140 mya - 140 million years ago
Middle East and North Sea oil forms from the continuous rain of dead
bodies of tiny plant and animal plankton in the seas of this time.
90 mya - 90 million years ago North and Central American oil forms from
the continuous rain of dead bodies of tiny plant and animal plankton in
the seas of this time.
74 mya - 75 million years
ago - oils generated from the organic-rich marine carbonates deposited
in the Jurassic era thermally mature and are expelled from the
carbonate rock into anhydrite capped reservoirs deep within the ground.
These trapped oils form the worlds largest oilfield, the super-giant
Ghawar field of Arabia.
1848 - the first ever oil well is drilled in Baku, Georgia.
1850 - most homes in the west are lit by smoky, smelly, whale oil
lamps. The beginning of a turn to clean burning kerosine.
1858 - The first oil well drilled on the continent of North
American is drilled in Ontario, Canada.
1859 - first ever U.S. oil well
drilled in Pennsylvania by the
Pennsylvania Rock Oil Company at the site of seeping oil at Oil Creek,
Titusville. Oil is struck at 21 meters. Numerous refineries spring up
in the oil region. Gasoline is an unwanted by-product of kerosine
1870 - John D Rockerfeller founds the Standard Oil Company.
1878 - Standard Oil controls 90% of the refining capacity in USA.
Kerosine for lighting is a main product, as whale oil for lighting is
now increasingly expensive as whale catches have peaked, and are
now declining year on year.
1877 - Worlds first oil tanker (steam driven) plys the Caspian sea,
1878 - Invention of the lightbulb -death knell of the kerosine lamp.
1882 - Karl Benz, a German inventor, develops and builds the first
automobile. The vehicle uses 'benzine' distilled from coal. Later, Benz
switches to 'petroleum', refined from crude oil.
1892 - In a technological breakthrough, French car builder Peugeot
creates the first petrol-engined 4 wheel car that has rubber tyres.
1901 - Spindletop oilfield in Texas drills a well that gushes 100,000
barrels of oil a day.
1901 - William Knox D'Arcy, ultimate founder of British
Petroleum company, buys a 480,000 square mile concession from the Grand
Vizier in Teheran, Persia (Iran) to search for oil.
1901 - Englishman Wheatman Pearson buys oil concessions in Mexico.
1903 - Ford motor company incorporated.
1903 - the British Foreign
warns Russia and Germany that Britain would "regard the
establishment of a naval base or of a fortified port in the Persian
Gulf by any other power as a very grave menace to British interests,
and we should certainly resist it with all the means at our disposal."
The economic importance of the region to colonial corporate interest
was recognised as a prize worth fighting for.
1905 - William Knox D'Arcy, in a partnership with the Burmah Oil
company, finally strikes oil in his Persian concession. The partners
form the Anglo-Persian Oil Company, later to be renamed British
1906 - There are about 100,000 cars and trucks in USA.
1908 - First mass production of automobiles, with the introduction of
the model T ford.
1908 - Irans first oilfield, the Masjed
Soleiman field in southwestern Khuzestan Province, is discovered. It is
estimated to hold 6 billion barrels.
1908 - Shell oil buys oilfields in Egypt.
1910 - Shell oil buys the Ural-Caspian oilfields in Russia.
1910 - the British navy commences switching from coal powered ships to
oil powered ships.
1911 - In a world of relatively small companies, the oil companies are
already giants. Standard Oil and Royal Dutch Shell have oifields in
Indonesia, Russia, USA, Venuezuela and Mexico. These two giant
companies have pipelines, refineries, tankers, storage depots, and huge
shipping fleets operating worldwide.
1911 - Standard Oil found by US courts to be an "unreasonable" monopoly
as is broken up into 34 smaller companies.
1912 - Peugeot
create the first petrol engine with twin overhead cams and 4 valves per
1913 - world navies switch from burning coal (steam) to
increase the speed and range of warships.
1914 - The British Government takes a 51% holding in the Anglo-Persian
oil company just prior to world war 1, and changes the rules so that
only British citizens may be company directors. This company will
provide handsome profits to the British government treasury.
1914 - major
industrialised nations give up the gold standard whereby each currency
was fixed at a given amount of gold, and could be freely exchanged for
that physical gold equivalent. All balance of payment deficits between
one country and another were settled by transfer of gold, reducing the
currency available for circulation in the debtor nation and curbing
public spending in the debtor nation, thus driving down domestic prices
and making exports competitive once more.
By abandoning the gold standard, long term bonds could be raised to
1914 - 1918 - oil found to be of even greater militarily importance as
use of trucks and
tanks in battle commences. First oil supply shortage, but the Allied
army has a
much greater access to oil.
“the Allied cause
has floated to victory upon a wave of oil.”
-Lord Curzon, member of the British War Cabinet
1918 - The British,
aware Mosul and Bhagdad are rich prospects, seize
the oil region of Mosul, fighting on after the armistice in order to
seize it, and block French interests in the area. In the aftermath of
the collapse of the Ottoman empire, Britain draws up the boundaries of
the British-created state of Iraq, making sure it contained the most
oil-prospective sectors for its oil companies. The UK Secretary of
the War Cabinet, noted in cabinet letter that oil was a “first
class war aim.”Curzon lies about UK economic interests, saying,
“Oil had not the remotest connection with my attitude over Mosul..”
1919 - The USA
Government, concerned about domestic oil shortages, and
without overseas sources, demands that USA oil companies be included in
concessions in Iraq. A new consortium was created, including USA
companies, and named the 'Iraq Petroleum Company'. It consisted of of
BP, Exxon, Gulf, Texaco, Mobil, and a private entrepreneur.
1919 - Shell buy Wheatman Pearson's by now large Mexican oil
1919 - Exxon buys significant sized Texas oil company.
1920 - Exxon buys Russian oilfields.
1920's - 'roaring twenties'
- the British Empire is declining, British Imperial forces are
overextended across the globe. British armed forces occupy
Iraq and spend 10 years 'pacifying' Iraq with poison gas, troops,
incendiary munitions and armoured vehicles in order to protect their
oil company interests. Maintaining the Imperial reach is a huge
drain on government funds. As a result, Britain has a huge government
budget deficit, which it 'manages' by devaluing the pound and borrowing
heavily from overseas. It imports far more by value than it exports,
i.e. has a huge foreign trade deficit. By the late 1920's the western
world start to abandon 'holding' British pound debt and repatriate
their capital. The pound falls
heavily as a currency of value.
from 1921 to 1929, there is a huge expansion of easy credit.
Undercapitalized banks and loan agencies proliferate. Huge amounts - an
estimated $US28 billion - of money are created through easy loans.
Banks cut each others throats to match low interest rates and attract
borrowers. America promotes unsound loans of American dollars overseas
in order to stimulate overseas markets to buy US farm exports, thus
keeping unemployment in the USA low.
1920's - Competition
between oil companies is fierce, with much price
slashing and below-cost selling to gain market share. The two main oil
exporting countries are USA and Mexico. All oil prices are
'benchmarked' to the price of oil in the Gulf of Mexico plus
transportation costs from the Gulf of Mexico to the point of delivery,
regardless of where in the world the oil was actually produced or
actually delivered. All contracts are in USA dollars.
1920 - there are approximately 9 million cars in USA, consuming about 3
billion US gallons of petroleum a year. The US Geological Survey
expresses concern that at this rate of consumption, there may be only
enough oil for about the next 20 years.
1924 - North America is by far the world's largest oil producer,
pumping out 2.3 million barrels a day. Europe is a far distant second,
producing 179,000 barrels a day. The Far East produces 95,000 barrels
of crude a day, and the Middle East, only 83,000 barrels of oil a day.
1926 - Arabian tribal king, Ibn Saud, completes his conquest of the
Arabian Peninsular and names the country after his family - 'Saudi'
1927 - Gulf oil buy the oil concession of the Sheikdom of Kuwait.
1928 - (september) Major USA and
UK oil companies Exxon, Shell, and BP meet at Achnacarry
Castle in Scotland and agree not to compete
against each other in a global price-fixing collusion.
1928 - An agreement is signed
by USA and the UK giving the Iraq
oil-drilling rights in every part of the old Ottoman Empire, from
Turkey to the southern tip of Saudi Arabia. In the post-Ottoman
era boundaries were somewhat fluid, so a red line was drawn by USA and
UK on a map to show what areas where covered. This came to be known as
the 'red line agreement'. The line enclosed almost all likely oil
prospects, except for Kuwait and Persia (Iran).
The Iraqi British 'puppet' government 'settles' on a royalty of 4
gold shillings per ton. Oil companies make a profit of around two times the sum
they pay the Iraqi government.
1929 - The 'great depression'. USA credit bubble collapses as shonky US
banks fail in July 1929, paper companies on the US sharemarket fail and
the sharemarket bubble pops in october 1929.
1930 - by the early months of 1930 the USA economy more or less
collapses.There is 30% unemployment, house prices collapse, domestic
farming prices fall as spending power disappears. Small farmers in some
impoverished states with endemic erosion problems are badly hit, other
regions are much less badly affected. In the UK there is depression in
the north, but little effect in the south as new industries around
based on electricity and new technologies expand.
1930 - USA imposes the Smoot-Hawley tariffs to protect local industry.
The US protectionist anti-fair trade impulse first established by the
US Constitution is re-invigorated. World trading economies are chilled.
1932 - Iraq is
granted independence by Britain, the occupying power. But Britain
continues to rule by indirect proxy means and via stooges. It leaves a
large military force and a large military air base in the
country to ensure it's highly profitable oil interests are protected.
1933 may 29th - King Saud follows the advise of his English advisor
and sells a concession to Standard Oil of California to search for oil
Short of capital, Standard Oil of California (SOCAL) on-sells half its
Saudi Arabia to Texaco, via a joint venture called Aramco.
1934 - Gulf Oil and BP form a joint venture to develop prospects in
1938 - First Middle East oil well commences production at Dhuhran,
eastern Saudi Arabia.
1938 - Kuwaits giant Burgan
discovered by the Gulf Oil-BP joint venture.
1938 - Mexico nationalises all 17 foreign oil companies controlling
Mexico's oil resource, and established the state run Permex company.
Permex is forced to pay compensation for nationalised fields.
World War II - Britain attempts to persuade King Saud to transfer the
Texaco-Standard Oil concession to BP by advancing the King around 20
million dollars. The American companies lobby USA president Roosevelt,
and the USA government trumps the British offer. Britain and Russia
invade Iran to secure oil and supply routes after the 'shah' of Iran
harbours nazi operatives.
USA supplies allies with goods to
prosecute the war, including most of the oil. Payment in gold is
demanded. USA accumulates a large
portion of the worlds gold reserves.
1941 (July) - USA freezes all Japan's financial assets in USA.
assets were used by Japan to pay for oil imports - 80% of which come
from USA. Three days later Japan invades Indonesia to seize control of
the Royal Shell Petroleum oil fields in southern Indonesia.
1943 - Realising the huge strategic importance of oil to a modern
army, President Roosevelt declares the "the defense of Saudi
Arabia is vital to the defense of the United States."
Bretton Woods agreement leads to the gold standard being re-introduced,
but this time the US dollar is allowed to be exchanged for gold - i.e.
a gold/US dollar interchange standard, but only with foreign
governments, not citizens. IMF established, with USA having
veto rights on any major decisions made.
1945 - As oil is of clear
military strategic significance, US President
Roosevelt meets with King Abd al-Aziz Ibn Saud,
feudal monarch of the around 5 million people of the vast Arabian
desert and commandeer of vast Arabian oil reserves. Agreement is
reached to protect the founder of the Saud dynasty
from competitors and external forces in return for privileged access to
Saudi oil. Secret plans are made to destroy oil fields - even nuclear
bombs are considered - if the Russians gain influence or control of the
1945 - The USA government forms an agreement with Saud that Aramco
would pay it's USA taxes to Saud, not to the USA government. This
became known in USA government circles as 'the golden gimmick' that
kept Saudi Arabia happy while USA supported the return of some of the
'Israeli' arab diaspora into a specially contrived 'homeland' separated
from the other indigenous arab tribes of the Palestinian area.
early 40's - US oil
companies - State Oil and Texaco bring Exxon and Mobil into the
- US State department recognises that the Middle East oil reserves
are "a stupendous source of strategic power, and one of the greatest material prizes in
1940's and 1950's - Giant oil fields found in the Middle East,
including the world's largest oilfield (supposedly holding 115 billion
barrels of oil), the Ghawar field (discovered
in 1948, and first production in 1951). As
British colonialisation melts away, Middle East nations take back
control of their only significant resource, oil. Iran regains its own oil resources by
nationalising all oil production. Resentment of foreign control
of the impoversihed middle easts only worthwhile resource grows.
1945 - Oil from the Middle East
is so important in Europe that the oil price 'benchmark' is left at
Gulf of Mexico prices plus the actual cost of transport (i.e. not
the 'make believe' system of using the cost of transport as if from the
Gulf of Mexico for calculating the transport cost of Middle East oil to
- The Arabian American Oil Company (ARAMCO) is formed in 1947 with the
Saudi feudal king, finally achieving the USA's objective of elbowing
British and French oil interests out of the Arabian Peninsular.
1947 - (october)
- first oil producing well drilled 10 miles offshore from Louisiana, in
the Gulf of Mexico, USA
1949 - Qatar's Dukhan
onshore oil and gas field comes into production.
1950 - the Saudi King demands a higher price for the oil concessions
granted Aramco. In response, the USA State department allows Aramco to
deduct the money paid to Saud from their USA tax liability, making oil
companies one of the lowest taxed industries in USA.
1950 - world oil
consumption is about 10 million barrels a day.
1950 - China uses about
10,000 tons of oil a month, almost all from domestic production.
1951 - The two most common plastics derived from petroleum products
(polythene is best known) are invented.
1951 - Korean war causes a boom in market economies as supply contracts
for the war stimulate western industries.
1951 - Iran elects Dr. Mossadeq Prime Minister. He nationalises the BP
oilfields and creates the 'National Iranian Oil Company'. BP boycotts
Iranian oil. The British Government uses a fighter plane to highjack a
Panamanian oiltanker that had loaded at an Iranian oil terminal and
force it to the British colony of Aden.
1951 - oil prices briefly spike, and with them, inflation (to around 8%)
1952 - USA Senate Committee releases a report 'The International
Petroleum Cartel' accusing the seven largest oil companies (the 'seven
sisters') of colluding to 'fix' world prices and 'fix' global market
share between them. However, with the change in presidency, the focus
of concern became 'the communist threat', and concerns about cartels
1953 - USA's
CIA , with British help, backs a plot ('operation Ajax') against
the legal government of
installing their puppet, the son of the previous 'shah' of Iran,
complete with CIA trained secret police to murder and torture. The head
of the CIA at the
time, Allen Dulles, was previously a leading oil industry corporate
lawyer. American and British companies formed a consortium to buy and
develop Iranian oil resources. While nominally Iranian, the 'National
Iranian Oil Company' is placed under USA, British and French oil
company operational control.
1953 - USA Departments of State, Defense and Interior say USA oil
companies are instruments of US foreign policy.
- USA government directive to USA oil companies says it is "in the
security interests of the United States" for those USA companies to
help "provide to the friendly
government of Iran substantial revenues on terms
which will protect the interests of the Western World in the petroleum
resources of the Middle East." The USA is ordering USA oil companies to
join a consortium to exclusively exploit Irans oil resources, as
was done in Saudi Arabia.
1953 - USA president calls for the antitrust actions being taken
against the USA oil companies to be dropped.
1954 - USA uses about 3 million
barrels a day in motor vehicles, and about 2 million barrels of oil a
day in industry. Another 1.5 million barrels or so are used in various
other sectors, including shipping and heating.
1954 - there are 511,000 oil wells in the
USA, with an average production of 12.4 barrels of crude a day .
1955 - USA oil companies now control 40% of Iranian oil production.
1956 - Suez Crisis - Egypt seizes the
Suez canal from the foreign-owned 'Suez Company'. With the main route
to the Mediterranean blocked, oil shortages develop and fuel prices
1956 - USA
geophysicist M King Hubbert predicts in a paper
presented to a meeting of the American Petroleum Institute that oil
production in continental US would peak sometime between 1965 and 1970.
He predicts world production will peak around the turn of the millenium.
1956 - The
number of motor vehicles in the UK is now 6.3 million.
Late 50's - following the Suez
fuel crisis, Germany produces a range of 'bubble cars', tiny cheap low
fuel consumption cars made to transport two people without getting wet.
The most popular are the three wheeled BMW Isetta, the Messeerschmitt,
and the Heinkel Trojan. The UK produces a few three wheelers -
Scootacar, Bond, Peel - before the mini is introduced in 1959, when
their popularity then plummets.
1960 - world oil consumption
about 20 million barrels a day. A plant at Abqaiq is built to compress and liquify the
waste petroleum gas into 'liquefied petroleum gas' (LPG). The 'natural
gasoline' liquids in the gas were also captures. Previously the gas was
'flared off' at the wellhead as there was no market for it, piping it
onshore to remove it was hugely expensive, and it often contained elements corrosive to the oil pipelines.
1960 - ARAMCO finds a way to use the waste gas from oil fields. 1960, the company constructs
a plant in Abqaiq, Saudi Arabia, to compress and liquefy what are
called natural gas
liquids (NGL) - composed of propane, butane and natural gasoline.
1960 - Peak of discovery of Chinese
oil, with nearly three quarters of
discoveries being in parts of giant fields. The Daquing megafield is
brought into production in may of this year.
1960 - OPEC forms with
five members - Iran, Iraq, Kuwait, Saudi Arabia
mid 60's - historically, the peak of new oil discovery (in volume
terms), with an all-time annual record rate of 45 billion barrels of
oil discovered per year. The yearly consumption rate at this time was
about 15 billion barrels - far below the rate at which new discoveries
were adding to the global pool of oil reserves. Global oil reserves
continue to swell and build.
1961 - (april) E.F. Schumacher states in a report published by the UK
National Coal Board entitled 'Prospect for Coal'-
"The oil crisis will come, not when all the world's oil is
exhausted, but when world oil supplies cease to expand. If this point
is reached, as our exploratory calculation would suggest that it might,
in about twenty years' time , when industrialization will have
spread right across the globe and the underdeveloped countries have had
their appetite for a higher standard of living thoroughly whetted,
although still finding themselves in dire poverty, what else could be
the result but an intense struggle for oil supplies, even a violent
struggle, in which any country with large needs and negligible
indigenous supplies will find itself in a very weak position."
1961 - December - first shipments
of LPG leave Saudi Arabia. Capacity is about 4,000 barrels of liquid a
1958 to 1972 - price of oil slowly falls in real terms (inflation
adjusted), from $US3 (about $US15 when adjusted to 2005 dollars) in
1958, to $US3.75 in1972, i.e. about $US11
1952 to 1971 -
USA dollars pouring postwar reconstruction into Europe are not looked
on favorably, as the France, Germany and Switzerland regard the
printing of dollars as inflationary. Huge dollar printing to fund the
American war against Vietnam compounds the inflation. As a result,
European central banks convert the
greenback into its redeemable gold value from the USA central bank. The
20,000 tonness of USA Fort Knox gold
reserves falls to about 8,500
1965 - Russias giant
Samotlor field discovered. The Samotlor field has
reserves of about 57 million tons of high-viscosity oil
in Cenomanian deposits.
1967 - Iran - a
five-megawatt research nuclear reactor is given to Iran by the United
States under the Eisenhower 'Atoms for Peace Program'.
1967 - Arab oil embargo. Texas,
with unused production capacity, pumps furiously and floods world
markets with oil.
1967 - "In the absence
of the gold standard, there is no way to protect savings
from confiscation through inflation. There is no safe store of value.
If there were, the government would have to make its holding illegal,
as was done in the case of gold. If everyone decided, for example, to
convert all his bank deposits to silver or copper or any other good,
and thereafter declined to accept checks as payment for goods, bank
deposits would lose their purchasing power and government-created bank
credit would be worthless as a claim on goods." Alan Greenspan.
1967-1968 - Russias
giant Siberian fields developed.
1968 - the
giant Shaybah oilfield straddling the United Arab Emirate and Saudi
Arabian border is discovered. This field is one of the largest onshore
oilfields in the world.
1968 - USA one of North
Americas largest oil fields is found at Prudhoe
Bay in Alaska.
1969 - USA production of oil from
Prudhoe Bay starts.
1970 - major oil export
pipeline (the TAP line) taking oil from Saudi Arabia to the
Mediteranean is attacked in Syria. Oil has to be taken by tanker,
resulting in high tanker transport rates until the end of the year.
This is the first significant exposure of the vunerability of the west
to oil and gas pipeline attack as a means of political suasion.
1970 - (october) US (lower 48 states) oil peaks. US demand for petrol and
products continues to increase.
1970 - USA produces
10 million barrels of oil a day (peak production, pretty much as Hubbert predicted).
1970 - Oil is about $US16 a barrel adjusted to todays (2005) dollars.
1970 - The USA Department of Commerce estimates the net assets of the
petroleum industry in the Middle East alone at $US1.5 billion, with a
profit yeild of $US1.2 billion - a return on investment of an
1970 - (december) OPEC meeting sets a minimum tax rate of 55% on
foreign oil companies operating in OPEC countries.
1970 - UK
consumes 28 million tonnes of oil in road transport (private and
1970 - UK now consumes 1.2
million tonnes of oil per year in rail transport (passenger and
1971 - Qatar, Libya,
United Arab Emirates, Algeria, Nigeria and Indonesia have added to
OPEC's member nations.
1971 - (feb 14) Foreign oil companies operating in OPEC countries
accept a 55% tax rate, and further progressive increases. In return,
foreign oil companies are given freedom to extract as much oil as they
like for the next five years. However, only Saudi Arabia has
significant spare capacity.
1971 - (feb 24) Algeria nationalises just over 50% of French oil
company concessions in Algeria.
1971 - (april 2) Saudi Arabia, Iraq, Algeria and Libya negiotiate an
increase in the price per barrel of oil delivered to the Mediterranean
from US$2.55 to US$3.45. The price is also indexed to inflation.
