The Oil Drum

Well here I am sat by the tele, waiting for the BBC show, If the Oil Runs Out, the facts upon which they base it being given here.

Pause while 3,550,000 barrels of oil are consumed, (the show mentions that) and what did I think?

Well I could begin by suggesting they had the wrong buttons on the drill bit, but that would be a bit facetious. In a very small nutshell, it tracks a family during the time that the first well is drilled in ANWR, (in 2016) at the same time that President Chavez in Venezuela pulls his country out of OPEC, and that Saudi and China get together to do a goods for oil swop. Oil prices rise and the consequences are transiently illustrated through the impact on the family (losing job, long gas lines, food prices up, aspirin (an oil product) out of stock, and the like). The well is being drilled in the purported last hope for oil. And it does not find the 250 m of oil that was anticipated. But seven months later they are through the crisis and into another world.

The stormy weather is coming early this year, and there has been very heavy damage across the MidWest from tornadoes that seem to have arrived a couple of months earlier than are normally expected.

With the high costs that arose last year from the impact of the hurricanes, and the other unseasonable weather impacts on the country, such as the current fires in Texas and Oklahoma brought about by the drought, the insurance industry has been starting to take a look at the levels of risk that it is now getting into.

Last year, based on info that came from the industry we posted about some of the problems that companies engaged in drilling in the GOMEX were starting to encounter in insuring their rigs. All of a sudden the condition of the rig and the level of storm that it could withstand was being considered against the likelihood of it encountering a storm of that or greater magnitude. The insurers were asking, at that time, for assurances that rigs could withstand the storms, in the form of models that would validate the design strengths that were being proposed.