ship has sailed my friend.

  12. When measuring the pollution producing properties of different fossil fuels , Coal is a much bigger polluter than oil , and oil much more polluting than natural gas. Bunching them together as if they are all equally polluting is irrational in terms of a long term economically practical strategy .

    Thus , if the cost of energy counts for something ( and it does for countries that are not super rich) then the strategy should be to minimize or sanitize the burning of coal , try and use less oil in transportation (which is where its use its more important) , and replace coal (and part of the oil ) with low polluting cheap natural gas , Meantime technology will in time (not with magical sudenness) substantially reduce the use of energy in industry and home and allow for tertiary ‘green’ sources of energy to become more economical and abundant.

  13. “Pledges by world leaders to drastically alter the trajectory of greenhouse gas emissions before 2040 – let alone to reach total “decarbonisation” by 2070 – are simply ignored.”

    As they should be. They are ritual incantations to justify lavish subsidies to politically connected “green” businesses, and massive transfers of wealth to Third World kleptocracies. (The figure I saw was $100B/year.)

    80% or so of petroleum goes for transportation, and there is no practical substitute for petroleum as transportation fuel. A handful of electric vehicles have been sold by dint of massive subsidies, mostly to guilt-tripping liberals.

    (A few years ago, Iowahawk attended a fancy Hollywood party.

    When we arrive at the top of the mountain we are greeted in the driveway by a winsome member of the Valet Girls, the troupe of hot fembot parking ninjas who are handling car management for the party. “First non-Prius of the night,” she says of Ruth’s Benz. Apparently the big new automotive trend in Hollywood is conspicuous non-consumption; I marvel at the irony of eco-hairshirt hybrid shitboxes being parked by supermodel servant girls.)

    As for “total decarbonization”… China has “promised” to start reducing its CO2 output in 2030. India is adding coal-fired power stations left and right. Meanwhile Europe is littered with dead wind-power generators, because when the subsidies expire, they would run at a loss.

    Fracking and other technologies have weakened OPEC at the supply end. The demand end isn’t changing much, and isn’t going to. The reduced cost of petroleum fuels encourages demand.

  14. Low prices will certainly be an inducement to increased oil demand, specially in OECD countries , the following is an extract from a IEA report :

    ” In contrast to non-OECD countries, oil consumption in OECD countries fell from 2006-2009 after prices rose, and declined significantly during the economic downturn. Due in part to their relatively slower economic growth and more mature transportation sectors, the impact of prices on OECD consumption has been more evident than for non-OECD countries”.

    Now we must look at how China starts to behave to reduce its oil and coal consumption ……their economic activity has declined and they have taken the pledge to reduce their CO emissions , lets hope they keep their word !!

    Fracking production will bounce back once lower supplies allow prices to rise ,but on returning on stream will keep prices from rising to high …..in the long run this favour a longer life for the use of oil resources in the world but at prices that will not overflow to boom levels .

    While fracking projects are plentiful they do have a limit in that they require abundant water resources to become viable and many of the potential fracking sites are located in places where water is short . ( e.g China)

  15. Ok people: I’e been pretty busy, but first of all “Happy New Year To Everubody!!!”… Having said that, I’ll give you 2 articles that will bring you the reality in oil markets, from the place where I live, Europe:

    1) Big Oil companies (BP, Exxon, etc) are today nothing more than empty shells. Please read this:


    2) Iran is the World’s Cheap Oil Producer: Iran (the good old friend of the deceased): Iran cost of oil production is at… Just US$ 1,00 (Exactly ONE dollar)… So, as far as the international sanctions are about to be released over Iran, maybe should be better to think about what the hell are Vzla going to do with the oil at the Orinoco Belt, for example. Here is the link:


    Again, Happy New Year


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