1971 - (july 31) Venezuela introduces a law to transfer
all "unexploited concession areas" to government
ownership by 1974.
1971 - (august 15) America under
decouples the dollar from the gold
standard. The dollar can no longer be redeemed
gold. America now has
federal budget deficit of 23 billion dollars. European banks prudential practise
to redeem US dollars holdings from the USA gold backing is unilaterally
defaulted on. USA, with huge debts it has no intention of paying with
real money (gold) is technically bankrupt.
Now the US dollar is the only world reserve currency
at (USA) will. No longer is the dollar a benchmark currency
by gold, with other currencies pegged to it, with little need to adjust
relative values, little need for cross border currency flow for
financing, and thus no ability to speculate on currency movements.
US dollar is currently the sole currency of trade for oil, so the
dollar is, for now,
backed and inter-changed with 'black gold'.
No longer backed by gold, and with vast amounts of dubious 'promise to
pay paper treasury bonds on issue' the US dollar devalues immediately.
Nixon brings down a 90-day wage, price, and rent
freeze to try to control inflation.
1971 - In the
US, oil is placed on governmental price control.
1971 - (september
22) - OPEC commences negotiations with oil companies
to raise oil prices to retrieve the value lost by the sudden drop in
value of the US dollar.
1971 - (december) - Libya nationalises the BP oil concession.
1971 - Norway - oil production commences.
1971 - Russias giant
Samotlor oil field in western Siberia commences production, initially
producing over 100,000 barrels of oil a day.
1971 - The single largest
gas reservoir in the world is found off the shores of Qatar.
reserve estimates are put at around 380 trillion cubic feet.
1971 - Up until now, Texas oil producers had held the balance of
power, manipulating oil price by limiting production. USA energy
requirements meant Texan rate limiting had to be abandoned, and OPEC
gains strategic degrees of freedom to copy the USA and rate limit
1972 - With rate limiting gone, production in Texas increases, but only
by very little - Texas oilfields have peaked at about 3.5 million
barrels a day.
1972 - (january 20) - Agreement is reached with Western oil companies
that crude oil prices from the Middle East will increase by 8.49% to
offset the loss rising from the devalued US dollar.
1972 - oil
interests contribute an estimated $US2.7 million to Richard Nixon's
campaign for presidency.
1972 - Iraq nationalises
its oil. Exxon, BP, Shell and Chevron lose control of Iraq's oil.
1972 - Iraq's North Rumaylah field starts production, producing about
29 million barrels of crude.
1972 - Oil is just over $US2 a barrel in dollars of the day. Weak US
dollar means returns to exporters are lower than they seem.
1972 - large US oil companies maintain USA domestic reserves at low
levels, waiting to produce more when global prices rise again.
1972 - december 21 - OPEC (with the exception of Iraq)
signs an agreement with western oil companies providing for 25%
government ownership of all Western oil interests operating in
Saudi Arabia, Kuwait, Qatar, and Abu Dhabi.
The agreement is to begin on January 1st, 1973. Ownership is to
increase to 51% by January 1st, 1983.
- (september 11th) Chile - Democratically elected president Allende is
military general Augusto Pinochet and his army conspirators in an act
of criminal terrorism sponsored by the USA presidential offices 'secret
agent' branch, the ironically named 'Criminal Investigation Agency'.
Pinochet, his army, airforce and navy form an 'axis of evil', whose
'rogue state' commits horrific crimes against humanity including the
brutal murder of more than 3,000
innocent citizens and the torture of 27,000 more.
The USA, a very very weakly democratic
country, says voters in Chile are "irresponsible" to exercise their
democratic right to select the government of their choice in their own
country; and the USA government says
that "irresponsible" behaviour (i.e. democracy) needs to be "rectified"
(i.e. subjugate citizens under an unelected, totalitarian, criminal,
To rectify something is to make it 'right'.
Apparently murder and torture are 'right' in the view of the USA
government of the day. Therefore, the USA government view of democracy
at that time was
that democracy is
1972 into 1973 - economic boom times in Europe and USA creates an
accelerated demand for oil. Many OPEC producers are near the limits of
their pumping capacity - except for Saudi Arabia.
- (april) USA's Henry Kissinger, in a "Year of Europe" explicitly gives
voice to the USA administrations fear that Europe could become an
economic and political entity as strong as the U.S. and might develop
the same strong bilateral economic and political links with the Middle
East and North Africa America currently considers to be its 'right'. He
goes on to state that if that were ever allowed to happen, the U.S.
would no longer be the only pre-eminent world power. Clearly, the
doctrine of preventing economic rivals from having access to oil has deep roots.
"The illegal we do immediately. The
unconstitutional takes a little longer"
- Henry Kissinger, New York Times, Oct. 28, 1973
1973 - (jan) USA experiences a cold winter. Price controls are now
'voluntary'. Heavy demand and low US heating oil reserves cause a
shortage of product. Heating oil prices skyrocket. Price control on
heating oil is re-imposed.
1973 - USA government
guarentees to support the tribally-based feudal Saud family
dictatorship in exchange for guarantees the Saud family will accept
only the rapidly de-valuing USA dollar for oil. Saudi oil is
effectively being used as a 'black gold' backing for the dollar.
1973 - USA oil companies state they plan to continuously expand
Saudi oil production into the future based on the premise that
continously expanding Saudi production would be required to offset the
declines elsewhere in the world.
1973 - the
increases its share in the US oil company Aramco (which has 'locked up'
to Saudi oil field exploration and production) from 'tiny' to 'minor'
1973 - (jan) Shah of Iran decrees that the 1954
operating agreement between a government and oil company consortium
would not be renewed when it expires in 1979. The consortium is made up
of USA's Standard Oil, SOCONY-Vacuum, Texas Oil, Gulf Oil,
Europe's Royal Dutch-Shell and Compagnie Francaise de Petroles. It
included the government backed but relatively
powerless Anglo-Iranian Oil Company (AIOC).
1973 - (march) USA re-imposes price control on the 23
largest oil companies selling oil products in USA.
1973 - (march) Iraq and oil consortium members agree to
nationalise oil immediately in return for a guarantee of 20 years
1973 - (june 14) USA has a 60 day price freeze
re-imposed by Nixon.
1973 - Oil is about $US8 a barrel in dollars of the day -
approximately $US13 in todays (Q1 2005) inflation-adjusted dollars
1973 - (september 1) Libya
takes a 51% part of nine foreign oil companies concessions
(Mobil, Esso, Texaco,
Libyan-American (ARCO), SoCal,
Grace, Shell, Gelensberg, Libya/Sirte)
(early october) Arab
countries win control of their own oil resources by
repudiating all previous agreements with foreign oil companies and
nationalising many of the foreign oil businesses operating in their
countries. Oil producing countries governments now decide how much oil
should be produced and sold, and at what price, not the foreign oil
1973 - (october 6) The
war. Syria and Egypt attack Israel. USA backs Israel. Syria and Egypt
suffer a humiliating defeat.
1973 - (october 7) Iraq nationalises Mobil and Exxon oil companies
23% share of Basrah Petroleum.
1973 - Saudi's Abqaiq oil field
peaks at just over a million barrels
1973 - USA is now importing 33%
of its oil requirements. It can no longer influence oil prices by
flooding the market with US oil to moderate prices
1973 - USA conventional natural gas
production peaks at about 63
billion cubic feet per day, or about 11.3 million barrels of oil
equivalent per day.
1973 - USA bankers
bring Japan, emerging as an industrial giant, into the dollar system.
Japan has no oil resources, so imports huge quantities of oil, which it
now agrees to pay for exclusively with American dollars, in effect
helping back the US dollar with
gold, black gold. Oil. The export
earnings are 'invested' in USA treasury bonds (IOU's written by the
American government). The Japanese funds help pay the US government
1973 - (october 16) the so-called 'Gulf Six" - Saudi
Arabia, Iran, Iraq,
Abu Dhabi, Kuwait - raise the posted price of Saudi light crude by 17%,
from $US3.12. to $US3.65 a barrel. Simultaneously, they announce they
will cut production, returning them to more normal levels (after the
oil companies had sold increasingly large volumes of Saudi oil at low
1973 - (october
19-20) Oil embargo placed on Israel and it's supporters
the west by
OPEC to punish Israels western supporters. Saudi Arabia and other Gulf
states refuse to sell oil to the United States. (USA imports around 36%
of its oil needs.)
1973 - (november) - oil embargo now also includes Netherlands, Portugal,
Rhodesia, and South Africa.
1973 - (november and december) Gas station
run out of petrol. Petrol supply is
rationed in many western countries.
(november and december) - peak of the oil embargo by
members of Arab OPEC (Saudi Arabia, Kuwait, the United
Arab Emirates, Qatar, Libya, Algeria and Iraq). About 2.67 million
barrels a day of production is lost.
'The first oil crisis'. While at the peak of the crisis around
2.57 million barrels a day are lost to world
production due to the direct
effect of the oil emabargo, another about 1.3 million barrels a day
drops out due to indirect
recessionary conditions, more unemployment, less driving, less demand.
barrel is regained from extra pumping capacity by non-OPEC
At its peak, the nett drop in world production is about 6%.
Recession spanning late 1973 into 1974 in many Western countries, the
worst since World War II.
1973 - USA - Oil shock
billion dollars is wiped from the New York stock exchange. The
Dow-Jones Stock Market index falls 47%. Some
interest rates hit 20%. Extensive unemployment and under-employment.
1973 (november 27) USA Nixon signs the Emergency Petroleum
Allocation Act to enable the government to control the production,
marketing, and pricing of petroleum in USA.
The USA presidential/military/industrial complex considers (but does
not act on) plans to use the USA military to invade parts of Saudi
Arabia, Kuwait, and
Abu Dhabi and seize some of their biggest oil fields for USA use.
Instead, major OPEC countries are required
to 'invest' all their US
dollar profits from oil sales in USA treasury bills, with half the
interest payable by the USA in the form of USA goods and services -
substantial parts of it being USA built military equipment and training.
1973 - (november) USA -
The US president, Nixon, announces "Project Independence" which he
claims will free United States dependence on foreign oil by 1980. He is
unlikely to believe this is feasible - it is likely he is lying to the
public in order to justify US oil companies exploiting Alaskan
1973 - USA trans Alaska
pipeline from ice bound Prudhoe Bay 800 miles to ice free Valdez is
(january) Kuwait takes 60% in the BP-Gulf Oil
1974 - (early) Oil prices skyrocket by 400% due to OPEC continuing
to limit supply. Prices reach $US25, which is about $US40 in todays (Q1
1974 - (january) USA - law passed to limit speed to 55 miles per
hour in order to conserve petrol and diesel during the petrol shortage
1974 - (january) USA - the winter is particularly cold. Natural gas
inventories are alarmingly low. The US government orders businesses,
shops, malls and all public buildings to reduce their hours of
operation during weekends and at night in order to conserve gas used
for space heating.
1974 - (january) USA -
independant truckers livelihood hit hard and
they strike in protest at the high cost of diesel and difficulty in
1974 - (january) Saudi and Kuwaiti oil embargo is, for practical
purpose, over. Oil prices remain at a new higher, more realistic level.
1974 - (february)
- USA - petrol now 50 cents a gallon (dollars of
the day). People 'garage' or sell large 'gas guzzling' cars, Some
switch to public transport, some buy small cars. Demand for fuel
efficient cars skyrockets within the space of a few months.
(february 11) USA announces Nixons "project Independance' to make USA
1974 - (february
11) Libya nationalises the 3 USA oil
companies which refused to allow a Libyan controlling interest in september last year.
1974 - (march) OPEC embargo against USA officially ends. Embargo on
countries continues. The repercussions continue to
reverberate through western economies.
(june 4) - the Saudi Government
increases its share in the US oil company Aramco (which has the rights
to Saudi oil field exploration and production) to 60%.
1974 - (may) Nigeria takes a 55% controlling ownership of all
foreign oil concessions.
1974 - (june) - USA petrol
is about 55 cents a gallon, or $2.29 a gallon in 2005 dollars.
1974 - (june) German oil import costs have now risen by an additional
17 billion Deutchemarks. Inflation has reached 8%. Transport,
agriculture and the industrial sector have been badly hit, especially
energy intensive businesses such as steel production, chemical
industries and shipbuilding. The oil shock is estimated to have caused
500,000 job losses by now.
1974 - (october) Saudi Arabia increases the tax rate on
the oil consortium profits to 85% and royalty rate to 20%.
1974 - structural inflation from high oil prices has fed throughout
the western economies by the end of 1974. Inflation in western
oil-dependant economies is 11% - 15%. Resultant recession, with low
and high unemployment, continues. The combination of stagnant economies
and high inflation is tagged 'stagflation'.
1974 - Less-developed
economies suffer a 400% overnight increase in the cost of energy
imports. Indias total foreign exchange
reserves of $US629 million cannot meet the the
oil import bill of $US1,241 million a year. This deficit in the
payments is now echoed around all the third world nations.
Developing countries now have an enormous trade deficit of $US35
billion, which is, unco-incidentally, four times (400%) larger than
their deficit prior to the 1973 oil shock.
Onward - the 'petrodollar era -vast flood of dollars into Middle East
as USA and Europe have
to pay higher oil prices in US dollars. Deposited in US and UK banks,
these dollars were interest-bearing to the oil nations, so had to be
re-lent by the depository banks. Banks can loan 'fictional money' of up
to around 10% of actual deposits they hold. These 'imaginary dollars'
were re-lent as eurodollar
bonds to third world countries that didn't have the dollars to pay for
oil imports. This recycling from oil nations to third world nations and
back to oil nations became known as 'recycling petrodollars'. Banks
'clicked the ticket' via interest rates each time it went around. Both
banks and oil companies make huge profits from the third world.
1974 - In the USA, the consumer price index
increases by 12%. High meat prices spark consumer revolts. Some
Washington State butchers offer horsemeat for sale. Recipes for cheap
pasta based dishes abound. A drought in Washington State makes life
worse by reducing water supply to the hydro dams. Brown out results.
1974 - USA. The higher price of oil leads to an increase in the number
wells brought into production, wells which prior to 1973 would not have
been economic to produce oil or gas from (and would have been regarded
as 'dry' for economic reasons, in spite of the presence of oil). It
also leads to the major US oil companies urging the Saudis to
pressurise their reservoirs with water to increase flow from the pumps,
in spite of the risk it might reduce the ultimate yeild expected from
1974 - UNESCO consultant Harry Lustig writes in 'Courier' monthly
magazine of January 1974 -
" To what extent is the world energy crisis upon us now and how much time do we have
before it will reach truly disasterous proportions?
What is the lead time necessary for producing needed technological
innovations and economic and social rearrangements?
How reliable are the estimates of fossil fuel reserves?
How long will the world's stocks of natural nuclear fuel last and how
good are the prospects for controlled fusion?
What is the relative availability , exploitability and cost (economic
and environmental) of the "natural" substitutes: solar, wind,
geothermal and tidal energy?"
1974 - Norways
Statfjord oilfield discovered.
Expressed in todays dollars (Q1 2005), oil prices will remain, on
average, around $US38 - $US40 level for the next 5 years.
1974 - Iran -
the 'shah' announces a policy of developing 23,000 megawatts of nuclear
energy in Iran for electricity and to desalinate water. It is clear to
the government that by 2100 Irans oil and gas reserves would be too
expensive to waste in generating electricty. The option of also
"exploring" its use for "military purposes" is quietly discussed with
USA and other Western states. The US react by using their influence with
to ensure that two US constructors, General Electric and Westinghouse,
have a preferred status in pitching their reactors to Iran. Ultimately,
the shah awards the contracts to France and Germany.
1975 - USA economy still in "the worst business slump since the great
depression". In the worst week, there are 1 million newly unemployed
register for jobless benefit. LA police department trains its officers
in crowd control in case of possible food riots.
1975 - (December 22) USA - law signed to establish a 'Strategic
Petroleum Reserve' as a result of the lesson of the 'oil shock'. It
also allows government control of domestic oil prices if necessary.
1975 - Saudi agree that
exclusively for the
sale of their oil.
1975 - (december) Iraq completes the nationalisation of Basrah
oil by re-nationalising the concessions controlled by BP,
Shell and CFP.
1970's - as the US dollar
becomes the de facto world reserve
currency, central bank gold reserves become a 'non-performing
asset' as they do not yeild interest. Many central banks begin to
reduce their holdings
1976 - number of USA oil
workers (mainly US controlled ARAMCO oil company) in extremely
Saudi Arabia now peaks at 30,000. USA exports from the USA
industrial-government-military complex to Saudi Arabia reach $2.8
billion. Saudis increasingly concerned about US de facto economic
1976 - date all benefits
of Armaco are ear-marked to go to the Saudi
government in several years time.
1976 - Saudi Arabia has
somewhere between 5 and 10 billion dollars 'invested' in USA treasury
bonds by now. The dollar firms as a result, and the stockmarket has now
rebounded. 'Kindness' must be rewarded.
1976 - the year the last new
oil refinery is built in the USA
1976 - Saudi's Berri oil
field peaks at around 800,000 barrels a day.
1976 - China's Daqing
mega-oilfield peaks at 916,191
barrels crude a day.
- USA president Ford signed a directive offering Iran an option to buy
and operate a US-built nuclear fuels reprocessing facility as part of
an Iraqi owned and operated nuclear energy program using Iraqs own
uranium deposits. The
proposal is for reactors powered by nuclear fuels processed from
Iraqi-mined yellowcake which are then
reprocessed after use in the reactor to extract plutonium. This
regenerated fissile material is then used as fuel once more. The
plutonium created from the spent nuclear fuel could, of course, be
further processed into a grade usable in nuclear weapons. The chief of
staff of the White House, Dick Cheney, and Secretary of Defense Donald
Rumsfeld both endorse the proposal.
1976 - oil (Saudi light) is $US12.37 a
1977 (july) - USA -
The purchase of salt caverns in the Gulf of Mexico for the 'strategic
petroleum reserve' for use in emergencies
is now complete, and filling commences - 412,000 barrels of light crude
oil are deposited in
the first of the salt caverns in southern Louisiana and East Texas,
close by oil
refineries. Total capacity of the reserve is 117 million barrels.
1977 (july) - oil is $US13.66 a barrel.
1977 - USA - Oil imports are now
6.6 million barrels a day.
1977 - 8 billion dollars and 800
miles later, oil flows from
trans-Alaskan pipeline from Prudhoe Bay.
1977 - USA - Severe
winter co-incides with a natural gas shortage. Prices rise dramatically.
1977 - USA -
President Carter gives a televised address
in which he warned that oil consumption was exceeding the rate at which
new oil was being found and outlining a government programme of
conservation and switch to coal, nuclear, and renewable energy.
1977 - Iraq completes a pipeline from Kirkuk oilfields across Turkey to
a terminal in the Mediterranean at the port of Dortyol.
1977 - Saudi Arabia now produces 10 million barrels of crude a day.
1977 - Saudi
Arabia's production is cut in half due to a fire in a
separation facility in the Abqaiq field. Prices barely move, as many
other countries have spare capacity.
1978 - crude oil is $US14 a barrel.
1978 - Prudhoe Bay oil field pipeline
to Valdez (the Trans Alaska Pipeline) finally opens after 2 years of
construction and expenditure of around $US8 billion.
1978 - Saudi Arabia - last
exploration well brought into production from the salt domed structures
of northern Arabia, mostly offshore. Since start of exploration of this
province in 1938, 12 oilfields yeilding a million barrels a day of oil
were found. The earliest fields discovered have the greatest total
reserves. The 6 fields found 1938 to 1963 had total reserves of about
5,500 million barrels of oil. The 6
fields found this year have a total of about 1,000 million
barrels of oil.
1978 - (june) -
bloc of OPEC members seek higher prices for crude, and try to get
acceptance for oil being priced in a more stable currency than the US
dollar. Saudi Arabia and Iran block the move.
1978 - Iran's 'Shah' puts the country under military control as
agitation for a muslim religion-based state continues.
1978 - (october) Fire in an Iranian pipeline drops production by over
300,000 barrels a day.
1978 - (mid
december) Iranian production is 1.5 million barrels a day.
1978 - (end of december) Iranian production drops precipitously to
about 500,000 barrels a day.
1979 - OPEC, mainly Saudi, production increases by an additional 1.6
million barrels a day by end of february to make up Iran's shortfall as
Iranian domestic turmoil continues.
1979 - (january 20) Saudi Arabia turns up the heat by announcing that
it will cap its production at 9.5 million barrels a day during the
first quarter of 1979 (in the end it doesn't). Oil prices rise by 36%.
1979 - (january) USA uses its compulsory buy-sell laws to allocate
crude oil resources and to cap the price of oil products.
1979 - UK becomes oil independant - all domestic requirements are
met from the North Sea fields. However, while supply is secure, oil is
sold by the oil companies at global prices. The UK pays the same high
prices as everyone else, albeit the government receives a better
1979 - Mexicos
supergiant oil field, the Cantarell Complex, with massive reserves of
35 billion barrels of oil, (destined to become the second largest oil
producing field in the world, after the massive supergiant Saudi Ghawar
field), comes into production.
1979 - Final
audit of Saudi oil fields by foreign
petroleum companies to establish true value of Saudi field assets.
established around 110
billion barrels of proven
1979 - (feb 12) Iranian revolution commences as the Shah has fled and
the interim government loses the support of the military.
1979 - (march 5) Iran starts to export oil again.
1979 - (Q2) oil once more plentiful,
but global stocks of refined
petrol have been drawn right down, and refineries are playing
'catch-up' and can't meet demand. Some states in USA are short of
gasoline and ration it, other states have ample supply.
1979 - USA - Energy saving policies introduced, including requiring
public buildings to be heated no higher than 65 degrees in winter. In
order to conserve petrol, gas stations in some states open only on
1979 - July 15 - USA President Carter gives a speech to the
"In little more than two decades, we've
gone from a position of energy
independence to one in which almost half the oil we use comes from
foreign countries, at prices that are going through the roof. Our
excessive dependence on OPEC has already taken a tremendous toll on our
economy and our people.
