It is very clear and unambiguous that the cost of exploiting ever more deeper, remote and challenging oil reserves will be significant in terms of technological endeavor and the amount of energy required to get the oil from the reservoir to the pump and therefore cost. There are additional upstream extracting investment requirements in terms of extracting equipment and downstream to the refining processes, not to mention some significant environmental hazards now coming into play. Costs in real terms, forget the dollar depreciating and all that banking trickery, in real terms the costs will inevitable start to escalate within a few short years.

It is true that the oil majors are only looking to state reserves for a short 4-6 year period, so any proven reserves on an oil majors books does not mean we are running out if oil. If you analyze where the oil reserves are coming from the on the books of the oil majors for the first time in history, the new reserves are not coming from new explored fields, but from acquisitions. This is significant.

We are also seeing the Saudis and other Middle East shit holes over stating their proven reserves by 40% and over with all their major fields well past their peak. It now appears that Venezuela has the largest proven reserves, more than our wahhabbi suicide bomb promoting f(r)iends.

As an example, the last mega-field to be developed, the infamous Kashagan fields in Kazakhstan. Unique technological challenges, man-made drilling islands in the middle of the Caspian sea exposed to icebergs and extreme rises in sea levels in summer and winter, oil at unbelievable pressure and filled to the brim with sulphur and other compounds that are difficult to remove and have significant environmental and health risks. First oil was originally targeted in 2004 and it is now 2011 and still no oil. Of course, many on the inside of this project say that first oil could have been achieved in 2007 had the Kazaks ensured that Shell remained as the operator and the delay is 100% the fault of the Italian operator who have ensured rampant corruption, middle-men fixer companies and literally hundreds and hundreds of millions of dollars have been siphoned off into various Italian business wings of the mafia and with a deliberate policy of delaying the project to ensure there is a constant business stream of invested cash to be exploited for the personal benefit of the Italian oil elite and that banana republic and mafia state that is Italy. Either way, there is a delay that is likely to be over ten years and is down to a mixture of unforeseen technological challenges and rampant corruption. These issues are likely to be encountered in the new frontiers of the Arctic.

Reaching peak oil does not mean that costs will immediately rise, but we ignore it our peril and to think that the current oil party is going to be around for our grandchildren to enjoy is a big and fatal mistake. Changes and challenges are on the way, and while there is confidence that we will rise to a technological answer, we need to address the issues and not ignore them on the mistaken belief that there are infinite cheap oil resources to support an ever increasing mass of humanity.

Last edited by formby (2011-09-01 11:48:12)

So, for our European members:  Is the Eurozone finished?

Last edited by 4F Hepcat (2011-09-02 08:20:43)