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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (21388)	1/15/2005 11:20:57 AM
From: mishedlo	Respond to of 116555

A nice post by Advocatus on the FOOL on peak oil here goes: ========================================================= Here is a graph by Exxon showing the discoveries of oil in the past century. All revisions post-discovery such as "reserve growth" of already discovered fields are attributed to the initial finds. exxon.mobil.com This graph nicely shows the declining trend in oil discoveries since the sixties - and the enormous gap that has opened between consumption and new finds in 1980. The uptick in the discovery trend in 2000 btw is NOT the beginning of a new uptrend - in 2001-2004 discoveries have fallen to new lows. The uptick was the result of a historic artifact - the giant Kashagan offshore oil field. The Soviets had known for some time that something was there, but hadn't bothered to drill for it. In recent years, finds have been very, very, small. energybulletin.net The world's biggest oil companies are failing to get value for money when they explore for new reserves, according to research by Wood Mackenzie, the energy consultant. The report shows the commercial value of oil and gas discovered over the past three years by the 10 largest listed energy groups is running well below the amount they have spent on exploration. Now when you combine the Exxon discovery chart with the Exxon chart on depletion and increase in demand, I really don't see how we will NOT have a problem especially considering the huge lag times between starting out to discover new fields and actually producing them (think one decade). Oil fields that, in all likelihood, simply aren't there any more in needed quantity. www2.exxonmobil.com To meet projected demand in 2015, the industry will have to add about 100 million oil-equivalent barrels a day of new production. That's equal to about 80 percent of today's production level. In other words, by 2015, we will need to find, develop and produce a volume of new oil and gas that is equal to eight out of every 10 barrels being produced today. 60-70 million barrels of new oil capacity by 2015?