314 comments on Peak Oil and the Financial Markets: A Forecast for 2008--July 31 Update
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I am sure there would be international repercussions. London with all of its financial industry would be especially hard hit.
There is a lot more that could be written about the subject. I want to think through the ramifications carefully before making any firm projections.
Excellent article. Thanks for sharing your insight. I have a related question that hopefully someone in the oil drilling industry can answer. I saw a recent article in which the EIA stated that even if offshore drilling was allowed, there would be no production from those areas until 2017. That seems like an extremely long time frame. Does it really take that long?
I regularly participate in bloggers calls with the American Petroleum Institute, and this has been discussed. I think the problems is that there are a lot of delays built into the system. As I understand it, the company first bids on the new property. It then has to try to explore the new property, to see if there is any oil. This takes several years--lining up people and equipment, and if things look promising, drilling one or more test wells. Drilling rigs are in very short supply, and there can be very long (1 year +) waits for these. Permits of various types are required and this adds to the process.
If it looks like there is oil and or gas there, someone has to design a plan for extracting this resource. Once the plan is drawn up, the equipment must be obtained, and workers must be located. If oil is in a challenging area, there may need to be new specialized equipment designed and specially built for the purpose. If an oil platform is required, this may need to be built.
Pipeline for transporting the oil and associated gas will typically be needed. If the well is 200 miles out in the ocean, typically both oil and gas pipelines will be needed to extend to the new location. There may be a need to extend land pipelines as well, to connect with the new pipelines into the ocean.
If we were dealing with a standardized process with off the shelf products and without government permits required, the process would take a lot less time.
The length of time I remember hearing is seven to ten years, but I expect that ten is probably pretty typical.