This is the direct cause of the long lines
which have made millions of you spend aggravating hours waiting for
gasoline. It's a cause of the increased inflation and unemployment that
we now face.
This intolerable dependence on foreign oil threatens our
economic independence and the very security of our nation."
1979 - Uranium
"yellowcake" spot prices reach a record high of $US43
1979 - (july 30) New Zealand faces a petroleum shortfall and
institutes fuel conservation measures, including 'carless days' when
owners must designate (via a windshield sticker) a day of the week on
which they will not drive their car. The speed limit is reduced, and
sale of gasoline in weekends is banned. The restrictions remain in
place for the next 6 months.
1979 - (october) Canada stops supplying light crude to USA refineries
in order to conserve domestic supplies.
1979 - (november) Iranian 'revolutionary guards' take USA embassy
hostages. USA stops all Iranian imports. Iran cancels all contracts
with USA oil companies.
1979 - (december) nervousness over the Iranian revolution continues.
$US32.50 a barrel (dollars of the day)
1979 - USA president Carter sets up the US Central Command - a
military quick reaction strike force prepared to bomb, invade and
control any oil supplying Middle East country at any time the
presidential-administrative/military/industrial complex dictates.
1979 - the world uses about 63
million barrels a day.
1980 - USA - the Maryland
Cove Point LNG regasification plant is closed.
1980 (january) - Iranian 'shah'
deposed. The second
'oil shock'. Oil production
of 2 to 2.5
million barrels a day disappears from the market. 'The second oil
crisis'. Oil price
literally skyrocketed straight up from $US15 per barrel to nearly $US40
per barrel (dollars of the day), also partly fuelled by a surge (and
speculation) in the prices of commodities in general. In 2004 dollars
this is estimated at about $US110 a
(january 23rd) - following the deposing on the US supported 'shah' of
and the Russian invasion of Afghanistan, US
president Jimmy Carter establishes
what became known as 'the
Carter Doctrine', the doctrine of openingly using the presidents
economic purposes - to
countries oil resources for USA use, and keep Middle East supply lines
under USA control.
"Let our position be absolutely clear: An
attempt by any outside
to gain control
Persian Gulf region will be regarded as an
assault on the vital interests
of the United States of America, and
such an assault will be repelled by any means
military force." - President Jimmy Carter (emphases added)
presidential office will in
future use his soldiers to kill and maim civilians (including
children), to fight and themselves die, to either maintain direct
East oil reserves, or maintain other nations oil-supply
access to the Middle East, whether via the Straits of Hormuz, or in
A blockade in the Straits would make
no direct impact on USA as it gets less than 20% of its supply from the
Middle East; but if other countries cannot obtain Middle East oil they
will bid up the price of oil from other sources outside the Middle
East, oil that USA relies on.
1980 - USA
Arabia's Osama bin
Laden, amongst others, to fight the
Afghanistan. He, and others like him, promote the brutally violent and
chauvinistic Saudi Arabian
fundementalist version of their religion - including killing anyone who
doesn't hold their particular religious views.
1980 - Saudi regime agrees to pump excess oil to keep prices low so
that Russia will have insufficient revenue to spend on the arms race at
the same time as it has to finance a brutal invasion of Afghanistan.
1980 - Saudi government given retroactive
ownership of all
National oil via full ownership of Aramco. In addition, all financial
benefits of the company since 1976 are given to the Saudi government. Payback
1980 - (september 17) Iraq unilaterally breaks the 1975 treaty with
Iran over territorial rights in the Shatt al-Arab waterway
and claims it in its entirety for itself.
1980 - (september 23) Iraq
invades Iran. Both sides bomb each others oil installations.
oil production falls by 2.7 million
barrels a day.
Iranian oil production falls by 600,000 barrels per day.
Oil prices reach an all time high - $US35 a barrel by years end, or
$US92 when translated to todays (Q1 2005) dollars (some commentators
compute it at $US80 in inflation adjusted terms, others at $US100,
Gold price is
inflated by speculation to an all time high - $US840 in dollars of the
1980 - Post
oil shock deep recession
the west - partly created by a major shift in USA monetary policy by
Federal Reserve Chairman Paul Volker (restricted money supply to try to
curb Americas raging inflation, causes volatile and high interest
rates, reduced business investment, and an historic low in the value of
In addition, structural oil-inflation helps overall inflation reach
10%. Unemployment in USA is 8%, interest rates reach nearly 20%.
Double digit interest rates mean some businesses and households can
no longer pay their savings and loan debts. The USA Federal
Deposit Insurance Corporation fails under the sudden burden of savings
institutes declaring bankruptcy, and has to be bailed out.
1980 - the deep recession
results in global "demand destruction" and
consequent drop in demand for crude. More than this, it prompts a move
insulate new homes, retro-insulate existing homes, attention
to energy efficiency in industry as well as in housing. In
countries with heavily taxed petrol, there is a re-focus on fuel
and public transport.
1980 -1988 - US and the UK governments and businesses supply Saddam
Husein with armaments, chemical and biological
weapons of mass destruction precursors, naval
support, military training, and access to satellite targeting.
As the Iraq-Iran war drags on, great
damage is done to oilfields and civil infrastructure on both sides.
Oil supply is interrupted. More than a million people are killed,
combatants and civilians alike.
1980-1981 - Oil supply shortfall
has created actual shortfalls in
supply in some countries. Some countries institute a system of carless
days, when private automobiles may not be driven on a self-selected
designated day. The car-less day is indicated by a sticker on the
windscreen. Transgressors are heavily fined.
1980-1981 - winter
heating oil in USA tips over $US2.50 a gallon in 2004 inflation
1981 - US government removes price control on US domestic oil
produced, domestic producers raise their prices rapidly.
1981 - (january) major offensive by Iraq against Iran is beaten back
by the Iranians.
1981 - USA residual petrol price and allocation controls are lifted.
- (march) 'oil shock' gasoline prices in USA reach an historic high -
gallon; inflation adjusted, about $US3.10 per gallon in 2005
1981 - Predictions of crude oil prices reaching $US100 a barrel sets
off an oil exploration frenzy within USA
1981 - USA
has 324 refineries whose total capacity to refine crude oil is18.6
million barrels a day.
- USA strategic reserve capacity is increased to 257
1981-1982. In the period 1979 to 1982
global oil demand growth
falls off by 9.6%.
1981 - the
East-West Crude Oil Pipeline (Petroline) operated by Mobil Oil Co is
completed. This single, 48-inch pipe line (AY-1) transports Arabian
light and super light crude to refineries in the Saudi Arabia's Western
Province and to terminals on the Red Sea for export to Europe. Capacity
million barrels a day.
1981-1982 - Recession drops demand for oil at the same time Saudi
Arabia completes major new pumping capacity. Oil glut results. OPEC
temporarily loses control of price setting for oil.
1981 - Saudi's Ghawar super-giant
field (the world's largest) peaks at a little less than a massive 5.7
million barrels a day.
1981 - Saudi's Safaniya field
peaks at a lttle more than 1.5 million barrels day.
1981 - Mexicos giant Cantarell complex reaches
peak of supply at 1.1 million barrels a day.
1981 - Russia giant
Samotlor field peaks
at about 3 million barrels a day. The around 16,700 wells of this
giant field produce close to a quarter of Russias oil, almost 150
million tons a year.
1982 - USA -
Texas oil production has now dropped by 29% since peak of production in
1972, in accordance with the curve described by Hubbards theory of oil
production in a field increasing, peaking, and declining.
1982 - Number of rigs
looking for oil and gas in USA (due to 1980
oil shock) has doubled
from 1980 levels.
1982 - (march) Syria closes the 400,000 barrel a day trans-Syria
pipeline carrying Iraqi oil in support of Iran.
1982 - (june) tide of war turns against Iraq. Iraq announces a
ceasefire. Iran pushes into Iraqi territory. Iraq responds by launching
missiles into Iran.
1982 - (august) Mexico defaults on the vast debt owed to banks recycling
1983 - Colombia - USA's Occidental
petrol commence production from the giant Caňon-Limon field (with
reserves of 1.1 Gigabarrels).
1983 - Trading
in contracts for future supply (betting on whether oil will have
increased or decreased in price at a defined future date) commences on
the New York Mercantile Exchange. The previously used fixed long-term
supply contracts decline in importance. The existance of numerous
traders and re-traders helped keep willing supply ahead of demand, and
increased the quick replacement of oil lost from source (for whatever
eason) with oil from another source (via intermediaries). Targeted
embargoes are now virtually impossible - any oil sold to a trader can
be re-sold numerous times, and end up literally anywhere. The producing
country no longer controls the destination.
1983 - world consumes
reduced oil due to higher prices and recessionary effects - still only
roughly 55 million barrels
of oil a day.
1983 - (july - October) Heavy fighting between Iraq and Iran, with
close to capturing the Kirkuk pipeline, and the USA threatening
military intervention to keep open the Persian Gulf tanker navigation
1984 - Iraq Iran war moves
into the "tanker war" phase.
44 ships and tankers - Saudi Arabian,
Iranian, Iraqi, Kuwaiti - are attacked and damaged by Iraqi or
Iranian warplanes or mines.
1984 - Saudi LPG production capacity is now 600,000 barrels of liquid a
1982 -1985 - Oil
is now over-supplied, partly due to the 'demand
destruction' lingering on from the second 'oil shock', with Norway, UK
cutting prices in 1984. Oil drops to about $US60 in
dollar terms (in 1984 light crude
was around $US57 - $US69 in adjusted year 2005 terms). OPEC members
their OPEC quotas as
there is no method of enforcing breaches. Saudi Arabia regularly acts
to cut its own output to try to prevent the price falling too far. OPEC
members suddenly 'find' much larger reserves in order to have a larger
quota for sale. OECD
and US escape the recession slipping into depression - resume
previous growth off the back of the balanced budgets of 1979/80.
1985 - after a series of oil price dips due to dampened demand
previously high crude prices and OPEC lack of discipline, Norwegian and
North Sea oil comes on
stream creating even higher supply, OPECs market share falls by 50%.
New capacity allows better market balance.
These finds mark the very
temporary return to 'cheap oil' for
the next decade or so, until they
start to peak and the Middle East fields once more gain greater world
1980's - Cheap oil and US government need to artificially back its
dollar with oil, combined with US 'petrodollar' greed, start to destroy
western manufacturing and jobs as USA banks, via the IMF,
deeply indebted third world countries to make their natural resources,
and labour available very cheaply to foreign firms ('globalisation') as
price of rolling over their crippling
petrodollar debt. A debt now totally unmanageable due to interest
rate increases. A debt denominated in dollars, supporting USA ability
to print money. 'Outsourcing' starts to erode the viability of European
and USA manufacturing businesses as they can no longer compete with the
semi-slave conditions and absent pollution regulations of third world
labour and industry.
1980's - USA - uneconomic oil refineries are closed down.
1985 - continuous decline in USA capacity to produce oil
the previous years confirms USA oil fields have indeed passed their peak of
production and are declining overall. 
1985 - USA - increased local production plus residual demand
destruction keeps imports of oil to USA at 3.2 million barrels a day,
about half pre-oil shock levels.
1985 - Iraq and Iran commence heavy bombing of each others
cities, Iraq responds with lightening raids into Iran, Iran responds
with strikes against Iran's Kharg
Island oil terminal, from which a large part of
Iran's oil is exported.
late 1980's - Iran - work starts on rebuilding the war damaged
Hydrocarbons - oil and gas - are earmarked for sale to earn foreign
exchange to fund reconstruction. Work starts on rebuilding the Bushehr
nuclear power plant to provide replacement electricity now provided by
oil and gas burning generators.
december 1985 - OPEC in
disarray as members undercut agreed prices in
order to secure market share. A price war develops. OPEC countries are
allowed to produce and sell oil in proportion to their reserves. The
more reserves a country reports it has, the more its share of the OPEC
quota it gets.
1986 - USA oil exploration industry is severly cuts as oil prices drop
(one of the biggest one day drops was from $US29.00 to $12.00 for Gulf
coast sweet). Staff cuts of experienced oil personnel reach 50% in some
firms. Many experienced riggers leave the industry entirely, as no jobs
found. No young staff are taken on. As the domestic industry implodes
some oilmen commit suicide, some escape to drugs and alcohol. Many take
enforced pay cuts.
1986 - Saudi
Arabia stops trying to keep prices up by cutting its
own production and links prices to the spot market. The Saudis increase
production from 2 million barrels a
day to 5 million barrels a day, substituting volume for reduced price.
In the face of this huge oversupply,
prices collapse below $10 a barrel (dollars of the day).
Expressed in todays dollars (Q1 2005), oil prices will once more
average, around the $US38 - $US40 level for the next 15 years. Drilling
becomes much more cost effective, using enhanced techniques such as 3-D
seismic data, targeted directional drilling, and CO2
maximise success and enhance productivity from existing reservoirs. In
spite of these techniques, exploration in USA is increasingly
unproductive, and exploration falls away steadily. The wells that are
drilled are much more successful than in earlier years. Technology
allows far more accurate
decision to be made about whether to drill or not, and only highly
prospective formations are tested.
1986 (may) - Iraq bombs a refinery in the capital city of Iran.
1986 (june and july) - Iraqi jets attack a satellite station and the
city of Arak in central Iran. Iran threatens to use missiles against
any gulf state supporting Iraq.
1986 - (august) Iran launches missiles against a refinery near
Bhagdad. Iraq responds by damaging the Iranian export terminal at Sirri
1986 - (december) -
USA - unleaded petrol is now US0.80
cents a gallon.
1986 - Peru - The gas Camisea fields are discovered. Reserves are
estimated at 13 trillion cubic feet of natural gas and 660 million
barrels of condensate.
1987 - Monday October 19th - Global
stock market crash. Under conditions of cheap oil, frenzied buying and
selling of stock, some in 'shell' companies that produced nothing,
leads to insider trading and clampdown by regulators. In reaction,
institutional investors buy heavily into futures contracts to cut loss
in case of stock devaluations. In the USA, computers are now widely
used to automatically trigger 'sell' orders if stocks reach a certain
low point. As the USA dollar is devalued, the dollar-based Hong
Kong exchange is sold down. A cascade of more sellers of both stocks
and futures contracts than buyers leads to a lack of
buyer confidence, panic selling of stock and (wildy leveraged) futures
contracts. The Hong Kong market crashes, followed by Europe. In
USA a cascade of selling occurs, quickening pace as further computer
generated automatic sell
trigger points are reached, and with no time for buyers to step in..
$US500 billion of value in the Dow Jones index is wiped out - within 1
day. Other markets had similar experiences, with Hong Kong's crash the
most spectacular - over 45% of the value of the stocks on the
market wiped is out.
USA responds by creating the 'Working Group for Financial Markets',
known cynically as 'the Plunge Protection Team'. It is made up of of
the US Federal Reserve, the Dept of Treasury, the Securities &
Exchange Commission, and a few powerful banks & Wall Street stock
1987 - the UK government after many years finally ends its very
close association with the oil industry by abandoning its shareholding
in British Petroleum and relinquishing its seat on the board of this
1987 - The Saudi
(Aramco acquired control in 1984) East-West Petroline is now expanded due
to the 'tanker war' in the
Gulf to 3.2
million barrels a day, and a parallel 56-inch
pipeline (AY-1L) is added.
1987 - Iraq/Iran war continues unabated.
1988 - Iran accepts a ceasefire offered by Iraq.
- Article in Scientific American called “The End of Cheap Oil” predicts
world oil production would peak in 2002 (it didn't) and warns “what our
society does face, and soon, is the end of the abundant and cheap oil
on which all industrial nations depend"
1988 - Vast Russian Shtokman gas field discovered in the Barents
Sea. It is believed to contain 113 trillion cubic feet of gas
and 31 million tonnes of condensate. The hugely difficult arctic
environment, and lack of capital, makes it impossible to develop.
1989 - Prudhoe Bay, which had
produced around 1.5 million
barrels a day for nearly 12
years reaches peak of its production.
1989 - Russia
Samotlor oil field now
produces about 2.75 million barrels of oil a day, and, only eight years
on, enters a period of very steep decline.
Saudi Arabia re-estimate of its reserves takes them from 170
gigabarrels to a claimed 258 gigabarrels "overnight".
1990 - (august 2) Iraq invades Kuwait. Oil price almost
doubles, from $US15 to more than $US30 (dollars of the day) as 4
million barrels a day (544
000 tonnes/day) are removed from supply.
1990 - (august) USA
secretary of defense Cheney notes “Our
interests in the Persian Gulf region, I think, are well known...We
obviously also have a significant interest because of the energy that
is at stake in the gulf.” He was (in part) referring to Iraq acquiring
10% of the world oil reserves by invading Kuwait. “Once [former Iraqi
President Saddam Hussein] acquired Kuwait and deployed an army as large
as the one he possesses,
he was clearly in a position to be able to dictate the future of
worldwide energy policy, and that gave him a stranglehold on our
economy and on that of most of the other nations of the world as
1990 - (august) USA's Bush (Snr) invokes the Carter Doctrine
to send military to guard Saudi Arabia against the possibility of an
1990 - (august 27) OPEC agrees to make up the shortfall by increasing
production. Oil prices plunge lower again.
1990 - (august) the IPSA pipeline, a 48-inch Iraqi pipeline running
across Saudi Arabia to the Saudi Red Sea port of Mu'ajjiz, just
south of Yanbu, is closed by Saudi Arabia "indefinitely" due to the
Iraqi invasion of Kuwait. The line has capacity of 1.65 million barrels
1990 - (september 21) USA refinery problems generate reports that
200,000 barrels of crude a day may not be able to be processed. This
news, coupled with Saddam Hussein saying he would strike first against
regional oil facilities if threatened causes oil prices to soar once
1990 - (october) UK asserts force will be used if Iraq does not
withdraw from Kuwait.
1990 - (november) Sufficient US forces are now in place to
finally ensure the safety of Saudi Arabian oil fields. UN Security
Council approves a U.S.
sponsored resolution that if Iraq does not
withdrawal from Kuwait by january 15th 1991 then force may be used to
remove Iraq from Kuwaiti territory.
1990 - (december) Iraq agrees to withdraw from
Kuwait if it can keep the Rumailah oil and gas field and keep Bubiyan
and Werbah islands. Peace talks break down.
1991 -U.S. launches cruise missiles into
southern Iraq to help defend the Kurdish safe
areas of northern Iraq. This is followed by an historically large
of oil onto the world market, reduced Asian demand due to the Asian
crisis and warm winters in the West cutting demand for winter fuel oil.
1991 - (january) Oil prices spike upward by $US5 to over $US30
a barrel in dollars of the day as the 'deadline' draws near for Iraq to
1991 - (january 16) USA declares war on Iraq and
commences air attacks on Iraqi military targets. On the same day, USA
releases over 38 million barrels of oil from its strategic
reserve for sale or use. Oil prices immediately drop by up to $US10 a
barrel on the news.
17) USA liberation of Kuwait - Operation Desert
barrels of USA 'strategic petroleum reserves' are
on the world market by Bush snr. The International Energy Agency also
release oil and oil products from members strategic reserves. The price
drops even further to about $US15 (dollars of the day). Saudi Arabia
uses excess productive
capacity to help increase supply.
1991 - (january) Iraqi missiles launched against Saudi Arabian oil
1991 - USA bombs Iraqs
civilian electricity generation stations. USA destroys around half the
Iraqi generating capacity - reducing it from about 5,100 megawatts to
about 2,300 megawatts.
1991 - (february 28) End of war. Saddam Hussein orders his troops to
return. Iraqi forces set fire to or sabotage 700 Kuwaiti
oil wells as they retreat.
1991 (november) Last damaged Kuwaiti oil well finally capped.
Millions of tonnes of oil have been lost since January.
1991 - Columbian Cruz Beana oil field discovered, the largest oil
resource found in the Western hemisphere since the 1970's.
1991 - $US256 billion surplus taken from US Federal Social Security Trust Fund
(alone) to help finance budget deficit rather than let it accumulate to
finance the coming increased rate of retirees due to the 'baby boomer
bulge'. This trend increases
year-on-year as USA to fund gross oil dependance.
1991 - post Gulf war
recession. People stop spending. Air travel is hit hard, with $US13
billion being wiped off airline income.
1991 - Russias
Samotlor oil field has just experienced precipitous decline, and now only produces about
0.75 million barrels a day, partly as a result of poor field management
1991 - (october) - Soviet Union suspends exports of petroleum
products as a domestic shortage grows. Oil prices rise by about $US2 a
1991 - Qatars North gas field comes into
- Collapse of the
Soviet Union, US oil companies were barred from bidding for the
Early 1990's - high expectations that significant amounts
of the world's new oil and gas resources would come from the countries
of the former Soviet Union and from China. Canadian consortium takes up
concession in Sudan to develop its oil.
Early 1990's - expert
opinion in the oil industry generally agrees oil demand will remain at
66 million barrels a day far into the future
1992 - China
imports oil for the first time ever.
1992 - USA oil field service and
drilling costs per well (adjusted to 2005 dollars) are $US582,510.
1992 - Kuwait is now able to produce 400,000 barrels of oil a day. It's
OPEC quota was 1.5 million barrels a day.
1992 - Dubai is now producing almost
400,000 barrels of oil a day
1992 (december) - Canada and Mexico sign a 'free' trade agreement with
USA by which they are obliged to sell oil and gas to USA ahead of
conserving it for their own future domestic needs.
1992 - Mexico produces an
historically high amount of oil for the year, 2.75 million barrels a
1993 - Mexio buys a half interest in Shell's Deer Park refinery near
Houston, Texas. The refinery is upgraded and converted to allow Mexicos
Mayan medium sour (sulfurous) crude oil to be processed. This heavy
grade makes up about 50% of Mexicos oil production. 'Residuals' from
this heavy grade are used to generate electricity in Mexico City,
contributing to air pollution. The initial shipments are around
140,000-160,000 barrels per day . In return Shell is guarenteed a
thirty-year contract (expires 2023) of supply of the cheaper Mayan
crude The joint venture produces 35,000 to 45,000 bbl/d of
unleaded gasoline which is sold to Mexico, filling roughly half Mexicos
import needs for erfined fuel. Mexico has insufficient refinery
capacity to refine enough for its domestic needs.
