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An Endless Sea Of Energy
Be prepared for the next great transfer of wealth. Buy physical silver and storable food.
zerohedge.com / by Tyler Durden on 01/10/2015 15:30
Submitted by Erico Matias Tavares via Sinclair & Co.,
With crude oil prices in a strong corrective mode, energy depletion is understandably not on people’s minds these days. However, this is a scenario that many of us might have to deal with at some point in our lifetimes.
Yes, the world currently has more than abundant supplies of crude oil. US tight oil production has been rising exponentially, accounting for the biggest share of global growth since 2009. This is by any measure an amazing technological and logistical achievement. OPEC has simply been incapable to accommodate the resurgence of the US as a major producer; and falling prices may actually prompt some of its members to sustain outputs, otherwise lost revenues will be even larger.
We might be swimming in oil for now, but this should be no reason to become complacent.
As an example, an important fact that is often overlooked is that tight oil exploration is a different animal, and relatively recent in terms of its significance. Each tight oil well has very steep decline rates – in many cases 90% within 5 to 7 years, much steeper than conventional wells. This means that to sustain (let alone increase) production many new wells need to be drilled each year. And at US$5-10 million cost per well, this is not cheap either.
Here’s an interesting question: with all these massive production increases, when is crude oil production projected to peak in the US?
In its annual energy outlook reports, the US Energy Information Agency (“EIA”) puts out estimates of future crude oil production taking into account the most recent reserve and production figures. Here’s when they believe production will peak according to their reference (baseline) scenario: 2019.
This is depicted in the following graphs extracted from their latest report:
The post An Endless Sea Of Energy appeared first on Silver For The People.
Thanks to BrotherJohnF
Source: http://silveristhenew.com/2015/01/10/an-endless-sea-of-energy-2/
