Oil prices hit high but report warns of supply crunch

A report from the non-governmental organisation Global Witness – famous for its exposé of so-called "blood diamonds" – pointed to an impending supply shock that could be so severe that many of the world's poor countries would simply be shut off from the world of energy by sky-high prices.

Two years in the preparation, Global Witness's report, Heads in the Sand, accused governments of ignoring the fact that the world could soon start to run short of oil. This would lead to huge consequences in terms of price shocks and much higher levels of violence around the world than last year's food riots.

"There is a train crash about to happen from an energy point of view. But politicians everywhere seem to have entirely missed the scale of the problem," said the report's author, Simon Taylor.

"We are all addicted to oil but if you look at the mathematics of the problem, they simply don't add up in terms of future supply and demand."

Chinese Company Is Near First Deal to Buy Stake in Oil Drilling Leases in Gulf of Mexico

HOUSTON — Trying to acquire a foothold in the American oil patch, a Chinese company is closing in on a deal to buy stakes in a few drilling leases in the Gulf of Mexico from a Norwegian company, an executive close to the talks said.

The prospective purchase would not do much to quench China’s huge and growing thirst for energy, which makes it the second-leading consumer of oil after the United States. But such an oil acquisition would be symbolically important as the first by China in the United States, coming four years after the Chinese company’s $18.5 billion bid for the American oil company Unocal collapsed under pressure from Congress.

The Non-Tragedy of the Commons

The 2009 Nobel Prize for economics is a useful reminder of how easy it is for scientists to go wrong, especially when their mistake jibes with popular beliefs or political agendas.

Elinor Ostrom of Indiana University shared the prize for her research into the management of “commons,” which has been a buzzword among ecologists since Garrett Hardin’s 1968 article Science, “The Tragedy of the Commons.” His fable about a common pasture that is ruined by overgrazing became one of the most-quoted articles ever published by that journal, and it served as a fundamental rationale for the expansion of national and international regulation of the environment. His fable was a useful illustration of a genuine public-policy problem — how do you manage a resource that doesn’t belong to anyone? — but there were a couple of big problems with the essay and its application.

Russia 2010 oil output to fall - Bernstein analysts

London (Reuters) - Russian oil output will stagnate in 2010 and begin to decline as mature fields lose production capacity and only one new project comes on line, oil analysts at Bernstein Research said on Wednesday.

Russia, now the world's largest oil producer, pumped 10.01 million barrels per day last month, up 0.4 percent from the 9.97 million bpd produced in August, both record highs, Russian Energy Ministry data released last week showed.

But Bernstein analysts said Russian production, which recovered in 2009 after dropping for the first time in a decade in 2008, was merely experiencing a temporary spike following the launches of eight new fields this year.

Senior oil analyst Clint Oswald at Bernstein Research wrote that 0.6 percent year on year growth in the year to the end of September, in a year when eight projects added 640,000 bpd of new production, "does not sound like a great achievement or the start of an up trend.,"