1993 - Europe - about 20%
of passenger cars are powered by diesel engines.
1993 (november) - OPEC and North Sea overproduction weakens demand.
Prices drop to almost $US15 a barrel.
1993 - Saudi Petroline
capacity is now
increased to 5 million barrels a day
by boosting the pumping capability on the line. This was a strategic
move, in case the Gulf was blocked by war.
1993 - China
- as demand for fuels continues to surge, China becomes a nett
importer of refined oil products.
1994 - Oil prices reach their lowest
point in inflation adjusted terms
since 1973 following the post Gulf War (1) recession. OPEC disciplines
its members to cut oil
to drag the price off the ridiculously low $US10 per barrel mark (in
adjusted dollars, the lowest prices ever.). As supply decreases
and demand increases again as the US and Asian economies pick up, we
back to about US$30 per barrel.
1994 - end of the
flurry of oil exploration offshore in Saudi Arabia that started in 1987
and spurred on by the Gulf war. No wells capable of a
million barrels a day are found, in contrast to earlier explorations.
1994 - China fills
almost all its demand from oil from domestic supplies. China uses only
about 3 million barrels of oil a day, but even so, China is now the
world's fourth largest oil consumer, after USA (more than 15 million
barrels a day), Japan and Russia. Coal is in
temporary short supply, forcing a turn to oil as a substitute.
mid 90's - Columbian
Cruz Beana oil fields production peaks
at 500,000 barrels a day
1994 - USA gas fields
in the 'lower 48' states (excludes Alaska) reach their peak of
productive capacity, at 55 billion cubic feet a day. Production slides
from this point.
1994 - Mexicos Cantarell
complex, the second biggest oil producer in the world, continues down
the decline side from peak,
producing only 890,000 barrels of oil a day. Cumulative production from
its very high initial reserves at the time of commencement of
production is only 4.8 billion barrels.
1994 - USA
imports about 600,000 barrels of oil a day from Iran.
- The Baku-Tbilisi-Ceyhan pipeline contract is signed between US and
British oil interests and Azerbaijan's Heydar Aliyev ( head of the
local KGB in Soviet times).
The objective is to secure oil for the US and Europe from other than
Middle East sources.
1994 - some international
financial institutions may now be commencing to artificially manipulate
the price of gold so that it remains at about $US400 an ouince less
than the expected price relative to currencies, and 'de-links' from the
price of oil. Central banks, prohibited from selling more than 500 tons
a year under the Washington Agreement, have devised various means to
sell gold. One system is to 'swap' gold with each other, with each
central banks 'swapped' gold being 'leased' to a lower tier bullion
banks (who also trade in oil) at a very low interest rate, virtually
'on call'. These bullion banks sell the gold and invest the proceeeds
in bank and treasury bonds at a yet higher rate of return. But if the
central bank ever wants its gold back, bullion banks would then have to
re-buy the gold at current market rates...Other manipulations involve
complex forward hedging of undelivered gold. These schemes may fail
when forward contracts are written for a higher volume of gold than is
physically traded on the markets....
1995 - early - USA signs a rescue package with Mexico, loaning $US50
billion. In return, Mexico agrees to deposit a portion of oil revenues
with the USA federal reserve as collateral for the loan, thereby
helping back the USA dollar with oil.
1995 - Norwegian oil and gas companies sign a long-term
supply contract with Gaz de France to supply 1.4 trillion cubic feet of
gas to France starting 2001 and running to 2027.
1995 - Russia's
Yeltsin, with the country nearly bankrupt following the breakup of the
Soviet Empire and disasterously low oil prices, signs a $15.2-billion
Agreement' (PSA) with
ExxonMobil to develop oil and gas fields
offshore Sakhalin Island at desperate 'giveaway' prices.
PSA’s are highly weighted in favor of the oil companies, and are
usually used by
major Anglo-American oil companies when dealing with weak and corrupt
third world countries to maximise profit and minimise risk to the oil
company. The PSA stipulates Russia will get nothing
until all costs have been recovered, and only then will receive a share
of oil or gas that is eventually produced. In effect, Russia
pays all development and production costs. The deal also
allows the oil majors to pay no tax to the Russian
The project - dubbed 'Sakhalin
1' - will develop the Shayvo, Odoptu, and
Arkutun-Dagi fields. These fields are estimated to contain about 2.5
billion barrels of oil and about 15 trillion cubic feet of natural gas.
Exxons stake is 30%.
1995 - (april) USA unilaterally announces an oil embargo against Iran.
No USA company may buy Iranian oil.
1995 - July 6 - Venuezuela commences a regime where it will open
up exploration concessions to foreign companies, so long as the
government retains a majority stake in developing fields where oil is
1995 - Saudi Arabia gives the development of the 7
billion barrel Shaybah oil field to the USA Parsons
Corporation. When it comes on line it is expected to produce 500,000
barrels of crude a day.
1995 - Mexico starts
pressurising the declining Cantarell formation with nitrogen gas to
increase oil flow back to earlier
levels.. New holes are added to increase the extraction rate.
1995 - US president signs an Executive Order (12959) prohibiting US oil
companies from oil exploration or development with Iran.
1995 (august) - Iran
cannot find a market for 200,000 barrels a day of crude oil since the
USA imposed its unilateral oil embargo on Iran. Before the USA embargo,
USA companies were buying about 400,000 barrels of oil a day from Iran
so far this year.
1995 (october) - a rare late-season hurricane, hurricane Roxanne
(category 3), stalls for days over the southern Bay of Campeche and
severely damages much of Mexico’s production
facilities in the Gulf of Mexico. Around 40 million barrels a day
production - is lost for eight days. Production falls from
2.59 barrels a day to 600,000 barrels a day. Most of this would have
been sent to USA refineries on the USA Gulf coast. The refineries
have insufficient time to fully compensate for the sudden disruption to
their throughput planning.
1995 - Mexico now oil production increase to 2.85 million barrels a day
by years end. This is the highest flow rate yet, and comes about from
application of aggressive new technologies such aas horizontal
Mexico's revenues from oil exports are $US1 billion.
1995 - nearly 80% of
Mexico's oil is exported to USA. In august it
increased to 83%, about 1.25 billion barrels a day.
commences a promotion of natural gas as an automotive fuel and
electricity generating source. The objective is to conserve the oil
reserves for export, as it is easier to ship oil than to ship
1995 - Syria is now
producing 600,000 barrels of crude per day, and about 2 million cubic
metres of natural gas per day.
1995 (december) - Angola is now producing about 690,000 barrels of oil
1995 - Peak of
funding in USA for research into hydrogen as a fuel. A CRS report for
Congress notes "Since considerable energy is consumed in the
extraction process [of hydrogen from coal or gas or water], hydrogen
should properly be considered an energy carrier rather than an
energy source...hydrogen is somewhat like electricity, which
must also be produced from some other energy source". In spite of this
obvious fact, congress seems oblivious; funds are spent researching
hydrogen fuel cells and storage systems, rather than exploring
renewable energy sources such as photovoltaics.
1996 - Syria crude oil production
peaks at around 604,000 barrels per day.
1996 - China is now a
nett importer of crude oil for the first time.
1996 - The
China National Petroleum Corporation, owned by the Communist Party
government, buys a majority stake (40%) of the Sudan/Indian/Malaysian
oil consortium (the Greater Nile Petroleum Operating Co). It builds
Sudans largest oil refinery in conjunction with the Sudanese Energy
1996 - The
Iran-Libya Sanctions Act 1996 passed in USA. Having
prohibited US companies from joining Iran in oil and gas development,
the US administration attempts to frighten other countries away from
benefiting from Iranian oil and gas. The chief purpose, however, was to
prevent US oil companies investing in a proposed pipeline from the
Caspian oil fields through Iran to the Persian Gulf. For strategic
reasons, USA wants the Caspian oil to flow west to Turkey via the much
longer and more expensive
Baku-Tbilisi-Ceyhan pipeline. The objective was to break the
Russian monopoly on oil exports from the region, and further isolate
1996 onward - From 1965 up to about 1996 the price of both gold and oil
have been highly co-related. From about 1996 the price of gold
'de-couples' from the price of oil in the face of central bank
manipulation of gold supply and a huge credit bubble from run-away bank
housing and lifestyle in both Eurasia and North America.
1996 (april 30) - USA - 28.1 million barrels of crude sold from the
reserve to raise money for the USA government. There are a total of 3
sales. The purpose the money was applied to was ostensibly to 'reduce
the federal deficit'; but in truth it remains unclear.
1996 - Asian economies booming, with Asian banks making ill-advised
business loans for expansions, mergers and aquisitions.
1996 - Start of trend of
global growth in per capita consumption of coal, oil, and gas,
structurally more heavily weighted to developing countries (initially
low due to late industrialisation) with large, urbanising, and
expanding populations as industry is out-sourced from the West. The
Wests per capita consumption (already high due to early
industrialisation) increase is less or level, as it has a smaller and
slower growing population that is already urbanised, and whose per
capita engagement in industry is falling with mature efficiency
practises and outsourcing, while at the same time per capita engagement
in less heavily oil dependant financial and service industries
continues to rise. Even a small increase in demand per capita in China
and India translates to a huge increase in global consumption demand.
This means, even as decline in global production commences, higher oil
prices are botth supported and made relatively price insensitive. When
West Eurasian and North American demand for cheap goods is destroyed by
internal recession and unemployment, then so to is per capita demand in
East Eurasia, and recession and unemployment there is equally
1996 - Russia exports over one
barrels of oil a year, bringing in 20% of its foreign exchange
1996 - Cantarell flows are now producing 1.08 million barrels of crude
a day as the fields are pressurised.
1996 - the Straits of Hormuz in the Persian Gulf now see 15 million
barrels of oil a day tankered through them.
1996 - Venezuela signs a joint venture deal with USA's ARCO
to develop and upgrade about 200,000 barrels of very heavy (9°
API gravity) crude a day from the
270-billion barrel Orinoco Heavy Oil Belt. Once upgraded to
25° API it will be exported to USA refineries. A similar deal has
been signed with Conoco Oil.
1996 - USA - The national
average per-well production for natural gas wells is about 174 million
cubic feet of gas per day.
1997 - Over the last 7 years daily oil consumption has increased by an
additional 6.2 million barrels a day, mostly driven by new Asian
demand. OPEC increases its members quoatas to meet the increased demand.
1997 - Iraq - Looking ahead to when UN
sanctions are lifted,
of production the lowest in the world, rates of return of up to 20% are
available to favoured oil companies. No non-US or UK oil company
be allowed to fulfil it's
TotalFina Elf enters an agreement in principle with Iraq to develop the
Majnoun (containing "up to" 30 billion barrels of crude) and Bin Umar
- Russia's Lukoil signs a 23 year contract with Iraq
to jointly develop the West Qurna-2 oil field, and invests heavily in
- China's China National Oil signs a deal with Iraq to
jointly develop the huge North Rumailah field, near the Kuwaiti border
and the Halfayah field, which may yeild 300,000 barrels a day
- Italy's ENI
signs a deal to develop the large oil fields in the south, at Nasiriyah
- Malaysia and India also sign small development agreements.
- US oil
companies are not on
1997 - UK - continuing its long association with the oil industry,
British Petroleum Chief Executive David Simon is made 'lord' Simon of
Highbury, and takes a place as an unelected Parliamentarian in the
class-ridden British house of 'lords'. Simon is given the job of
Blair’s Minister for European Trade and
Competitiveness. In Blairs governemnt, at least 12 BP executives will
hold government positions or be appointed to government advisory
1997 - total 'North American' oil production (presumably USA and Canada
combined) peaks 
1997 - USA - The strategic Petroleum Reserve capacity remains at a
nominal 750 million barrels, as it has for the last 5 years. But the
reserve has never been filled to capacity, usually holding around 550
million barrels of crude.
1997 - Oman's Yibal field
peaks at 225,000 barrels a day. The field is intensively produced with
all the latest technology of the day to maximise production flow.
1997 - Qatar
inaugerates the world's largest liquefied
natural gas (LNG) exporting facility, with a total output capacity of 6
million tons of LNG a year. An associated new sea port will have a
capacity to handle 25-30 million tons of LNG a year. Qatar claims
natural gas reserves of about 237 trillion cubic feet.
Norway - the
Ormen Lange offshore field is discovered, containing an estimated 375
billion cubic metres of gas.
1997 - Nigeria - Shell oil experiences 210,000 barrels a day of
disrupted production at its Bonny terminal due to local protests.
1997 - Colombia - USA's Occidental Petroleum and Colombia's
Ecopetrol oil pipeline from the Cano Limon
field is repeatedly attacked by
dissendents, significantly disrupting oil exports.
1997 - (december) Slump in Thai Baht triggers Asian currency crisis and
Commencement of deregulation of USA electricity supply. Commencement of
wildly fluctuating prices in the energy daily 'spot market'.
Commencement of un-cordinated overbuilding of plant based on gas
1998 - Asian economic crisis sees
a reduction in demand in Asia coupled
increased OPEC production quota. Weak consumption/demand leads to
falling crude prices.
1998 - (december) The
OPEC meeting of the previous month fails to reach agreement to reduce
excess pumping. Oil again sells for 'give-away' prices of $US10 a
barrel, a 12 year low. Some crudes hit a price slump of $US8 a barrel.
1998 onward -
Dirt cheap oil and gas fuels an economic 'good times' boom in the
'developed' western countries. Natural gas sells for around $2 a
Gigajoule (around US0.08 cents a cubic metre), even in winter.
1998 onward -
major oil producers experience squeezed profit margins. Needed capital
intensive new refineries in USA and Europe are pushed off the drawing
board. Refineries provide less profit than pumping oil, and even
pumping oil out of the ground is not that profitable right now.
1998 - Russia is in trouble
at the new democracy falters in the face of
low oil revenue and the
cessation of international financial aid. Russia defaults on its debts
after continually rolling over
its (worthless) short term treasury notes finally fails. Unregulated
and highly indebted hedge funds betting on currency value movements
term capital "management") lose heavily,
the US Federal
Reserve (US taxpayers) then subsidise the financial 'geniuses'
stupidity by bailing them out.
1998 - Extremely low oil returns coupled causes the Saudi budget
deficit to reach 10% of GDP. Loans from the Gulf oil state of Abu Dhabi
cover the cash crisis. With no cash on hand to pay for 'make work'
schemes, unemployment rises to around 17% and 20% in those aged 20-29.
Disaffected youths become prime recruits for the violent factions
within Saudi Arabia's already extreme fundementalist version of Islam.
1998 - China - With its huge
internal economy under state control, subsidised industries continue to
burgeon, worsening the recurrent fuel shortages and requiring
increasing levels of imports.
China allocates 11 billion yuan (about $US1.31 billion) to the
countries largest (state owned) coal producer to research and develop
coal to liquids technology.
1998 - UK - Brent field starts its collapse. Decline rate doubles to an
astonishing 20%. Production is now about 11,000 barrels a day.
1999 - UK North Sea fields
reach overall peak of production at approximately 6 million barrels a
fields come into play, but nett of consumption there is an overall
loss). Effective zero production is likely some time around or after
1999 - India - Reliance Industries Ltd's Jamnagar refinery, with a capacity to refine 660,000
barrels of crude per day, commences exporting petroleum products.
1999 - UK is the world's 9th
largest oil producer. UK is an important nett oil exporter. A third
of the North Sea oil production is exported.
1999 - BP buys Amoco
oil for $US55 billion. BP would like to use AMOCO's sophisticated
imaging technology in the deeepwater Gulf of Mexico, where, to date,
its exploratory wells have been dry. Each well costs about 10 million
1999 - Canadian
Ladyfern gas deposit discovered in Northern British Columbia - the
largest natural gas discovery in North America. This deposit initially
thought to be large enough to meet 25% of Canada needs. It is produced
at a rate of 785 million cubic feet a day.
1999 - South Korea's Korea
Gas Corporation (KOGAS) takes delivery of its contracted 4.9 million
tonnes per annum of Qatari LNG.
1999 - (january) oil drops below $US10 a barrel. One estimate is that
in real terms, this is half the price that oil was in the 1950's. Pump
prices in USA are around 90 cents a gallon. Smaller oil companies fail.
Hundred of thousands of long-time experienced oil employees lose their
jobs. No one in their right mind signs up to work in explorations and
1999 - Saudi Arabia is now the single largest supplier of crude oil to
the USA. Saudi Arabia preferentially supplies the USA as the USA
guarentees the Saudi regimes safety from democracy. Oil sent to the USA
earns less due to distance than if the oil was sent to adjacent Asian
1999 - (february) US energy secretary persuades the Saudi
regime to restrict the output of oil in order to push up the price and
save the Russian economy. The US 'expects' oil to reach a more
realistic $US18 a barrel.
1999 - (march) Saudi
Arabia announces moves to cut its output from over 8 million barrels a
day to 7.4 million barrels a day, and OPEC
to cut output more than 2 million barrels a day
1999 - (may) oil prices recover steadily, now stand at $US18.
1999 - Saudi dictatorship panic
levels rise further as sharply
decreased oil revenue from the past few years impairs the ability to
pay for social benefits for the unemployed. The huge and youthful
population increase has been created out of years of oil plenty. The
current population is about 21.3 million, up by about 7 million people
from a decade ago, when the population was about 14.4 million.
1999 - (july) Oil
expert tells a British Parliamentary Committee that oil production has
peaked, that after many years of growth "we may then experience a new
downward trend", and that in his view it was absurd that "the depletion
world’s supply of its most important fuel should be left to a few
feudal families controlling the Middle East."
1999 - Dick Cheney, Chairman of
Halliburton oil services company, (and soon to be vice president of the
USA) notes the
finding enough oil to "offset our seventy one
million plus barrel a day of oil depletion, but also to meet new
demand". He bemoans the fact that nations and nation-owned oil
companies are in control of 90% of their own oil resources, rather than
USA and International private businesses owning it. He predicts "by
2010 we will need on the order of an
additional fifty million
barrels a day" above existing world oil
production. He notes, from an American oil business perspective, "the
Middle East with two thirds of the
world's oil and the lowest cost, is still where the prize ultimately
lies", but that while American private companies want access to oil
owned by nations of the Gulf, "progress" in gaining access is slow.
1999 - USA Central
Command has a plan to quickly invade and control Iraq.
"When I was commander of CENTCOM, we had a plan for an invasion of
and it had specific numbers in it. We wanted to go in there with
350,000 to 380,000 troops. You didn't need that many people to defeat
the Republican Guard, but you needed them for the aftermath. We knew
that we would find ourselves in a situation where we had completely
uprooted an authoritarian government and would need to freeze the
situation: retain control, retain order, provide security, seal the
borders to keep terrorists from coming in." - General Anthony Zinni
1999 - after 3 years of exploration and the expenditure of $US410
billion, oil companies around the world have found only enough oil to
keep their production static at 30 million barrels a day. While
declining production from existing wells is compensated for by the new
wells, not enough is found to meet rising demand.
1999 - Following the election
landslide victory for Hugo Chavez in 1998 Venezuela adopts a new
Constitution banning further foreign investment
in the oil sector, in order to prevent oil profits enriching already
wealthy foreigners when Venezuela is wracked with poverty - according
to government figures, about 12% of people live in "extreme poverty",
25% in "poverty". The democratically elected government has a
social deficit from years of corruption, breath-taking International
Monetary Fund 'debt for oil' loans, dictatorship, and sequestration of
national wealth by the 'self-privileged' few. This minority of mostly
white people with racist attitudes live in luxurious 'gated
communities' isolated from the rest of the impoverished population,
regard the wealth of the nation as 'belonging' only to them. This small
group has controlled the oil profits for their exclusive benefit more
than a century. Venezuelas birth rate
means it will be constantly
playing catch-up even to stand still; a situation analogous to the
exploding populations of the Middle East. Venezuela's economy and
social well-being is utterly
oil-dependant. 70% of Venezuelan exports
are oil; 60% of government tax revenue is from oil.
The major oil
currently in Venezuela are foreign
and West Eurasian - ChevronTexaco, Royal Dutch Shell, ExxonMobil, and
Petroleum. Venezuela has estimated
reserves of 78 billion barrels of crude, and 1.2 trillion barrels of
'unconventional' super-heavy crude. Venezuela is relatively close to
the USA, supplies 10% of USA domestic oil, and therefore likely to be a
installation of a puppet
under USA control.
1999 - First substantial
revenue from Sudanese oil fields. Revenues reach $500 million. 80% of
the money is used by the repressive Sudanese government to buy
predominantly Chinese armaments, and build armaments factories to kill
1999 - OPEC continues to try to reduce supply to meet slower demand.
Prices start to regain from a 30 year low (inflation adjusted to year
2000 prices) of about $US10.
1999 - (september) - Iraq reduces exports by 1.2 million barrels per
day in order to restrict supply and further drive up oil prices, which
quickly reach $US22.
1999 - (november) Iraq suspends
UN sanctioned oil-for-food sales.
1999 - USA and the IMF discover
there is a willing market for 'unused' central bank gold reserves when
some stocks are offered at auction. Both banks are unnerved by the vote
of confidence in gold versus the US dollar, in spite of moves to hold
gold prices artifically low.
Washington Agreement signed with 15 central banks - "Gold remains
an important element of Monetary Reserves" and banks will not sell more
than 400 tonnes of their gold reserves in any one year for the next 5
1999-2000 - (december- January) increased world oil
demand growth coupled with OPEC and Iraqi pumping cut backs causes
rapid rise in oil price.
2000 - (february) oil prices reach $30 a barrel.
(jan-feb) - USA shortage of heating oil in Northeast USA as very cold
winter conditions increase fuel oil demand and hamper deliveries.
2000 - (march) Traders betting on future price oil price spike crude
above $US30 per barrel.
2000 - Iraq resumes selling oil for food at the new higher price, and
increases its smuggling of oil, mainly to Turkey.
