"It took us 125 years to use the first trillion barrels of oil. We ll use the next trillion in 30."

"One thing is clear: the era of easy oil is over."

* New statements from Don Coxe says Saudi & Mexican fields peaked
* Petro Caribe comes into force - details
* Russia moves to limit investment
* BP report 2Q 05 non-Russian production flat
* Prices await inventory draw or build
* Cindy outs major offshore terminal

The caller was smart enough to know something changed and he was right. In the early 90's the government realized it had a problem with rising entitlement costs for Social Security, Medicare, and government pensions. These entitlement payments were indexed by the inflation rate each year. With inflation on the rise it meant these costs were rising faster, thus making government deficits much worse. In order to bring the government deficits under control, it would be necessary to bring rising entitlement costs down. One way to lower entitlements would be to bring the inflation rates down, which would translate into lower Cost of Living Adjustments (COLA).

RBS said, however: "Continued high oil prices and the success of the most recent offshore licensing round continue to point towards a positive outlook for the North Sea."

Tony Wood, senior economist with Royal Bank of Scotland, said: "The ongoing rate of decline of UK oil and gas production continues to be of concern.

"However, high oil prices combined with the success of the recent Seaward Licensing Round point to a much more positive operating environment in the UK for at least the next two years."

"Jackson and Esser argue that "unconventional" oil will play a much larger role in the growth of supply than is currently recognized. These unconventional oils include condensates, natural gas liquids (NGLs), extra heavy oils (such as Canadian oil sands), and the ultra-deepwater (greater than 2,500 feet deep). By 2020, they could be almost 35 percent of supply."

"Total OPEC liquids capacity will expand significantly to 45.6 mbd in 2010 from 36.8 in 2004, with the proportion of condensates and NGLs rising to almost 18% of total capacity. Post-2010, OPEC has the hydrocarbon resources to continue expanding capacity at a slightly lower rate than the current decade's 10.9 mbd growth. CERA believes OPEC will accelerate key projects in anticipation of a non-OPEC slowdown in capacity growth."

The latest idea is called MEOR, for microbial enhanced oil recovery. Various labs around the world are engineering special bugs that generate CO2 biologically, along with detergent-like chemicals that help flush oil out of rocks. The microbes can be cultivated underground or in well-side vats. Because they grow explosively, the Energy Dept., which is funding several research projects, says MEOR technology may be the most cost-effective of all tertiary processes.

MEOR is already used in Venezuela, China, Indonesia, and the U.S. to treat deposits of heavy oil -- a molasses-thick form of oil. Researchers at Oak Ridge National Laboratory hope to develop new armies of bioengineered bugs that can infiltrate underground rocks and turn the gunky stuff into the sweet-flowing crude that erupts like the gushers in Hollywood movies.

As MEOR reduces or eliminates the need to use harsh chemicals during oil drilling, it is an environmentally compatible method of carrying out tertiary oil recovery. MEOR will become increasingly economically feasible as genetic engineering develops more effective microbial bacteria that may subsist on inexpensive and abundant nutrients.

A. Subsurface water

• 1. migration of organisms or metabolites into groundwater
  

B. Wastewater

• 1. spent fluids due to additional drilling
  
• 2. equipment washing
  
• 3. brinewater, media, chemicals for pH adjustment
  

C. Atmospheric Emissions (e.g. H2S)

D. Solid Wastes

• 1. bacteria in filter solids

In terms of peacefully integrating China into the world economy, this is to be welcomed, not feared. Chinese companies will make their mistakes, and they will need to learn fast. Another wave of hopefuls is already discernible. On June 28th, Thomson of France sold the final leg of its TV operations—not to China's TCL, its partner until now, but to an Indian rival.

Every individual in Britain could be issued with a "personal carbon allowance" - a form of energy rationing - within a decade, under proposals being considered seriously by the Government.

Ministers say that increasingly clear evidence that climate change is happening more quickly than expected has made it necessary to "think the unthinkable". ...

Under the scheme for "domestic tradeable quotas" (DTQs), or personal carbon allowances, presented to the Treasury this week, everyone - from the Queen to the poorest people living on state benefits - would have the same annual carbon allocation.

This would be contained electronically on a "ration card", which could be the proposed ID card or a "carbon card" based on supermarket loyalty cards.

It would have to be handed over every time a form of non-renewable energy was purchased - at the filling station, or when buying tickets for a flight - for points to be deducted.

High users of energy would have to purchase points from low users, or from a central "carbon bank", if they wanted to use more energy.