PEAK OIL - The New Y2K or The Beginning of the Real End? Message Board

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Gold/Mining/Energy : PEAK OIL - The New Y2K or The Beginning of the Real End?

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To: Triffin who wrote (109)	2/20/2005 9:05:49 PM
From: Raymond Duray	of 1183

Hi Triffin, Re: It would be of interest to determine .. current global production ( at the well head ) capacity current global tanker ( dirty ) capacity ie crude current global pipeline capacity current global refining capacity current global tanker ( clean ) capacity ie products I would assume that each segment above has a current capacity in excess of current demand of 80 mbpd .. Yes, of course you are asking the right questions here. But what I have read leads me to a completely different set of facts. I do not assume that current capacity is in excess of the 83 mbpd that will be consumed in 2005 (barring world recession). Most of the ASPO related observers seem to see that supply/demand of crude oil is essentially at parity. I.e. there is no spare capacity in production (where new production is just barely matching depletion of older assets), tankers, pipelines or refining. In the U.S. pipeline infrastructure is way behind schedule in terms of safe maintenance scheduling. Billions will need to be invested here. The U.S. no longer has adequate refinery capacity to match demand, and currently imports finished products such as gasoline and jet fuel. The U.S. no longer has a surplus of natural gas production and development of LNG facilities cannot possibly make up the shortfall. One severe winter and pipeline pressure could very likely collapse to the level where some northern tier customers could freeze in their own homes. Incipient signs of this have already been observed. New pipelines for Caspian oil are being planned and developed, but existing pipelines in areas such as the North Sea and Alaska will become increasing underutilized. * Re: Recent legislation has mandated that the world's tanker fleet upgrade to double hulled tonnage and I assume that this process has in part fueled the recent run-up in rates that tanker owners have been enjoying Hmmm, I haven't seen anyone else make such an elaborate and round-about claim. Most observers simply note that the demand for tankers exceeds supply, and that it is now a seller's market for tanker rentals. * Re: I also keep hearing that we need to construct new refining capacity and the current infrastructure buildout for LNG terminaling facilities .. Yes, I would agree. U.S. refinery development stopped in the 1970s, essentially. The oil industry has gone global. And with good reason. While the U.S. consumes 25% of the world's crude oil and refined products, it produces only about 9% of the world's crude oil, and has reserves of about 3% of the world's total. The writing is on the wall for the further decline of the U.S. supply chain.

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