2000 - Iraq
takes payment for part of its oil in Euros, setting a
precedent for other Middle East nations, and removing some of the value
of the US petro-dollar. This move shakes USA's
administrative/business/military complex deeply.
2000 - Two US professors at the University of Houston (and energy
advisors to corporate America) state oil supply cuts could be used to
damage the American economy, and that nothing short of a 'military
response' could counteract a reduction
in oil production by Saddam Hussein. They make no mention of Saudi
reductions in supply.
2000 - (march) US administration does an 'about face' and threatens
Saudi Arabia and OPEC that if they don't increase
oil production to bring down the price, the US will dump it's strategic
oil reserve on the world markets to flood them with oversupply and
drive down the price.
2000 - Most OPEC suppliers - except for Saudi Arabia - are now pumping
at full capacity to meet global demand.
2000- The world's oil tanker fleet is now operating at 97% of capacity
- the first time since 1973.
- global production of light sweet crude peaks, as predicted by Hubbard
(the prediction was in effect for light crude as it was based on the
production curve for West Texas sweet). From now forward, the amount of
easily refined crude
will fall year on year. Most light crude comes
from OPEC countries. Saudi Arabia's Ghawar,
Abqaiq and Berri fields supply almost
all of the Saudi light crude supply. Non - OPEC countries have
relatively small amounts of light crude, and it is this that has been
in demand, and has been produced first. The world must increasingly
turn to those refineries
able to handle 'heavy' and 'sour' sulphurous oils.
2000 - USA and
European oil refineries are operating at, or near, full
2000 - USA oil stocks are at their lowest levels for 24 years as
increased consumption keeps levels low.
2000 - USA now consumes 8.3
million barrels of crude in producing its petrol supply (43% of all
crude is used to make petrol).
2000 - (march) OPEC (i.e. Saudi Arabia) agrees to pump more oil. But
increased demand, eroding global pumping capacity, huge social debt in
Saudi Arabia and Venezuela, speculation by the futures traders, and
diminishing oil refinery capacity work together to hold prices. Saudi Arabia
produces about a third (7.4 million barrels a day) of OPEC's output,
and is the only OPEC nation
with significant spare production capacity (around 2 million barrels a
2000 - (July) The Financial Times notes that "troubling trends" are
in "a commodity market where knowledge of true supply/demand balances
is sketchy if not deliberately obscured by participants".
- (July 10th) USA president Clinton orders the Department of Energy
to establish 'the Northeast Heating Oil Reserve'. This 2 million barrel
reserve is intended to provide a ten day 'cushion' in the event of
winters causing an unmet demand due to Atlantic refineries not
being able to produce enough. It takes ten days to bring ships (usually
1 million barrel class tankers) from the Gulf of Mexico refineries to
2000 - By the end of the year oil is back at its historic value of
about $US30 a barrel (when inflation adjusted to year 2000 dollars).
magnitude of price increase has not the slightest effect in stopping or
even slowing demand growth. Gold
re-links to the price of oil, albeit lagging in the relationship
relative to previous history. OPEC members all strongly support the
current pricing. The President of OPEC, Hugo Chavez, observes "We
understand that they [consumers] start to feel uneasy
when crude prices reach $30 a barrel, but they can imagine how it must
have been for us when it fell to $8".
2000 - Prices spikes to $35, prompting some West Eurasian consumers to
protest at the consumption tax on petrol - around 60-80%.
2000 - Eurozone governments ask OPEC to insist on a price lower than
the market will freely pay. They argue oil costs Saudi Arabia $2.50 a
barrel to pump from the ground (Dubai $6) so there is room to
artificially accept a lower than market price. OPEC producers note that
they take only 16% of the
gas station pump price charged to the consuming public. Eurozone and
other Western governments (except USA) take 60% - 80% of the sale price
of petrol in tax, thus helpfully (for those governments) obscuring the
real taxation rate its citizens must pay.
2000 - (august) USA -
'Sports Utility Vehicles' (SUVs) and other light trucks now comprise
almost 50 percent of
the new vehicles sold in USA. SUVs are not
required under Corporate Average Fuel Economy (CAFE) standards
introduced in 1975 to achieve good fuel economy (SUVs and light trucks
only have to 'achieve' 20.7 miles per gallon), unlike cars (which have
to achieve a pathetic 27 miles per gallon), so gas-gulping monsters
continued to be churned out by the American auto industry.
2000 - Russia has
greatly increased oil production from its mature Siberian fields
to ovecome its financial
problems, and is
now meeting a very significant portion of new demand, due in part to
greatly increased Chinese demand.
2000 - Asia-Pacific oil producers oil production peaks 
2000 - the Masjed
Soleiman field in Iran has still only produced 1.2 billion barrels.
2000 - global
consumption is about
68.4 million barrels crude a day - 2.4 million barrels a day higher
than earlier expected.
2000 (september) Financial analysts are unaware of the increase in
demand for oil and the proximity to supply limits to pumping and to
refining what is pumped - "The oil
price has gone from $10 to $35 a barrel yet production has only altered
by around 3%, the market is not functioning
properly..." Production has only increased by 3% because that is close
to all it is physically able to increase by. Demand is there. Supply is
uncertain at the margin. The market is functioning perfectly well.
2000 (september) Financial
commentators speculate that crude
prices could be driven up "above $US35", even as high as $US40 for a
period, and that this would be an 'oil shock'. Pump prices in USA are
around $US1.60 per gallon.
2000 - (september
5th) UK truckers block the channel tunnel in response to additional
duty (tax) on already high diesel prices. They follow by blocking the
UK's largest oil terminal and almost all the UK oil refineries. Panic
petrol buying breaks out. Huge queues form at gas stations, and over
half the forecourts run out of supplies. Some public transport services
are reduced, and some critical supplies critical health sector supplies
such as oxygen almost run out. The blockade ends within a week when
proposed fuel duty increases are postponed. The
estimated cost is nearly £1 billion. The lesson is that
most industries, food distribution, and health services will run out of
supplies within two weeks of a sudden and near-total switching off of
petrol and diesel supplies. Coal, gas, and nuclear powered stations are
relatively impervious, leaving around 70% of the generation capacity
2000 - (september) USA tries to pressure the Saudi regime into pumping
more of its excess capacity to bring down oil prices. Saudi Arabia
refuses, noting that there is now a consensus in OPEC not to oversupply
oil. In fact, only Saudi Arabia could in theory over-pump.
2000 - (september)
USA a scorching summer cranked up demand for
electricity as new high tech industries such as web server farms demand
extra electricity supply. Low investment in gas exploration in the late
1990's due to low gas prices means there is a supply shortfall to
generate electricity. The de-regulated
electricity market means those
building gas powered power plants have no idea how much competing
demand for natural gas there is. Plants are built with no assured
supply. Californian utilities are forced to cut power to some
companies, colleges and office buildings. Winter power prices are
expected to double.
(september) USA is faced with high prices for winter heating fuel -
expected to cost 30% more - at the same time as a shortfall in natural
gas supply for electricity. There is "near panic" in some US states. A
wood-stove buying frenzy is sparked in the wooded north-eastern states,
where over a third of homes rely on heating oil for winter warmth. Home
owners stockpile barrels of heating oil to beat the rises ahead of
winter peak demand. Californians buy diesel and petrol powered portable
electricity generators. President Clinton orders the release of 30
million barrels of oil from the 571 million barrel US strategic reserve
in order to bring
down the price. It was intended to yeild an additional 3 to 5 million
barrels of heating oil, but as USA
refineries have almost no spare capacity to increase production, it
was largely symbolic. This is the first time the strategic reserve
been used for domestic economic purposes rather than military purposes.
2000 - (september) In response to intense pressure from USA, the Saudi
regime finally agrees to increase production by 800,000 barrels a day.
500,000 barrels a day is probably a return to previous pumping levels.
Only 300,000 barrels a day is available to meet the growth in demand.
- (october) Following the terrorist attacks on the USS Cole in
Yemen, the commander in chief of the US Central command testifies in
Congressional committee his command's mission is to "deter aggression
and stand ready to respond to attacks on our forces, our allies, our
interests...to ensure uninterrupted
access to regional resources and markets...(and) to counter
proliferation of weapons of mass destruction and other transnational
threats....The region is historically unstable,
yet remains vital to U.S. national interests. It contains vast energy resources,
key air and sea lines of
communication, and critical maritime choke points. Economic and political disruptions in our AOR have profound global consequences."
2000 - (0ctober) Iraq
convinces the United Nations it should be allowed
to sell its oil for euros, not dollars, to come into effect November 6.
2000 - (october) Iraq converts its $10 billion "oil for food" reserve
dollars to euros. Oil backs the USA dollar, as it is worthless without
it. Converting to the euro, a fiscally sound currency, would erode the
US governments ability to sell US treasury junk bonds in exchange for
'petrodollars'. Treasury junk bonds fund the large USA internal and
2000 - High US treasury interest rates (6%) due to suspicion the US
dollar may no longer be fully backed by oil, making bond purchases less
attractive and other currencies more attractive. US stock market
2000 - Central banks respond to lack of confidence in the dollar by
driving down their interest rates on bonds. This allows the USA fed to
print and successfully sell more bonds. Central bank USA dollar
reserves retain their value, and allows USA to import oil at a lower
price than would otherwise have been the case, subsidising USA drivers.
2000 - November - Russia's
Lukoil buys Getty Petroleum and its
1,300 gasoline service stations.
2000 - the U.S. Geological Survey estimate world oil reserves at nearly
416 billion tonnes. Oil industry sources estimate it at about 140
2000 - USA domestic and cargo airlines now consume 20.3 billion gallons
of jet fuel a year .
2001 - Norways giant fields peak at 3.2 million barrels of crude and
condensate a day.
2001 - India's Bombay
High North and South oil fields, providing over 30% of Indias
domestically produced oil, have been declining for some years.
Production has dropped from 20 million tonnes to 12 million tonnes a
year. A programme to "redevelop' them, probably by pressurisation, now
2001 - Russia once
highly productive giant Samotlor oil field now produces only about
0.25 million barrels of oil a day. This giant field collapsed from peak
in only about 20 years, and its decline was precipitous. It is a
warning of what is likely to happen in Mexico and Saudi Arabia.
2001 - London's
International Petroleum Exchange (IPE) is bought by a consortium of oil
companies and financiers that includes BP, Goldman Sachs and Morgan
Stanley. Money is made by predicting movements in oil prices and
exchanging contracts for future delivery. Volitility and flux is a
money earning asset for the exchange. Volatility and flux drive the
ability to profit, with knowledge of the economy, and access to expert
analysis from within the oil industry being key factors.
2001 - USA authorities forecast
abundant future supplies of North American
natural gas, meaning prices would not rise.
2001 - USA - California.
Power crisis, with some 'brown outs'. Major
energy companies accelerate the building of gas powered - electricity
2001 - North American
spike high over winter - increasing by nearly 300% in 6 months due to
Gas prices peak at over $US12
a Gigajoule (about US.50 cents per cubic metre) Gas industry puts
over 1,000 gas rigs to work
with 700 in 2000). Gas production increases by about
2001 - USA
strategy to isolate Russia by actively engaging with and bringing
former Russian colonies such as Poland and other Baltic Sea nations
into NATO (in spite of Russia's alarm at its perceived 'encirclement'
by USA forces) means that Russia's existing crude oil transit pipelines
through Poland, Latvia, and Lithuania to its West European markets (and
beyond) may fall effectively under USA-NATO control. In response,
Russia's President Putin initiates a plan to build a new pipeline from
Siberian and Timan-Pechora oil provinces to the port of Primorsk on the
Russian shores of the Gulf of Finland. It is to be known as the Baltic
Pipeline System (BPS), and is expected to carry 1.3 million barrels of
oil a day. The projected cost is $US2.2 billion.
2001 - The
Caspian Pipeline Consortium (CPC) is completed. This $US2.6
billion crude oil pipeline pipeline runs for 935 miles, from the
oil field in Kazakhstan to the Black Sea port of
Novorossiysk in Russia. The initial capacity of 500,000 barrels
day is expected to expand to around 1.4 million barrels per day by
2001 - American
president installed allied to the oil industry.
According to a 2005 BBC report, "planning began "within
weeks" of Bush's first taking office in 2001" to install a puppet
regime in Iraq via an American organised coup d'etat, and thus control
Iraqs estimated 112 billion barrel oil reserves, the second largest
-(february) - several weeks after Bush jr. becomes president of USA, an
'energy task force' headed by (oil-industry participant) vice-president
Cheney is convened. Few details have been forced from the US Govt (via
the Freedom of Information Legislation), but according to one
"… a map of Iraq and an accompanying list
of "Iraq oil foreign suitors"
were the center of discussion. The map erased all features of the
country save the location of its main oil deposits, divided into nine
exploration blocks. The accompanying list of suitors revealed that
dozens of companies from 30 countries - but not the United States -
were either in discussions over or in direct negotiations for rights to
some of the best remaining oilfields on earth."
- Mark Levine, in The Nation.
The National Security Council directed staff to "cooperate fully
with the Energy Task Force as it
considered melding two seemingly unrelated areas of policy..." and join
"the review of
operational policies towards rogue states such as Iraq and actions
regarding the capture of new and existing oil and gas fields."
The State Department had already created
the "Future of Iraq Project," an "Oil and Energy Working Group" whose
members were, according to The
Financial Times, "Iraqi oil experts, international consultants"
and State Department
staff ( names were classified as a state secret). According to the book
Agenda' by Antonia
Juhasz one member
would later serve as Iraq's
oil minister. The working group stated that Iraq's oil "should be
opened to international oil companies as quickly as possible after the
2001 - (april) - the Bush cabinet
claims "Iraq remains a destabilising influence to
the flow of oil to international markets from the Middle East" and
is necessary" and labels this an 'unacceptable
risk' to USA interests.
2001 - (may) Dick
Cheney, now the vice president of America, tells the
American president Bush via the 'National Energy Policy Report' that
"By 2020, Gulf oil producers are projected to supply between 54 and 67
percent of the world’s oil”.
- (may 17) The National Energy Policy Report, long on rhetoric about
reducing demand for oil by promoting innovation and technology to make
USA the world leader in efficiency and conservation, is actually
intended as a deliberate
In fact, it appears to be the "mother of all
Toward the end of the report,
the true policy is hinted at
- a chart of net US oil consumption and production over time reveals US
domestic production will decline from around 8.8 million barrels a day
in 2002 to 7 million barrels a day in 2020. Demand in 2020 is expected
to be 6.5 million barrels a day greater than 2002 levels, reaching 25.5
million barrels a day. Thus, of the 25.5
million barrels a day USA expects to consume, 18.5 million barrels a
day will need to be
imports from other
- Its hydrogen and biodiesel 'solutions' are
unsustainable. Even a schoolchild could see the flaws.
- No genuine
effort to conserve or become fuel efficient is proposed.
- No reduction
in oil consumption at all is proposed.
Instead of discussing how to reduce this
increased demand, it discusses 'removing' political, logistical, and
legal obstacles to 'obtaining' it from oil rich regions and specified
In other words, this policy is short-term
'me-generation' expediency in face
of a crisis whose dimensions are known.
2001 - uranium 'yellowcake'
hits an historic low price of $US7 per pound on the spot market.
- It is an impotent policy.
- It is
an intellectually bankrupt policy.
- It the childish self-delusional
policy of the addict
living in a fantasy world of 'cheap energy forever'.
- It is a policy of
those in frightened of the reality of the impending consequences of
what they have failed to do.
2001 - USA, summer. Natural gas prices drop back nearly 300% to the
normal trend line after winters demand spike.
2001 - USA backed big business
in Venezuela uses the right-dominated Petroleum Workers Union to
organize a general strike.
2001 - the highly nitrogen-gas
pressurised declining Cantarell field in
Mexico now produces 2.1 million barrels a day - nearly twice the flow
rate achieved at the 'natural' peak
of production for the field.
2001 - Iran signs a
25-year deal with the USA's ally Turkey to supply 4 billion
cubic metres of natural gas, making Iran the second biggest supplier to
Turkey after Russia.
2001 - (july) - Russia - Azerbaijan - Iran - UK - Azerbaijan joins
agreements with Russia and Kazakhstan that the seabed only of the
Caspian sea be assigned territorial rights to bordering states.
Azerbaijan needs access to Russias pipelines to export oil and gas.
Azerbaijan sends oil exploration vessels to explore the Araz-Alov-Sharg
oilfields in these waters knowing the territorial boundaries are
vigorously disputed by Iran. Iran threatens them with a warship and
fighter planes and masses troops on the land border with Azerbaijan.
The exploration was commissioned by British Petroleum.
The Caspian Sea
is bordered by Russia, Kazakhstan,
Azerbaijan, Iran, and Turkmenistan. Prior to the break-up of the Soviet
Union, Russia and Iran split
control of the Caspian between them. After the USSR breakup in 1998, in
spite of agreements with the new states that Soviet divisions of the
Caspian would remain in force, Russia and Kazakhstan agreed to divide
portion of the seabed only between them, and leave the issue of sea
surface control unresolved.
Iran and Turkmenistan wanted "condominium"
use of the sea or, alternatively,
division of the Caspian into five equal sectors (not based on a
countries abutting shore length). The Caspian is supposed to hold
reserves of between 17 and 33
billion barrels of oil, and maybe 300 trillion or so cubic feet of
Most of the reserves are offshore, but closest to
the new post-Soviet states of Kazakhstan (which has the Tengiz and
Kashagan fields) and Azerbaijan (which has the Baku
Fields). Azerbaijan and
Turkmenistan continue to contest ownership of the Chirag
and Azeri oilfields.
2001 - Turkey on-sells part of its Iranian gas to USA's dependent 'oil
and gasless arab state' - Israel.
2001 - Ford Motor Company introduces a car, the P2000, with a hydrogen
internal combustion engine saying it "could help bridge the gap between
gasoline vehicles and the fuel cell vehicles of the future." Engine
efficiency is about the same as a diesel, but the range is only 62
miles. Liquified natural gas or compressed natural gas gives much
better range, and is a mature technology. Hydrogen gas must be 'made'
by decomposing these gases, or by using electricity from a coal or gas
fired power station (or nuclear station) to decompose water into
hydrogen and oxygen. The idea a hydrogen powered vehicle could ever be
widely and popularly available as a 'substitute' for mined gas shows no
understanding that there are no 'reserves' of hydrogen to be 'mined';
hydrogen can be brought into existance only through burning fossil
fuels or uranium.
2001 - September 11 - Saudi Arabian
terrorists murder over 3,700
Americans in New York, setting the stage for America to invade Saudi Arabia
kill an estimated 20,000 Iraqis.
2001 - (november) a paper published by eminent geologist Kenneth
Deffeyes of the prestigous Princeton University says "The biggest
single question is the year when world oil production
reaches a Hubbert
peak and then declines forever. Both the graphical and the computer
fits identify 2004 as the probable year. The largest single uncertainty
is the enormous reserves of Saudi Arabia."
2001 - USA - USA natural
gas production peaks at 19.6 trillion cubic feet per year.
2002 - USA White
House spokesperson Ari Fleischer “The only interest
the United States has in the region is furthering the cause of peace
and stability, not in
[Iraq’s] ability to generate oil...” If you are going to tell a lie, tell a big
2002 - USA
sponsored opposition attempt to violently overthrow the
democratically elected government of Venezuela. Terrorists controlling
the countries wealth form an 'axis of evil' with military
generals to kidnap the popularly elected president. The terrorist
leader, Pedro Carmona Estranga, head of the Venuzuelan federation of
business, dissolves the constitution, dissolves the Supreme Court,
dissolves the democratically elected national assembly. A massive
uprising of over a million people takes to the streets, with support
from the lower rank of the military, stops the terrorists and restores
the popularly elected president. Astonishingly, the terrorists are not
tried for treason, or homeland crimes, but are allowed to go free.
2002 - “Senior Defense
official” - possibly Deputy Defense Secretary Wolfowitz - Pentagon
leadership reveals in a Pentagon briefing paper that the Pentagon “have
crafted strategies that will allow us to secure and protect those
[Iraqi oil and gas] fields as rapidly as possible in order to preserve
those prior to destruction.”
2002 - ExxonMobil
semi-publicly admits world oil will peak before 2010
- Harry J. Longwell, director and executive Vice-President of
ExxonMobil “The catch is that while demand increases, existing
production declines. To put a number on it, we expect that by 2010
about half the daily volume needed to meet projected demand is not on
production today – and that’s the challenge facing producers.” (World
Energy, Vol 5 No 3, 2002).
2002 - a report
from the Colorado School of Mines, titled 'The World's Giant
Oilfields,' notes that nearly 50% of the world's crude oil supply come
from the 120 largest fields in the world. The 14 'largest of the large'
supply over 20%, and these 14 have an average age of nearly 44 years.
The conclusion is that there are no more super giant fields in the
world to be found.
2002 - USA gas production falls
back to 2001 levels.
2002 - USA oil field service and drilling costs are now $1,057,510 per well (expressed
in 2005 dollars). This reflects more geologically 'extreme' drilling
conditions, where drilling would never in the past have been viable.
2002 - 2003 Oman's (Middle East) oil field drop production
significantly as fields age
2002 - Columbian Cruz Beana oil fields production drops from previous levels to
200,000 barrels a day
2002 - Latin American oil production might have peaked, but still
a little too close to call 
(november) USA invades Afghanistan and installs 'the pipeline
president'. USA wants to access all Central Asian former Soviet State
gas and oil and send it south to Pakistan. The Pakistani president is
suitably grateful. This means a pipeline has to cross Afghanistan -
impossible while the Taleban and the Saudi terrorists control the
2002 - Commencement of the Baku-Tbilisi-Ceyhan
(BTC) pipeline to bring oil from the Caspian Sea to the Mediterranean
2002 - (december) The Caspian sea area, previously touted as "a new
Saudi Arabia" has drilling results in that show not the expected 200
billion barrels, but about 39 billion barrels, much of it lower quality
2002 - This years USA additional
government debt is $US158 billion,
most of which will be funded by issuing more treasury bonds.
