In March 2012, Citigroup which is the parent company of Citi Bank and Citi Futures, published a report titled "North America, the New Middle East?" What is suspenseful about this new research is that oil production in the North America has increased, and will continue to increase extensively in the coming decade.
North America as a whole could add over 11-million barrels per day of oil. Added to over 15-million barrels per day in 2010 - would total to almost 27-million barrels per day by 2020-22. The potential increase in supply challenges the notion of "peak oil", an idea that the world is running out of oil. So where is all this oil coming from?
Abiotic (or abiogenic) Oil: Within the Earth's mantle hydrocarbons such as elemental carbon, carbon dioxide, and carbonates exists. The abiotic design shows the full suite of hydrocarbons found in petroleum can be generated in the mantle by abiogenic processes, and these hydrocarbons can migrate out of the mantle into the crust until they escape to the surface or are trapped by impermeable strata, forming petroleum reservoirs.
In a recent issue from the journal 'Nature', astronomers show that an organic substance commonly found throughout the Universe contains a mixture of aromatic (ring-like) and aliphatic (chain-like) components. The compounds are so complex that their chemical structures resemble those of coal and petroleum.
Since coal and oil are remnants of ancient life, this type of organic matter was thought to arise only from living organisms. The team's discovery suggests that complex organic compounds can be synthesized in space even when no life forms are present.
Citigroups Analysis: The increase in liquid growth and the shale-oil revolution is challenging the concept of peak oil. The belief that global oil production has peaked, or is on the cusp of doing so, has underpinned much of crude oil's decade-long rally. The belief was bolstered by the repeated failure of supply to live up to the optimistic forecasts put forward by various governmental and international energy agencies.
The International Energy Agency (IEA), the industry benchmark, made a habit of putting forth forecasts for the coming year of big gains in non-OPEC supply, only to spend the next 18 months revising those forecasts lower. But that pattern looks set to change, mainly because of the new shale oil and gas plays in the US, but also because of deepwater in the Gulf of Mexico, and Canadian oil sands.
Production from these and the associated liquids from shale gas is rising so fast that total US oil production is surging, even as conventional oil production in Alaska and California is continuing its structural decline, and Gulf of Mexico production is now coming out of its post-Macondo (April 2010) drilling slump.
The pick-up in production growth in recent years and in the coming decade was driven by the fact that oil prices has been so high for so long, that led to increase of research and development effort being put in looking for new sources of supply. Obviously, it is being paid off:
It has been higher prices in the last decade that, like higher prices in the 1970s, are leading to resurgence in exploration and have unleashed three technological revolutions. US shale oil is one of them, but it has been preceded by the technological revolutions facilitating the tapping into vast hitherto non-commercial resources in deepwater and shale plays. Now the US is poised once again to become the largest liquid producer in the world and looks almost certain to overtake Russia and Saudi Arabia before the decade is over.
Global Oil Discoveries: Lately, we have yet another research, this time from Harvard Kenny School Belfer Center for Science and International Affairs. Their research is confirming Citi's assessment. The concept of "peak oil" is nowhere to be found.
Lead scientists Leonardo Maugeri reports that after adjusting for risk factors, the additional production that could come within the next 18 years is about 29 million barrels per day. Factoring in depletion rates of currently producing oil fields and their "reserve growth" - the net additional production capacity could be 17.6 million barrels per day - yielding a world oil production capacity of 110.6 million barrels per day by 2020.
Who knows, this may be a step towards the end of 'greed', however, at this moment it is more likely a far-fetched idea. But then, ancient text does tell us we are very close to a "time of ending and a time of beginning". How will the world adjust to discovery of "no such thing as peak oil"?
Earth Changes Media
Mitch Battros |
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