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30 comments on Non-OPEC Oil Supply Gains

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rogerleejr on January 3, 2006 - 6:43am Permalink | Subthread | Comments top
Geopolitically, the European declines are astounding to see in print, even for those of us used to the fact that North Sea decline is in fact speeding up:

Norway              -8.3%
UK                  -11.8%

With Western Europe down 8.7%

This surely must change the geopolitical situation for Europe, and therefore, for the world.  At this pace, if we want to see how an advanced set of nation will try to cope with "peak oil" or depletion, we should be watching Europe.

How long will it be (especially given the Russian/Ukraine natural gas debacle in which Europe was the one to get smacked in the face), and given Europe's increasingly dire position on energy, before some Euro-lectuals start saying and writing that the U.S and the Russians are essentially trying to choke Europe out of existance?

Unless the growth in production is spectacular in other places in the world, it is hard to see how the North Sea decline does not have the effect of giving MASSIVE POWER to the OPEC nations, with the money that comes from it.

What are Europe's options?
>  First, the "dash for gas", meaning essentially a bit of foot kissing of the Russians and the Caspian Sea nations, and some fast building of pipelines and LNG terminals and ships...

>Second, a fantastic push into Africa, and signing long term contracts with the mentioned nations, Algeria in particular for the gas (this leaving us with Trinidad and Tobago as an even bigger lynchpin in our LNG plans, and running behind in the race to get long term LNG contracts unless we get in the fight soon (in 2003, it was said by Energy Secretary Spencer Abraham that the U.S. will face a shortfall of 25% by 2030, but that was using "old" depletion numbers.  Like Britain and Norway, our depletion seems to be speeding up rapidly, so the 25% could get here much earlier...remember, that even a 10% to 15% shortfall, which looks possible by the 2010 is a major emergency.  Weather will be everything in stretching this number out)
>Third, Fourth, and Fifth, NUCLEAR, NUCLEAR, NUCLEAR.  Europe may be the land of the militant "Greens" but even the Greens don't want to freeze to death or see Europe become a slave state to Russia/U.S.
Europe bears much study and watching (we may even may want to try to help them, if we are still able), the wolf is on the hunt there first.

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Roger on January 3, 2006 - 6:59am Permalink | Subthread | Parent | Comments top
You are quite right to watch Europe closely. Specialy UK, oil and gas is over the peak there right now.
But I think you forget the most important alternative; it wil be coal, coal and coal. It is what made Europe big and it will be used again.

We will see a whole new (new?) social lower class: coal mine workers, mark my words.

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TI on January 3, 2006 - 11:12am Permalink | Subthread | Parent | Comments top
What coal? Coal has totally depleted in France and Belgium, almost totally in the UK, production has peaked in every European country long ago - in the UK already 1913. A lot of remaining coal (in Germany and Greece, for instance) is really lignite. Donbass coal in Ukraine peaked in the '70s and the have to dig as deep as over 1000 meters, as in Germany. This is very expensive and makes the possible production increases very slow and costly.
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TI on January 3, 2006 - 11:21am Permalink | Subthread | Parent | Comments top
In fact, African gas production is not that high at the moment - only 145 Bcm in 2004 or considerably less than the EU domestic production. And part of it already heading to the US.

Ageria has been in decline from 1999. And there is also the domestic demand. If Africa wants to develop, it needs its own gas. Look at South America - they are building their regional pipeline system for their own use. This is where Bolivian gas is heading, for instance.

It is not only world natural gas production nearing to the peak, but also increasing domestic and regional use outside Europe end the US.  

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Glenn on January 3, 2006 - 11:24am Permalink | Subthread | Parent | Comments top
Isn't Nigeria just flaring gas right now. Can't someone tap into that?
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Khebab on January 3, 2006 - 11:32am Permalink | Subthread | Parent | Comments top
My understanding is that NG is mostly profitable when it can be delivered throught pipelines straight to the customer. However, There is almost no market for NG in Africa. The only option is to develop a costly Liquified NG infrastructure.
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TI on January 3, 2006 - 1:28pm Permalink | Subthread | Parent | Comments top
Nigeria is flaring over 40% of its gas production. But it is also planning to increase considerably its electric power capacity by using gas. LNG transports are expensive and a real alternative should be to build local pipelines and power grids for transimission of gas-powered electricity. It is presently rapidly increasing its LNG capacity, so flaring will be reduced.
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