2002- Saudi Arabia, Bahrain,
Kuwait, Qatar, Oman and the United Arab
Emirates peg their currencies to the US dollar to benefit by its
strength. Almost 85% of the excess income of oil-producing
Persian Gulf countries is invested overseas in US dollar-linked
2002 - Volkswagen
announces a project to develop a
super-economy car that can travel 100 kilometers on 1 litre of fuel.
It is called the “1-liter” car. The prototype, a lightweight single
cylinder diesel capable of 120 kph (75 mph) does even better, 0.890
litres to the 100 kms (264 miles per gallon).
2002 - 1.2 million new cars were
purchased in China this year.
2002 - China's national oil company buys an oil field in Indonesia from
Spain's Repsol YPF SA and becomes the largest offshore oil producer in
2002 - The
price differential between the more difficult and expensive to refine
'heavier' (more viscous) oils and 'sour' (higher sulfur content) crudes
and the easily refinable 'light' 'sweet' (low sulfur) crudes is about
$2 a barrel for the entire year. There is relatively little change in
the differential in the US refinery 'stock up' period prior to the
summer driving season in USA.
2002 - USA - Roughly
17,000 new natural gas wells were drilled this year.
2002 - Canada - About
9,000 new natural gas wells were drilled this year.
2002 - USA now imports 13% oil
supply from Africa.
2002-2003 - USA winter
demand over this period draws gas reserves
dangerously low (40% below normal by the end of winter). Reserves were
low because increased demand required increased storage in the 'off
season' but pumping capacity was
insufficient due to decreased supply.
Spot market prices created 'spikes' as high as US$30 per
million cubic feet ($US10.00 per Million British
Thermal Units ), in equivalent energy terms, about $US9 a gallon for
gas. Natural gas is also the primary feedstock to be decomposed into
the risible USA 'hydrogen
2003 - (january) -
USA - demand for heating oil in the Northeast surges due to record cold
temperatures in some regions. Consumption reaches 4.9 million barrels a
day in the last week of january - a record high. Some regions
experience a plunge in inventories of more than 30%, making supplies in
some areas short. Concerns are raised that if the cold weather is
prolonged, the emergency fuel oil reserve may need to be released. $200
million in emergency funds are released to states, most of which is
used to subsidise heating fuel for low income households. Requests for
heating assistance are up from 20% to 50% as the proportion of the USA
population who are on low incomes or are impoverished increases year on
2003 (February 7) USA commercial crude oil stocks fall to about 270
million barrels (week ending February 7), the lowest crude oil stock
level since 1975.
2003 - In the UK the
number of petrol
stations also equipped with LPG (liquified petroleum gas) reaches
1,200 - nearly twice the number of suppliers that existed in
2001. Government tax on LPG is considerably lower than petrol, and
subsidises the cost of installation of dual fuel systems in new cars
(and in some used cars, albeit at a lesser rate) at around
£1,000. Savings on petrol pay for the buyers share of the
installation within about 20,000 miles.
2003 - The
number of motor vehicles in the UK is now 31.2
27.7 million of these are private autos and light goods vehicles such
as utes and vans.
Road transport accounts for about 75% of all oil used in the UK.
2003 - UK now
consumes 42 million tonnes of oil per year in road transport (private
2003 - UK now consumes 0.3 million tonnes of oil per year in rail
transport (passenger and freight)
2003 - China's oil resource probably peaked (as assessed from
Uppsala Hydrocarbon Depletion Study Group model). Remaining reserves
estimated at 25.7 billions barrels.
2003 - China's largest
oilfield at Daqing, produces 48.3
million tonnes for the year. This is the first production drop (down
from about 50 million tonnes per year) in 27 years.
2003 - China relies on Iran for 14% of its oil needs.
2003 - China spends $US300 million doubling the capacity of the
Sudan-China oil refinery.
(January) - A speech
said to be by by China's Minister of Defense and vice-chairman of
China’s Central Military Commission, Chi Haotian is put onto the
internet under various titles, including “The War Is Approaching Us”,
“A recent speech from a high ranking official in
PLA”, “The War Is Approaching Us—Chi Haotian”, “China, Do You Still
Have Ten Years’ Peacetime?”. The speech says "...China needs to import
oil for its economic development, and to import
raw materials such as lumber, in order to protect its environment from
deforestation. This is very reasonable. But big powers have their own
“reasons,” and a country like China will need to consume 100 million
tons of oil in 2010, and 200 million tons in 2020. Will these big
powers tolerate this?...Only by being prepared for war can China win
space and time for her further development." Just what this "space"
might be was uncertain at the time of publication, but would be
is now clear to China is that China's oil imports will increase year on
year, driving up the cost of manufacture, putting China in the same
boat as the rest of the world.
2003 - the giant
Shaybah oilfield on the border of United Arab Emirates and Saudi Arabia
produced 1 billion barrels of crude (136 million tonnes).
2003 - Australias oil fields have peaked. Total production has fallen
from about 650,000 barrels a day to around 430,000 barrels a day.
2003 - Oman's Yibal field
production has in effect collapsed.
It now produces only about 80,000 barrels per day, losing well over
half its production in just 6 years.
2003 - Mexico's giant
Cantarell field has 53 additional wells sunk to try to maintain falling production
2003 - Indonesias
production slide continues. It now exports 100,000 barrels of crude a
2003 - (early) Japanese companies take a 20% stake in developing the
Iranian 1 billion barrel Soroush-Nowruz offshore
field in the Persian Gulf, and later sign contracts for natural gas and
gas liquids from it and other Iranian offshore fields.
USA national gas field production decline is estimated at roughly 3% a
2003 - UK North Sea fields
production drops by 8.5% as decline
fields come into play, but nett of consumption, there is an overall
2003 - Canadian Ladyfield gas deposit now producing at only
300 million cubic feet per day, and the decline rate continues to be
steep. Some charge the field has been overproduced, and should have
(january) US president Bush announces "Tonight I am proposing
$1.2 billion in research funding so that America can lead the world in
developing clean, hydrogen-powered automobiles." Either he had been
badly advised, or he is incredibly ignorant of the science and previous
to do it reasonably is not, and never will be, there. Technological
feasibility is a trivial side issue anyway - hydrogen must come from
coal; or from electricity. There are no 'hydrogen mines' available to
exploit; there is no cheap and abundant source of
hydrogen even if it were a practical option for automotive transport.
Which it isn't. Much of the funding will flow to Sandia Research
Labororatories, a Lockheed Martin subsidary long involved in contracts
for the business/military/presidential-administrative complex, a
complex extremely heavily 'influential' in USA.
2003 - (february) - Irans phases two and three of the South Pars
natural gas field come on-line. Together, they will produce an
additional 55 million cubic meters (1.9 trillion cubic feet) of natural
gas, and 1 million metric tons (11.6 million barrels) of liquefied
petroleum gas a year, as well as 85,000 barrels of condensate liquids a
2003 - (february) Angola's Kizomba B offshore development project
commences. The joint venture between the oil companies Exxon Mobil, BP,
Eni, and Statoil is expected to cost $US3 billion. Production of
250,000 barrels of crude oil a day, starting 2006, is expected. Total
recoverable reserves are estimated at around 1 billion barrels.
2003 - (march) Nigeria experiences
fighting between soldiers and militants of various ethnic groups and
factions in the Niger Delta. ChevronTexaco, Royal Dutch Shell, and
TotalFinaElf are forced to shut in operations in the area, resulting in
800,000 barrels a day being lost - about 40% of Nigeria's total
2003 - (april) Production in Nigeria returns to normal.
2003 - (april) Brazil's largest ever natural gas field is discovered
about 85 miles off the coast of Sao Paulo. It is estimated to have
reserves of about 2.47 trillion cubic feet of natural gas.
2003 - (january)
Iraqi oil production is about 2.8 million barrels a
day. Saddam Husseins regime uses 80% of oil revenue to pay for food,
20% (worth about $US3 billion) for the military, governance, and
over the last 12 years United
States has received about 37% of Iraq's oil, almost all of it via a
network of foreign intermediaries.
2003 - Report for the Italian Government recommends that if USA invades
Iraq Italy should make the oil field regions of Nasiriyah
and Halfaya secure to protect their 1997 oil deal, "a
deal worth 300 billion dollars".
2003 - (before April) According to reported information from a former
Energy and CIA oil analyst, a secret plan was
drafted by the American administration to the sell-off all Iraq's oil
fields after a planned invasion. Republican administration 'hires' are
said to have had the secret intention to destroy the power of the Opec
cartel by large
increases in oil production from the seized iraqi oil fields, busting
the Opec quota levels.
(January) "The pentagons darling" Ahmed Chalabi, having already met
with executives of three US oil multinationals, tells an American
newspaper that "American
companies will have a big shot at Iraqi oil". Not only does Iraq have
the second largest oil reserves in the world, Iraqi oil is also one of
the cheapest to produce in the world - some estimates are as low as 97
cents per barrel. North Sea oil cost around 3 to 4 dollars per barrel
to produce. Estimated annual production would be worth somewhere
between $US40 billion and $US80 billion per year (at 2003 oil prices).
The USA proposes a 'production share agreement' with US and UK
multinational oil companies, giving the multinationals heavily
discounted concessions to Iraqs oil.
2003 - (january) Unnamed 'sources' in the office of Vice president
Cheney claim some in the administration want to seize Iraqs oil as
"spoils of war". Others argue that the proceeds of oil sales should go
to pay the Americans for their costs incurred in invading and occupying
Iraq. Some argue that Iraqs money belongs to Iraq, and should be held
in trust to pay for repair to the damaged infrastructure and for normal
governance. The Congressional Budget Office estimates the cost of
occupation would be $12-48 billion per year, and occupation
need to last
until 2004 or 2005 before exiting, presumably
leaving a puppet administration in place that will deliver Iraqi oil to
USA and UK oil companies.
2003 - (march)
USA president uses authorities in his International Emergency Economic
Powers Act to confiscate the property of the Iraqi government under
U.S. jurisdiction and vest the assets in the U.S. Treasury.
2003 - (march) USA General Franks, well aware of the
1999 invasion plan and in concordance on the troop numbers required to
quickly restore order,
assist establishment of a democratic government and get out of Iraq (as
assessed in the 1999 plan) now refuses to supply General Eric Shinseki,
the USA army commander with the agreed number following discussion with
2003 - (march) USA Navy
SEALs seize the huge Basra off-shore oil
terminal, of pivotal importance for exporting crude out of Iraq, and
the smaller Khwar Al Amaya oil terminal. .
2003 - (april) USA
business/military complex attacks Iraq
pretext of the prescence of unspecified weapons of mass destruction.
All major government buildings are
attacked and either damaged or destroyed. The Iraqi Oil Ministry
building is the only building
left untouched. Only a little more than a third of the numbers of troops
required to quickly impose civil order are sent. The least prepared
units are sent, while the best prepared are held back. No plan or
mandate for regulating or restoring civil life is given to the troops.
Unsuprisingly, chaos results, with riots, theft, sabotage, burning of
buildings, further damage to infrastructure, and the coalescing of
previously minor insurrection groups.
The need for a US and UK long term military prescence in Iraq,
ostensably to 'maintain order', is achieved.
2003 - (march)
Lukoil declares it will sue any oil company developing Iraq's West
Qurna oil field for at least $20 billion in the
International Commercial and Industrial Arbitration Court. The case
could take up to
eight years, and all work by any party on the field would be stopped.
Lukoil threatens to have the court seize tankers of Iraqi crude to
recoup its $3.7 billion investment in West Qurna.
2003 - USA business/military complex achieves its objectives of
protecting and controlling the more southerly oilfields. Saudi Arabia
co-incidentally pumps at full capacity, something it has never done in
recent times. The price of
oil falls by $US10 for a few months.
2003 - (april) Iraq - civilian oil field engineers employed by
Houston-based KBR travel with the invading USA Army Corps of Engineers
to take the
southern Iraqi fields and immediately assess and repair the most
productive oil wells and the key oil pipelines, and collection and
2003 - Iraq - Prior to invasion, British Petroleum engineers in Kuwait,
and retired engineers from Royal Dutch Shell in England teach
troops of the 516 Specialist Team Royal Engineers how to run southern
Iraqs oil fields. Immediately post-invasion, a senior BP manager is
by the UK government to manage the rebuilding of Iraqi
- (may) - USA president George Bush signs executive order number 13303
stating "any attachment, judgment, decree,
lien, execution, garnishment, or other judicial process is prohibited,
and shall be deemed null and void", with respect to "all Iraqi
petroleum and petroleum products, and interests therein...that come
within the possession or control of United States
persons [corporations]." In effect, Iraqi oil is made a safe prospect
for any USA oil company, by presidential decree, and regardless of previous contracts
or work by others.
2003 - (may) Russia's Yukos oil company signs an agreement worth $US150
billion with China's China National Petroleum Company. CNPC will buy
5.13 billion barrels of oil between 2005 and 2030; the oil to be
delivered via a $2.5 billion pipeline from Russia's western Siberia
fields to China's Daqing oil field.
2003 (june) - Russia signs a
contract with Royal Dutch Shell and a
consortium of Russian and Japanese companies to build Russia's first
natural gas liquefaction facility in Sakhalin, on the Russian far
Eastern coast. Design capacity is to produce 9.6 million tonnes a year.
Tokyo Electric Power Company and Tokyo Gas sign an agreement to buy
nearly a quarter of the projected production.
2003 - (june) Australia and East Timor agree on the development of the
Bayu-Undan gas fields in the Timor Sea 'Joint Petroleum Development
Area'. ConocoPhillips announces it will go ahead with its $1.5 billion
liquefied natural gas liquefaction plant in Australia's Northern
2003 - (June) - Chevron oil company
is awarded the right to buy an
initial shipment of 8 million barrels of oil from Southern Iraqi
fields, and thereafter 2 million barrels a month until december.
2003 - (July) - BP oil company is
awarded the right to buy an initial
shipment of 8 million barrels of oil from Southern Iraqi fields, and
thereafter 2 million barrels a month until december.
2003 - (July) - Shell oil company is awarded the right to buy 2
million barrels of oil a month until december.
- (July) Quote of the month by Paul Wolfowitz, USA Deputy
Defence Secretary, in an interview in the July 2003 issue of magazine
"For bureaucratic reasons we settled on one
issue, weapons of mass destruction, because it was the one reason
everyone could agree on."
2003 - Saudi Arabia arranges an extra 800,000 barrels of oil for world
markets. Some or all of this may be from its tank farm reserves around
the world, perhaps disguising less spare capacity than the world thinks
2003 - Post invasion, commentators speculate Iraqs oil reserves are 200
billion barrels, and will bring an era of 'cheap oil' once again.
2003 - Italian Government sends in troops for "humanitarian" purposes.
Italian troops guard
a refinery and oil pipeline in Nasiriyah. 19 Italian soldiers die when a suicide
bomber attacks the Italian base at Nasiriyah.
2003 - The USA invading force's self-appointed administration, the
'Coalition Provisional Authority', nullifys all
Iraq's existing oil lease contracts with any Eurasian country signed in
the period 1997-2002 . The contracts were worth about $US1.1 trillion.
2003 - Rumors that the USA controlled puppet governing council intended
to privatise Iraqi oil encourages insurgent attacks on oil
infrastructure, presumably on the premise the invaders should be denied
the "prize" so deeply coverted by Dick
Cheney in 1999. Production of Iraqi oil does not meet
expectations due to insecurity and sabotage, especially in the
vunerable northern pipelines. The price of oil starts to climb again.
2003 - USA president
uses authorities in his International Emergency Economic Powers Act to
confiscate the assets of the deposed Iraqi government and vest the
assets in the U.S. Treasury. Combined with the Iraqi assets seized in USA,
this amounts to $US2.65 billion dollars. This Iraqi money is spent on
the invading forces 'costs of occupation', mostly in administration and
'buying off' local resistance.
2003 (may) - Former CEO of Shell Oil USA takes control of
Iraq's oil production for the US Government. He delays and obstructs
the USA administration scheme to sell off Iraqi oil fields and oil
infrastructure to private companies of the invading nation.
2003 (may) -
United States, as the occupying power, "facilitates" and oversees the
delivery, and distribution of gasoline, liquefied petroleum
gas, kerosene, and diesel throughout
Iraq. The USA occupying army uses $US2.3 billion of Iraqi money from
the DFI not only to buy these products from 'overseas', but to pay for
delivery. Army convoy tankers and guarding personnel are paid from this
Iraqi fund. With most of Iraq's electricity infrastructure and some
refineries damaged, the demand for these fuels for cooking, heating, personal
transportation, and private power generation rises. Iraq’s operative
refining capacity, already limited, cannot now cope.
2003 - Iran
continues to invoice its oil sold in the Asian region in US dollars,
but prefers payment in euros or alternative regional currencies. Most
Iranian oil sales to europe are already in euros. 30% of Irans oil goes
to European markets. Many of Irans imports come from Europe. If Iran
had not switched to the euro, it would have experienced significant
losses through having to pay for European imports with the depreciating
USA dollar. As a result of European trade, 60% of Iran's foreign
reserves are now held in Euros.
2003 - Strong Euro, 13% above the dollar, OECD interest rates hit a 50
2003 (june) - export of Iraqi oil re-commences. Iraqi oil is once more
sold in US dollars, not Euros.
Large amounts of 'Iraqi' revenue foregone as a result.
2003 - Dollar
strengthens once more, treasury interest rates on bonds
cut, Asian purchase of the bonds continues, USA banks with petrodollars
recycling from the Middle East re-lend with few credit worthy
requirements for housing and lifestyle, fueling the property bubble and
fueling private debt, including purchase of gas guzzling SUV's.
Conditions for the costs of the USA invasion to be met by USA printing
money are ideal and unrestrained.
2003 - Strong resentment by Arab feudal chiefs and dictators at US
seizing of Iraqi oil leads to Saudi Prince visiting Russia and the
Saudi regime discussing closer cooperation with Lukoil and other
Russian companies. OPEC countries reportedly are privately much more
predisposed to sell oil in Euros, but are presumably too afraid of
America to say so publicly.
2003 - (july) - Chad commences pumping crude oil for the first time.
The oil takes several weeks to travel through a 650-mile pipeline
through adjacent Cameroon to the Atlantic coast. Production is expected
to eventually reach 225,000 barrels a day.
2003 - (july) Israel commences operation of its 1.2 million barrel a
day capacity, bidirectional Eilat-Ashkelon pipeline. The pipeline links
the Mediterranean with the Red Sea, by-passing the Egypts Suez canal.
Initial capacity is 400,000 barrels a day. Both these Israeli
ports can handle 'very large crude carriers' (VLCCs), but the Suez
2003 - (july) Offshore drilling begins at Sakhalin
2003 - (july) - USA - Hurricane Claudette shuts in about 18% of the
Gulf of Mexico's total gas production and about 21% of the GoM's oil
production. Production is restored within a few days after the storm.
2003 - (july 25) - USA re-opens
the Maryland Cove Point LNG regasification plant. The first tanker
unloads 22 million gallons of LNG from Trinidad. The plant will
eventually be able to supply 1 billion cubic feet of natural gas a day.
At that point it will be the largest LNG regasification facility in the
2003 - ExxonMobils revenue for the year is $US247 billion - an
greater than the annual income of all but 6 countries in the world
(USA, Japan, Germany, UK, France, and Italy). ExxonMobil also has the
highest profit of any company on the surface of the planet.
2003 - This years USA additional
government debt is $US375
billion, most of which will be funded by issuing more treasury
2003 - USA - at the
year-end winter heating season, fuel oil sells for about $US1.28 a
2003 - USA is now burning almost 9
million barrels of oil a day in motor vehicles.
2003 - US refineries
are operating at 93% - 95% percent of
capacity, which given downtime for
essential maintenance, is in reality full
2003 - 40% of new passenger
cars in Europe are now
powered by diesel.
2003 - global diesel supplies
expected to grow by 3% next year.
(august) - Saudi Arabia's light and medium grade crudes sell for only
US40 cents a barrel more than its heavy and sour grades.
2003 - (august) USA -
largest power blackout in USA history leaves 50 million people without
power due to failure cascade in the aging USA grid. 50 billion dollars
of economic damage is estimated to have been caused.
2003 - USA electricity generation capacity troubled at the margin by
some nuclear power plants possibly having to shut down over summer to
repair degraded reactor heads. Nuclear power supplies 10% of USA
2003 - (october) - Bolivia
cancels plans to export more than a
billion cubic feet of LNG a day through Chile to the United States
following massive popular protests in the poverty ridden country.
2003 - (december) Indonesia signs a contract with BP to export 500
million cubic feet of liquefied natural gas (LNG) a day of
from its Tangguh facility to ship to USA's Sempra Energy's proposed LNG
import and regasification terminal in Baja, California.
2003 - (october) crude oil is $US30.35 barrel.
2003 - (october) gasoline
pump price in the UK is 81.3 pence per litre.
2003 - China sold 2 million
new cars this year - 70% more than the previous year.
2003 - China, having lost it's Iraqi concession signed in 1997 due to the US invasion of Iraq, now
realises it cannot rely on one or two major suppliers in the Middle
East. China intensifies its scouring of the world for oil fields to buy
into to meet it's rising oil imports needs. It intensifies its 'string
of pearls' - military bases in friendly countries protecting the sea
sea lanes to China's coastal oil and gas imports terminals.
2003 - (september) a law is drafted in the Russian lower House, the
called ‘The Law on Underground Resources.’ This would prevent private
companies such as Yukos from gaining control of undeveloped oil and gas
resources still in the
ground, and prevent private pipeline routes being developed outside the
Russian state pipeline network. Some commentators claim that the votes
in the Duma have been bought by some fabulously rich oligarchs so that
it cannot be passed.
(october) Yukos oil and gas makes a bid for its rival, Sibneft.
YukosSibneft would together have control of 19.5 billion barrels of oil
and gas. This company would then be second only to ExxonMobil (the
largest and most powerful company in the world) in ownership of oil and
gas reserves. A combined
YukosSibneft would be the fourth largest crude oil producer in the
world, able to produce 2.3 million barrels a day.
2003 - (october) Russian
billionaire oligarch Mikhail Khodorkovsky, controller of Yukos oil and
gas, is arrested on tax fraud charges. Khodorkovsky 'obtained' Yukos
assets from the Russian state folowing the breakup of the Soviet Union
under Yeltsin. His arrest is precipitated by a meetings he held with
Vice President Dick Cheney and George H W Bush (of the secretive
Washington Carlyle Group), said to be to discuss the sale of somewhere
between 25% and 40% of Yukos to ExxonMobil and ChevronTexaco. This
would have given the US military-industrial -presidential complex
control of the major part of Russian energy resources and pipelines.
Unsuprisingly, President Putin is angered by the attempt to subvert
Russias interests by de facto
selling Russias oil and gas resources, Russias major source of wealth, into American Government hands.
2003 - (november)
Russia, China and Korea sign an agreement to go ahead with a project to
develop the massive Kovykta condensate field in eastern Siberia. The
plan is to pipe the gas 4,887 kilometres from Irkutsk to Manzhouli near
the Sino-Russian border. Ultimately it will bifurcate to Beijing and
Dalian. At Dalian, a submarine pipeline over 500 kilometres long will
run gas to Pyongtaek in Korea. The Kovykta gas field contains between
1.4 - 2.1 trillion
cubic meters of natural gas - enough to supply Russia, China, and
Korea for more than 30 years at the rate of 34
billion cubic meters of gas per year. The project is estimated to cost
US$17 billion. Russia will supply China with 600 billion cubic meters
over 30 years, and supply Korea half that amount over the same time
period. The three countries would like to deliver first gas supplies by
2003 - USA -
Roughly 19,000 new natural gas wells were drilled this year.
2003 - The year ends with Dubai
medium 'sour' crude having sold for an
average price over the year of $26.80 per barrel .
2004 - The US military
guards 'US' oil supplies. USA signs a miltary base agreement with
Principe and San Tome, two tiny islands off West Africa's coast.
Curently Nigeria supplies around 400 million barrels a year to USA, and
Angola 110 mb/yr. Offshore Nigerian and Angolan oil might contain 83
billion barrels in
the long run. If it could be produced in significant volume it would
probably meet demand for 3 or 4 years, according to some estimates. But
there are large political and logistic problems in producing it.
2004 - Peace discussions between rebels and Sudanese government. Bitter
rebel commanders suggest Chinas oil contracts may be terminated once
they share in government power.
Sudan's government commits crimes against humanity in burning
villages, bombing, torturing, and murdering people in order to drive
people from their ancestral land to 'clear' land for oil exploration. 4
million have been dispossessed. 2 million are dead. They use guns and
planes bought from the Chinese, and
sometimes use oil company airstrips and facilities. UN wonders whether
or not it is 'officially' genocide.
2004 - China National Petroleum Corp begins trial oil production from a
field it almost totally owns in South Darfur, Sudan.
2004 - The Greater Nile Petroleum Operating Co consortium's (majority
owned by China National Petroleum Corporation) Heglig and Unity oil
fields in Sudan produces 350,000 barrels per day.
2004 - China now buys 10% of its oil needs from Sudan, which has
estimated reserves of 563 million barrels.
2004 - (august) - China's
state-owned Shenhua Coal starts building the first phase of a
plant in Inner Mongolia's E'erduosi. The first phase will cost about
$US1.25 billion. Break-even point for the plant is oil at $US22 a
barrel so long as China's coal remains around about $US10-$US12.50 per
ton. Once operational, phase1 is expected to annually produce 1.08
million tons of coal-derived oil products.
2004 - USA is now importing 60% of
the oil it uses.
2004 - Yemen passes its peak of production and starts its decline.
Highly pressurised supergiant
Cantarell complex in Mexico is now expected to "decline rapidly" from
last years pressurised production of 2.1 million barrels a day.
2004 - Prudhoe Bay's production has
declined to 350,000 barrels of oil a day.
2004 - UK North Sea fields production drops by 10% as decline continues
fields come into play, but nett of consumption there is an overall
loss). Production is now 30% below the 1999 daily average.
2004 - (january) USA -
Massive spike in natural gas prices. A
severe 3-day cold snap in the northeast results in sudden high demand
for domestic electricity. Utility companies invoke the ability to cut
supplies to industrial customers on cheaper 'interruptible' supply
contracts so as to supply electricity to domestic consumers. Fully a
quarter of the gas-fired utilities simply stopped generating
electricity and on-sold their natural gas supply as an enormous
profit.. Many industries are able to switch to fuel oil, but as oil is
largely barged into these regions, supply cannot meet the surge in
demand from industry. The supply shortfall is made worse by the policy
of keeping only the minimum amount of oil stocks on hand to meet
'projected' demand. The cost of home heating fuel oil spikes high. Some
areas of New York run out of fuel oil.
2004 - (january) Saudi Arabia opens its new Haradh oil and natural gas
facility. The plant will increase Saudi natural gas
production capacity by about 25%. Most of the gas will be used in the
burgeoning domestic market. Like Iran, the Saudis are turning to
domestic natural gas use to conserve the more easily transportable oil
2004 - (january) New
Zealand - Diesel prices are NZ 65 cents/litre (US 44 cents/litre).
2004 - (february) Japan's
Inpex Corporation signs an agreement with Iran to develop the massive
Azadegan oil field. Reserves are estimated at 26 billion barrels.
2004 - (february) France's Total and Malaysia's Petronas companies sign
a $US2 billion
agreement with Iran to build Iran’s first
liquefied natural gas (LNG) export facility, using gas from Irans South
Pars field. It
will have a capacity of 390 billion cubic feet a year, with expected
to commence in 2009.
2004 - (March) US
Department of Energy predicts oil prices to stay around $29 per barrel
whole of 2005.
2004 - US
Department of Energy forecasts world oil production won't peak until
around 2037, asserting -
"The world production peak for conventionally reservoired crude is
unlikely to be 'right around the corner' as so many other estimators
have been predicting..."
2004 - US office
of petroleum reserves report states "world oil reserves are being
three times as fast as they are being discovered. Oil is being produced
from past discoveries, but the reserves are not being fully
Remaining oil reserves of individual oil companies must continue to
shrink. The disparity between increasing production and declining
discoveries can only have one outcome: a practical supply limit will be
reached and future supply to meet conventional oil demand will not be
available....Although there is no agreement about the date that world
oil production will peak, forecasts presented by USGS geologist Les
Magoon, the Oil and Gas Journal, and others expect the peak will occur
between 2003 and 2020. What is notable ... is that none extend beyond
the year 2020, suggesting that the world may be facing shortfalls much
2004 - The head of the
the study of Peak Oil claims the massive Saudi Ghawar fields
geological structure may have been damaged by pumping at full capacity,
leaving some oil unable to be extracted. This field produces about 5
million barrels per day of the total Saudi output of around 9 million
barrels per day.
2004 - (early) A Texas based American oil industry group headed by the
former USA secretary of state James Baker
(now said to also be a paid
legal representative of both Exxon-Mobil and the Saudi Arabian
government.) draws up
plans for the USA administration which would create an Iraqi
(nominally) state-owned oil company to apparently control Iraqi oil and
Iraqi oil infrastructure. As Iraqi equity in its industry has been
removed and its capital base destroyed, a shrewd guess would see it
likely that the company would
have to 'farm out' all its assets to overseas companies due to capital
starvation (in return for a small percentage of residual profits,
probably equal to the food bill for the Iraqi people). A fair
speculation would be that it would
also have to borrow heavily - from plainly visible or disguised US
dollar currency interests. Repayments could possibly be in oil.
2004 - USA "provides" technical
assistance and "support" to the Iraqi Ministry of Oil to "define"
Iraq’s operational, legal,
policy, and "investment frameworks" for
the Iraqi oil industry.
2004 - Overall gas depletion in Europe is estimated at about 6%
production a year.
2004 - UK's Energy
Institute estimates conventional global oil reserves are declining at
the rate of about
4-6% a year, and staffer speculates the peak might be in 2008.
2004 - USA gasoline stocks are at the lowest levels since the 1970's
2004 - (march) Petrol
prices in USA are about $1.80
a gallon. In UK
petrol cost $US5.30 a gallon. A substantial part of the difference is
tax on petrol. The price signal in USA is, and always has been, to buy
'gas guzzling' cars with big engines. The price signal in the UK is,
and always has been, to buy more economical cars with small engines.
Can the USA national fleet abruptly change? In time. One estimate is
fifteen years to change over half the fleet.
2004 - (March) the International Energy
Association (IEA), in response to China's sharply increased oil buying,
raises their projections of the growth in demand for oil
by an additional 220, 000 barrels a day, taking projected daily demand
throughout 2004 to 1.65 million b/d.
2004 - (March) US president re-signs Executive Order (12959) of
1995 prohibiting US oil companies from oil exploration or development
with Iran. Presumably American plans are to take control of Iranian
natural gas by any or all of - 'precision-strike' missile coercion
(most likely); invasion; or sponsoring a coup d'etat and installing a
puppet regime (least likely).
2004 - (April) Iran signs a deal allowing Thailand to explore and
develop the small Saveh oil block.
2004 - (April) French firm
CETAL commences work on Iranian gas
pipelines to prevent them from freezing up in the coming winter.
Iranians are heavily reliant on natural gas for domestic use, and
winter freezes have interrupted supply. They now import much of their
refined petroleum products as they have no real refining capacity for
domestic use. Gasoline prices are heavily subsidised.
2004 - (April)
Iranian oil and energy analyst Ali Bakhtiari tells an audience at the
annual gathering of the Association for the Study of Peak Oil
(ASPO) in Berlin "By the end
of the year we will see oil at $50 a barrel" .
2004 - (may) energy advisor to George W. Bush energy investment banker
Simmons says for demand for oil to be 'controlled', oil would have to
reach $US182 a barrel. At this price, gas prices would also rise, by
his estimate, to the equivalent of
$US7.00 per gallon. On 2003
his price for natural gas may be conservative.
2004 - (may
1) Saudi terrorists storm the offices of a Houston-based oil company
in the oil hub of Yanbu killing six west Eurasians and a
Saudi man before being killed by Saudi security forces. Unlike the earlier fire
at Abqaiq, production is not affected.
2004 - (may) USA average
petrol prices breach $US2 per gallon for the
2004 - (july) Shell admits it has
overstated its reserves by almost 4.5
billion barrels. It is fined by the financial regulators.
2004 - (july) China buys oil to build its reserves - some
speculate it is starting to convert dollars of long term dubious value
into gold - black gold.
2004 - (july) Chinas
crude oil imports for the first 6 months are up by 334.8%.
2004 - USA 'lower 48 states now
produce 5 million barrels of oil a day.
2004 - (august) USA drivers use over 9.2 million barrels of petrol a
day in the summer 'touring season'.
2004 - (august) Russias privately held Yukos oil company may be forced
to stop operations due to a supposed massive tax debt. Yukos supplies
world market with about 1.7 million barrels of oil a day, about 2% of
2004 - (august) Oil prices rise
a barrel, the highest price
futures started being traded in 1983.
2004 - (september)
Russian current oil
at around 9.4 million barrels a day. 80% of Russian production comes
from Siberia. It is uncertain what the proven reserves are in the
undrilled parts of the region. No new oilfields have been found for 10
years. Russian oil companies currently pump out
more oil than is replaced by new discoveries. Field production decline
rates are estimated to be between 5% and 10% a year. Commentators guess
that if known fields will production peak at 11 million barrels a day
in 2010. Others speculate that discovered but undrilled reserves could
in time make
that ten times higher.
Of the as yet unproduced fields, the largest oilfield recently sold for
development is the Trebs-Titov-Central Khorever Plateau group of
Timano-Pechyora Province. This grouping might have1.68 gigabarrels of
oil. While large, this is not a giant field.
There are only two other fairly good sized fields, the Lodochnoye
oilfield in Krasnoyarsk (estimated 313 million.barrels) and the
Chayandinskoye oilfield ( estimated 365 million barrels). The other 50
or so fields sold are small. Another 100 fields may be sold, but there
is little data on their size, but all are known to be smaller than
Lodochnoye and Chayandinskoye.
2004 - Russia's
giant Samotlor field production falls to 325,000
barrels a day. At peak, it used to produce 3,500,000 barrels a
day. Production would have been even less if not for extensive use of
USA companies (Halliburton and Schlumberger) to carry out hydraulic
fracturing of the formation. As a
result, wells are producing over 3 times what they were producing in
2000. In 2000, the wells were producing 5 times less than they were at peak.
2004 - (september)
Russias new production since
2000 has now risen to 2.7 million barrels a day, an astonishing amount.
Much of the increase has come from application of new technology (such
as well perforation, well 'stimulation', directional and horizontal
drilling, fracturing of low permeability strata ) to old Soviet era
western and Siberain fields, which are known to be mature. These
likely to cause Russian fields to maintain high volume, but play out
earlier than currently assumed.
The increased global
demand now stands at 5.88 million barrels a day. Russia now meets
almost half that increased demand. Russian high volume
production is now critical to global supply.
2004 - (september)
Shell Oils total reserves fall by an unstated amount. New additions to
its reserve estimates equate to only about 20% of this years
production. Shell predicts the company
will be producing the "equivalent of" 4.5 million barrels of oil per
day by 2014. Presumably this includes gas.
2004 - Shell Oil finds
moderate sized gas play in western Canada. While
big relative to the usually shallow wells now in western Canada,
expected daily production still only equates to 0.04%
of total North American daily demand. Industry veterans note a field of
about this size would need to be found
every few months to flatten out the natural gas decline
curve of fields in Western Canada.
- (october) Canada - natural gas sells for over $5 per gigajoule.
2004 - (september)
Hurricanes shut down many of the Gulf of Mexico wells and reduce
production in Texas and Louisiana. Refineries in
Louisiana shut. US Southern State crude oil import facilities close. Hurricane Ivan causes
underwater mudslides, damaging 102 pipes taking oil and gas ashore.
platforms are destroyed, 20 others are badly damaged.
1.5 million barrels a day of oil production ceases. Crude
prices surge. Saudi
Arabia pumps at full capacity
to make up the shortfall, and 11 days after the hurricane, oil is
released from the USA strategic reserve.
(september 24) Hurricane Ivan reduces USA inventories of distillate
sharply. Petroleum inventories fall by about 13 million barrels. Crude
oil refining is down by 1.3 million barrels overall. Wholesalers draw
down their stored inventories to make up the shorfall. Wholesalers
inventories fall sharply as a result, at a time of year when they
would normally be rising.
2004 - (september) Oil passes the $US50 a barrel price mark at the end
2004 - (september) OPEC is now pumping crude at a 25 year high,
producing 30.5 million barrels per day, the highest production rate
since 1979. It has no impact on rising prices.
2004 - (october) crude oil prices reach $53 a barrel - a 20
year high. Only the few
commentators familiar with 'peak oil' had predicted this level, but
not this early.
2004 - (mid october) Oil hits $US55 a barrel.
2004 - (october) OPEC's 11 members pump 30.54
million barrels a day - the highest pumping rate since 1979.
(october) China signs a $100 billion memorandum of understanding with
joint development of a major Iranian gas field including a 25 year
supply contract for liquified natural gas to be produced from the
field. Once the field is commissioned, the contract is for Iran to sell
oil to China at a rate of 150,000 barrels per day for 25 years, at
prevailing market prices. Iran is China's major source of oil.
2004 - (october) USA
imports about 900,000 barrels of gasoline a day.
2004 - (mid
october) Repairs to hurricane damage now allow all but 200,000 barrels
a day of oil to flow again. There is a total
production loss of
43.8 million barrels of oil from the Gulf of Mexico for the duration of
(october) USA strategic oil reserves have been filling at the rate of
more than 100,000 barrels a day, and are now 666 million barrels. USA
adminstration decides to take it to 700 million barrels before stopping.
2004 - (november) OPEC revises its projection of oil demand growth for
next year downward. It estimates likely demand for OPEC oil to average
28.2 million barrels per day over the fourth quarter 2004 and first
quarter 2005. This is a 2 million bpd drop over the amount its own
figures estimate as having been produced in october.
2004 - (november) - China signs an agreement with Brazil to jointly
develop undersea oilfields off Brazil's coast, and to jointly construct
a natural gas pipeline.
(december) China imports a
record high of 12.1 million
tonnes of oil
this month (equivalent to 145.2 million tonnes
a year). Chinas total oil use, domestic and imported, was 6.38
million barrels a day - a growth in total oil demand of 15.6% for the
year. Imports of oil are now rising at the rate of 9% a year.
China's rate of oil use may be higher than officials ever anticipated
2004 - (december 31st)
China suspends the export of crude oil to help meet domestic demand.
2004 - (december) China signs a 25 year supply deal to import 3.3
million tonnes a year of liquified natural gas from Australia North
West gas fields. Supply is due 2006.
2004 - (december) Chinas government-owned China National Offshore Oil
Corporation buys a 5% stake in the consortium developing Australias
North West Shelf gas reserves. Australias Woodside Petroleum and BHP
Billiton each have a 12.5% stake, as does England's BP,
America's ChevronTexaco, Japan's Japan Australia LNG (MIMI) and the
Netherland's Royal Dutch Shell.
2004 - (late)
Indonesia's Petramina oil and gas company cancels ten LNG shipments to
2004 - (december) Qatar, with
the third largest gas reserves in the
world (its giant field, the North
field, holds 25 trillion cubic metres
of proven reserves), produced 18 million tonnes of natural gas in the
2004 - (december) Qatar announces the Qatargas II project to deliver
gas by train to Europe and then via a contract with ExxonMobil to
deliver future supplies to England
starting in the winter of
2007-2008. England will fill 20% of its needs from Qatari LNG. It is
described as "the biggest deal in the history of the
hydrocarbon industry". The Qatar government owns 70% of the project,
the US oil giant ExxonMobil owns 30%. It plans to produce 60 million
tonnes a year by 2010, which would make it the worlds biggest LNG
exporter at that point.
2004 - Qatar's RasGas signs
an agreement with Petronet LNG of India to supply 'up to' 7.5 million
tonnes of LNG.
2004 - (december) USA
Congress warned in testimony by UK energy
expert Dr. Daniel Yergin that "The US is facing a critical
five-year period in which, unless new steps are taken by consumers,
industry and government, there is significantly increased risk of
higher, more volatile natural gas and electric power prices, job
destruction and industry relocations." Not only is the
price of gas to industry going to rise, the price of natural gas
to power electricity
generation plants will rise. Thus the cost of
domestic and industrial energy will rise. Clearly, compressed natural
gas as a substitute for petrol for domestic automotives will be more
expensive than it has ever been, even if it retains a margin against
2004 - (december)
USA Congress warned in testimony by UK energy
expert Dr. Daniel Yergin that while USA currently imports 16% of
its gas needs from Canada, that supply is likely to slowly decline as
Canadian domestic demand increases more quickly than the very modest
yearly production increases.
2004 - USA onshore gas
exploration reaches record levels. Productive
capacity is not expected to grow meaningfully, and in total, is
expected to fall below 2003
2004 - (december) -
USA winter natural gas prices for domestic heating reach record high
- (december) - Canada and USA - The Canadian Association of
Petroleum Producers say new Canadian gas reserves found in 2004 are the
equivalent of 99.5% of 2004 production, a deficit of 0.5%. Most of the
new gas is found in British Columbia, which produces only 16% of
Canada's natural gas. There are few new fields in Alberta. Alberta has
75% of Canada's gas reserves.
2004 - (december) the Middle East now produces over 10% of world
production of natural gas.
2004 - (fourth quarter) Trend for increasing US dependance on
selling government bonds continues. This years USA additional debt is $US413 billion, most of
which will be funded by issuing more treasury bonds. Total accumulated
USA Federal Government Debt reaches $7.6 trilllion, funded by $4.4
trillion in publicly held Treasury bonds and T-bills. Almost half
the $4.4 trillion publicly held bonds are owned offshore - double the
amount held offshore in 1992. If the world is to continue to accept US
dollars, all payments for oil must continue to be in US dollars only,
as by itself, the dollar has little intrinsic value.
2004 - (fourth quarter) USA Federal Government debt owed to US Social
Security Trust Funds reaches an all time high of $3.1 trillion. $US1.8
trillion is now owed to
the Social Security Trust
fund alone via treasury bonds. Continued raiding of Trust Fund
surpluses to help pay the huge USA debt means the cash in the funds is
replaced with treasury bonds whose value depends on the fate of the
dollar, which depends on the fate of the 'petrodollar'. The USA
Government will not be able to replace the market
value of the money it has 'borrowed' from the funds in even the medium
term, let alone the long term. Medical benefits and retirees pensions
will necessarily be extremely limited when the taxpayer base shrinks as
oil prices climb. Bonds must be issued to fund future shortfalls. If
the US bonds are to have any value, the dollar has to be backed by
as in itself, the dollar has
little intrinsic value.
2004 - The USA
government-run Pension Benefit Guaranty Corporation administers payment
of retirement benefits of nearly 500,000 workers and retirees covered
by around 2,700 business sector pension plans that have terminated. The
Corporation now also insures around 42 million American workers (about
a third of the workforce) in more than 44,000 private-sector pension
plans in case the companies fail and can no longer pay out their
pension liabilities. It is funded for occasional failures in any given
industries, not collapse of whole industries.
2004 - USA has experienced the highest budget deficit in history -
$US500 billion. Interest rates on US treasury bonds are at historic
lows, but are raised slowly to convince Asian banks to continue buying
bonds. Asian banks, and particularly China and Japan, hold 43% of
treasury bonds, whose value depends on oil backing. Neither wishes to
rock the boat, especially as it is uncertain how much of the Middle
East oil reserves USA may ultimately control. High oil prices are in
both the Asian banks interests (to support the dollar) and the USA
interest (to show foreign banks that Middle East oil backing continues
to make the treasury dollar bonds worth buying; thus financing the
deficit and the Iraq occupation).
2004 - USA trade deficit (cost of
foreign goods imported less money received for US goods exported)
$700 billion per year.
The largest part of the deficit is for imports of gas and oil, not
Chinese and Japanese trade goods, as popularly supposed.
2004 - USA has trillions in consumer debt - per capita, the
the world. Only a strong dollar, backed by oil, prevents interest rates
rise, and collapse of the consumer debt bubble, with consequent recession.
2004 - Iran signs a $70
billion energy agreement with China. China's state oil company,
Sinopec, agrees to buy 250 million tons of LNG over 30 years from Iran,
and develop Iran's giant Yadavaran gas field, and jointly build related
petrochemical and gas industry infrastructure, including pipelines. The
second phase will involve building a 386 kilometer pipeline in Iran to
the Caspian Sea. Ultimately, the Iranian pipeline will link up with a
planned to go from northwest China into Kazakhstan.
2004 -(december 28)
Iran announces plans to have an international oil trades bourse, adding
to the NYMEX bourse in New York and London's 'International Petroleum
Exchange' bourse (both are owned by oil-connected USA and UK
interests, and operated by an Atlanta, USA, corporation). The USA
government prohibits USA companies to
trade with Iran, and therefore the USA government prevents it's
domestic oil and petrochemical companies from buying or selling on the
bourse. The oil trades will be denominated in euros and
transacted over the internet. It
solves the problem of lack of a euro-denominated benchmark standard.
The three current oil benchmarks - Brent crude (UK), West Texas
Intermediate (USA), and Dubai (UAE) are all USA dollar denominated. A
euro denominated oil trading benchmark will significantly add to the
value of the euro. It will save Europe the bank fees involved in
converting US dollars back into euros. Over time, it will
of the dollars 'black
gold' backing. Iran already trades with Eurasia
in euros. The bourse
will also make oil-for-carbohydrates barter deals easier for Iran. For
example, Iran could swap oil for grain (China has bought large tracts
of maize-growing land from the Zimbabwean dictator Mugabe). If it goes
ahead with this commercial activity, Iran's fate is
likely to be sealed. Iran plans to start trading on March 20, 2006, the
Iranian New Year.
2004 - (november) Russias Putin publicly considers the idea of
switching its trade in oil from US
dollars to Euros at a summit of
European leaders in the Urals. Russia is now the worlds biggest
producer of oil by volume (bigger than Saudi Arabia). More than half of
Russias oil trade is with West Eurasia. This follows the effective
re-nationalisation of the Yukos oil company, and may be a 'straw in the
wind' to the erosion of the petrodollar. Unlike Saudi Arabia, Russias
reserves are not massive enough to allow it to remain as number one for
2004 - Denmarks' oil field may have
peaked at 50% of estimated ultimate recoverable reserves of oil (around
3 billion barrels), according to one commentator using the Hubbard
2004 - Ghawar, the world's
largest oilfield is now producing
about 4.5 million barrels a day. One commentator estimates the decline
at about 8%. Between 30% and 55% of the fluids pumped up the well are
water. In a presentation to CSIS
, Saudi Aramco reveal
(pdf) that the Ghawar field is 48% depleted.
2004 - Oil output from China's domestic fields is a total of 175
million tonnes for the year, 2.9% more than 2003. Oil consumption for
the year is 288 million tonnes. This is16.8% higher than for 2003.
2004 - China imports about 113
million tonnes of crude oil.
2004 - China's largest oilfield in Daqing continues
million tonnes for the year.
2004 - Both China's second biggest oilfield at Shengli, and it's third
biggest, at Liaohe, continue to decline. Field-edge drilling and
reservoir pressurisation are being used to maintain production levels.
2004 - China displaces Japan
as the second highest importer of crude
oil in the World.
2004 - Chinas total energy use from renewables - hydro power, solar,
and wind - reaches 1%.
2004 - China sold 2.4 million new cars to it's citizens, 20% more
vehicles than last year.
2004 - China increases the amount of automotive fuel it burns by 20%
relative to the previous year.
2004 - There are now about 13 cars per 1,000 people in China. Bicycles
are a major form of non-recreational personal transport.
2004 - there are now about 600 cars per 1,000 people in USA. Bicycle
barely register as a form of non-recreational personal transport.
2004 - China's total oil consumption for the year is the equivalent of 1.3 barrels of
oil per citizen.
2004 - China's nett oil imports for the year are
about 879 million barrels (120 million tonnes), equal to 2.40 million
barrels a day. This is about 40% of China's total oil consumption.
2004 - By years end, USA consumes
oil at the rate of 19.7 million barrels of oil a day
2004 - USA remains - by a huge margin
- the worlds's highest consumer
of oil, consuming the equivalent of 25 barrels of oil per person in USA.
2004 - By years end, global
daily oil consumption is now
about 83 million
barrels a day, 17 million barrels a day more than earlier
2004 - Growth in oil demand in USA, originally thought to have
increased by 2.4% over last year - or 484,000 barrels a day - is found
to have in reality been nearly 50% greater. The USA increased its
consumption by 3.5% for the year, or an additional 697,000 barrels a
day more than last year.
2004 - diesel fuel
in USA averages $1.81 per gallon for the year, and the trucking
industry spent $62.6 billion on diesel.
USA now uses about 3.7 million barrels of crude per day in producing
2004 - USA uses
about 8.8 million barrels of crude a day in producing
its daily petrol use. A barrel of crude contains
159 litres/42 US gallons. Once refined, this barrel of crude oil will
yeild 75 litres/about 20 US gallons of petroleum ('gasoline').
2004 (december) - USA now
imports about a million barrels of refined petroleum per day from
2004 - USA natural gas use is now
higher than 1999, mainly due to increasing use of gas to generate
electricity. The unregulated and unplanned USA 'free' market has
resulted in more private gas fired plants being built than there is
reliable gas supply.
2004 - USA - Roughly
22,000 new natural gas wells were drilled this year. The
national average per-well production is now down to about 146 million
cubic feet of gas per day.
2004 - International Energy Agency says rate of demand grew faster in
2004 than any year since 1976.
2004 - the number of private cars on Britain's roads is estimated at
about 29 million.
2004 - the number of private cars on Europe's roads is estimated at
about 192 million.
2004 - small cars make
up 33.4% of the European Union fleet - about 64,000,000 small cars.
2004 - Toyota estimates it will sell 10,000 petrol-electric hybrid cars
in Europe next year.
2004 - small cars make up
14% of the USA fleet.
2004 - Estimated 'world car population' is now 740 million.
2004 - The year ends with the preferred, easily refined Dubai 'sweet'
having sold for a price averaged over the entire year of
$33.60 per barrel.
2004 - by years end, knowledgeable commentators predict oil to range
between $US45-$US60 a barrel, i.e.
EUR36- EUR50 a
barrel for 2005. At least one commentator suggests $US75-90 will
not choke off demand.
2004 - crude oil production
prices have remained at about $US6
per barrel for non-OPEC oil producers and at about $US1.50 per barrel
for OPEC oil producers.
2004 - The International Energy Agency says non-OPEC oil producers are
currently producing 50.1 million barrels a day (excluding oil
condensate liquids from natural gas wells).
2004 - Saudi Arabia earns about $US116 billion in net oil export revenues, and nearly
80% of state revenue. This is 35% higher than 2003. Oil, gas, and oil
product revenue remains virtually the sole source of income for the
Saudi dictatorship. Year end budget surplus is about $US26 billion.
Public debt is around $US164 billion, and foreign assets about $US110
billion, making a nett negative 'position' of around $US54 billion.
Population growth is the highest in the world and unemployment remains
2004 - The
International Energy Agency lists countries exporting at least 1
million barrels of oil per day. These countries are responsible for exporting 38.3 million
barrels of oil per day. The top three nett oil exporting countries are
Saudi Arabia (8.73 mbpd), Russia (6.67 mbpd) and
Norway (2.91 mbpd), a total of 18.31 mbpd. These three countries are
now the 'big three', making up nearly
half of the total net oil exports from the top oil exporting countries
of the world. But Russias reserves are expected to peak in about 2012,
and Norway will peak before then.
2004 - USA - A years end survey of 32 firms (86% in the food and
beverage industry) by IBM Business Consulting Services
and the Grocery Manufacturers Association reveals transportation costs
have risen by 23% in the food, beverage
and consumer products industry since late 2001. Overall, these
increased transport costs represent 6% of gross revenue for these
busineses. Transportation costs have risen to an average of $US1.69 per
mile. The companies include
mega businesses with annual
revenue of $1 billion or more such as General Mills, ConAgra Foods and
Procter & Gamble. In response to these cost increases, new
efficiencies are being systemically embedded - no partial loads are
shipped, and some loads are being shifted to rail, which for some
commodities is becoming a cheaper option.
2005 - Houston petroleum consultant estimates, on an
inflation-adjusted basis, pump prices in USA would
have to be $US5.10 per gallon to even equal the 1980 price. He does not
mention the recession
(new year) by years end, one analyst projects the possibility oil may
consumed at the rate of 86
million barrels a day by the fourth quarter.
This is 3 million barrels a day more than was consumed in 2004. This
would be a total annual demand for production of an additional 1,095
barrels a year by the end of 2006 - well in excess of last years
'cushion' of supply over demand of about 7.2 million barrels! There is
no evidence Saudi Arabia has the 'extra' pumping capacity of 3 million
barrels a day it is claiming, and that might meet this shortfall.There is
no evidence there is spare pumping capacity of refinable oil anywhere at this
these projections, the implication is that there would be a
shortfall 3 days into the new year in 2006. Even taking into
account the extra oil no longer required for US strategic
reserves, the supply shortfall would still appear on the third day of
the new year in
2006. If true, [January 2006 - it wasn't, supply and demand are
almost perfectly matched] this would be an historic event in the very
brief oil economy.
2005 - International Energy Agency (a conservative forecaster)
forecasts daily oil consumption to
rise to 84.3 million barrels a day this year. This is about 1.3 million
barrels a day (475 million barrels a year) more than 2004, and on last
years consumption levels, this forecast implies that there would be a
supply shortfall 6 days into the new year in 2006. Taking into account
the extra oil no longer required for US strategic reserves, a supply
shortfall would appear 8 days into the new year in 2006.
2005 - (january) China's vice president Zeng Qinghong visits Venezuela
and signs an agreement on a number of bilateral areas of
cooperation, including an agreement facilitating oil sales to China.
2005 - (january) India signs
a bilateral contract with Iran to buy 7.5 million
tons of liquified
natural gas a year, the contract to run for the next 30 years.
2005 - USA "almost 200,000 megawatts of gas-fired power plants have
been installed [in recent years],
equal to one-fourth of the country's total installed capacity in 2000."
2005 - Demand for LNG
(liquified natural gas) has reached such heights
that it exceeds current capacity to liquify it for shipping. Once
sufficient liquification facilities are built to meet strong Asian,
European and American demand, there will not be enough highly
specialised liquid gas transportation vessels to carry the liquid gas.
Russia's major gas producer, Gazprom, seeks to develop new fields in
the northern and continental shelf regions as its mature major
Western Siberia are now declining and experiencing drops in production
of 20-25 billion cubic meters a year.
(january) Gazprom signs Memoranda of Understanding with ChevronTexaco,
Statoil and PetroCanada in its efforts to partner with North American
companies with gas marketing and re-gasification facilities. Gazprom
intends to develop a train to make LNG near its new Barents sea giant
fields. It also intends to make easily-shippable synthetic oil from the
2005 - (january) The
U.S. manager of Toyota's advanced technologies group, when asked when
fuel cells cars would replace gasoline-powered
cars replies "If I told you 'never,' would you be upset?". While
American car makers embrace an energetically and logistically
impoverished idea - hydrogen fuelling - Toyota embraces and refines
high fuel efficiency hybrid gasoline-electric cars.
2005 - (january) New
Zealand - Diesel prices are now NZ 93 cents/litre
(US 72.5 cents/litre)
2005 - (january)
Turkey uses 2.6 billion cubic metres of gas more
than it has contracted
for from its second largest supplier, Iran. How much of this extra
demand is actually Israeli demand (Turkey on-sells some if its Iranian
gas to Israel) is unknown.
2005 - (january) Turkey,
an American ally, "expects" to buy an
additional 6 billion cubic metres of Iranian gas above its existing 25
year contract by 2007.
2005 - (january)
Iran raises the price of its gas
exports to Turkey by
4.5%. Turkey (?Israel) doesn't
to pay, and goes to the International Court of Commerce for a ruling.
The ruling is due in September.
2005 - (january 31) -
light sweet crude is US$48.20.
2005 - (march)
Saudi officials claim they have raised their production of oil to 9.5
million barrels a day.
2005 - (march) USA buys
oil from these suppliers, in Million Barrels Per Day (rounded) -
Canada 1.98, Mexico 1.64, Saudi Arabia 1.62, Venezuela 1.51, Nigeria
0.95, Angola 0.67, Iraq 0.54, Russia 0.46, UK 0.44, Algeria 0.37,
Ecuador 0.30, Virgin Island 0.27, Norway 0.26, Kuwait 0.20
(february) Indonesia hit its lowest production level in 34 years of
pumping - 942,000 barrels per day. Continued depletion plus increased
internal consumption means that Indonesia is now
a nett importer of
crude. Domestic demand for oil and gas increased by around 50% in 2004.
2005 - (february) Saudis produce 9.2 million barrels a day to
meet increased world demand.
2005 - (february)
USA drivers use over 8.8 million barrels of petrol a
day in the winter low demand season.
2005 - (march)
USA imports 14.6 million barrels of oil a day of the total of 20
million barrels of oil a day it consumes.
(march) The price differential between the more difficult and expensive
refine 'heavier' (more viscous) oils and 'sour' (higher sulfur content)
crudes and the easily refinable 'light' 'sweet' (low sulfur) crudes is
a barrel. At this time inventories are being built for the summer
driving season. In addition, new standards introduced in the last two
years in USA, Europe, China, Canada, Japan, Australia and India require
less sulfur in petrol. These standards reduce the yield of
gasoline and diesel per barrel of crude oil, and therefore reduce the
refinery profit. Heavier, higher sulfur 'sour' crudes
yield even less gasoline and diesel, and are not preferred for that
2005 - (march) Saudis produce 9.5 million barrels a day to meet
increased world demand.
2005 - (march) US petrol still $US2 at the pumps.
2005 - (first
quarter) The president of China's Sinopec Economics and Development
Research Institute predicts China's oil consumption will double over
the next 15 years to more than 10 million barrels of oil per day. As
China reserves would only last 17 years at its much lower 1999
consumption rate if it relied soley on its own oil, it is clear that
China will be looking to buy up to
8% of current (Q1 2005) daily world production. But in 15 years time
there will be a 739 million tonne (about 15 million barrels a day)
shortfall in annual world supply if demand averages at 1999 levels in
the intervening years. A worldwide 15 million barrel a day shortfall is
not a good time to be looking to buy an additional 5 million barrels a
over existing (2004/5) purchases! Perhaps the intention is not to buy
them at all...
(february 15th) - Unverified 'leaked reports' of a second speech
China's previous Minister of Defense and vice-chairman of China’s
Central Military Commission, Chi Haotian, has the Chinese Communist
Party worried about its continued existence, and discusses a need to
emulate Hitler in the quest for "more living space". He supposedly
states openly that The United States,
Canada and Australia are the only places large enough to accommodate
Chinese needs for unpolluted air, water and land. The racist and
xenophobic speech advocates a suprise attack on the USA using China's
"biological weapons" to depopulate USA ("clean up") as a
conquest, or, if that fails, implying the use of electro-magnetic-pulse
from a sub-space overhead nuclear explosion to 'jam' USA operational
electronics, followed by simultaneous explosion of 'clean' neutron
bombs - presumably mostly 'small suit-case sized' devices planted in
major cities, and some possibly delivered from satellites (Shen
'cyberwarfare' neutron device series ).
This 'speech' - if true - also says China is also working on genetic
bio-weapons to kill everyone except (quote) "yellow people", but admits
- "in recent years, we have been
conducting research on genetic weapons, i.e. those weapons that do not
kill yellow people. But producing a result with this kind of research
difficult". The supposed
speech advocates multidimensional war - economic, electronic,
biological and nuclear - whose chief element is surprise,
copying the Japanese suprise attack on Pearl Harbour, but with either
viruses or 'clean' neutron nuclear bombs ("...We are capable of
purpose of “cleaning up” America all of a sudden...It is indeed
brutal to kill one or two hundred million Americans. But
that is the only path that will secure a Chinese century, a century in
which the CCP leads the world."..etc.) .This may be propoganda
from one side or the other...or it may not.
In the event it is true, but not just the raging of a 'fading star' of
the Korean war generation, then clearly the destruction of large parts
of the USA infrastructure by low-yield but 'clean' (no residual
fissionable material causing cancers for decades) neutron bombs - with
or without nerve gas or anthrax attacks in every major subway - would not prevent retaliation by
USA's 56 nuclear powered attack submarines. As the USA does not possess small yeild neutron bombs, the
resulting 'high yeild' nuclear
conflagration in China and decades of 'hot' background radiation would
make China's 'victory' over USA utterly meaningless. Both countries
would be crippled. (The wild card is whether or not China can find
and destroy USA nuclear submarines, thus making an attack on mainland USA almost
But China would in effect be crippled forever. Paradoxically, the
Chinese use of neutron weapons would mean USA's infrastructure would
remain in place, and a slow recovery would be possible. Chinese
infrastructure, on the other hand, would have to be built from the
Even with USA and Chinese oil imports dramatically cut, the rest of the
world will continue to use oil and gas at an increasing pace. The
decline curve may flatten a little, but only by two or three decades.
As a result, even in a post-conflagration world, building costs are
likely to be much higher than today, and to increase in price over
time. Chinas huge flow of overseas income would largely no longer
exist, as its factories and infrastructure would have passed the
'tipping point' of such extensive damage it is un-financable. The cost
to China of fully rebuilding its infrastructure would ultimately be so
prohibitive that China would likely break up into a series of
relatively rich (coastal) and poor (inland) loosely federated nation
states. (Global infrastructure contains a truly enormous but 'once
only' subsidy of decades of cheap oil. Those who 'burn' their lucky
gift will never ever get
2005 - (early
2005) - On the 23rd of march an isomerisation unit at BP Texas City's
refinery explodes as workers try to start it up after maintainence. 15
workers die and 170 people are injured. The failure
is attributed partly to mechanical failure and partly lack of a flare
safely burn off combustible material in the unit as it was being
re-started. In may, at the same refinery, a different unit with thin
and eroding pipes, had experienced a pipe rupture and fire in 2004. A
further unisolatable weld erosion in the same unit, known to be a
"serious safety risk", is allowed to run for 3 days until another unit
closed for maintenance is back in operation. In order to isolate
the defective unit so it can be safely shut down it would be necessary
close off multiple other units. Shutting down units at this plant
carries some risk. It was considered the safety standards at the
refinery were not high enough that the risk presented by shutting
multiple units was higher than the risk of keeping a defective unit
operational for a few days. The U.S. Chemical Safety and Hazard
Investigation Board calls for BP to appoint an independent panel to
assess BP's corporate safety culture, and BP's
mechanical integrity programs at BP's five USA refineries.
2005 - (march) US Department of Energy said it expects prices to
stay near or above $50 per barrel for the rest of 2005, making their
just 12 months ago wrong - a 40% error margin in only 12 months!
2005 - (march) For the first time, a USA Government report admits what
has been obvious to the rest of the world for some time "World oil peaking is going to
happen....[the] timing is uncertain". It advocates early
governmental intervention, minimising public consultation as it delays
an already overdue response. It presents three possible scenarios,
depending on when oil peaks. In the worst case - which is more likely
to be the actuality - they tell the truth, but couch it in dense
and obscuring language - "if mitigation were to be too little, too
world supply/demand balance will be achieved through massive demand
destruction". "Demand destruction"
is a euphism
for "recession", a term the authors fear using. "Demand" for oil
would be "destroyed" because a recession is characterised
by failure of
businesses (most importantly, the small businesses that employ most
people), unemployment, people stop spending, and cut back in luxury
activities such as travel, huge government debt as tax base erodes and
welfare skyrockets, failure to repay house loans, huge increase in
bankruptcy filings, and so on. 
2005 - By years end, one estimate is that 92%
of all the oil
used in the USA will be imported (some
domestic oil will be held in
reserves for strategic reasons).
2005 - (april) US strategic crude oil reserves have recently been
around 250,000 barrels a day and are now nearly full,
providing a buffer in
case of 'price spikes' in the Middle East if it attacks or invades Iran.
2005 - Iran considers increasing exports of liquified natural gas (LNG)
oil field production declines.
2005 - Iran produces around 4 million barrels of oil a day, 1.5 million
barrels are used domestically. Iranians also use large amounts of
kerosine for both heating and for cooking, resulting in high levels of
air pollution. Iran imports Caspian Sea oil for its refineries in the
heavily populated north, conserving part of its oil in the southern
oilfields for export.
2005 - Iranian opponents
of gas exports claim by 2010 domestic demand
for gas will be 42 billion cubic feet per day (bcfd) - far in excess of
rather limited production. Critics estimate using gas to pressurise oil
maintain pumping rates will require 20 bcfd, 5 bcfd will be required
and petrochemical use, 7 bcfd for electric power production, and10 bcfd
will be needed for commercial, residential, and automotive compressed
2005 - Iran's
electric power consumption grows by 7% a year. It must triple electric
supply capacity within the next 15 years to meet projected demand.
2005 - Iranian natural gas production is 25 billion cubic feet per day,
which includes production from the first three
phases of the giant South Pars gas field. Iran's giant gas fields are
only just beginning to be tapped.
2005 - Iranian
opponents to natural gas exports claim that a CNG (compressed natural
gas) program to power vehicles will need to be in place by 2010 to
replace the estimated 63,000
barrels a day of gasoline that will be being consumed by then. By 2010
domestic consumption will not meet demand.
further development of South Pars will barely keep pace with existing
2005 - The population of Iran is now
70.7 million. Half of Iran's
population is now under 25 years of age. Unemployment is around 11%.
Nearly a million jobs a year must be created to keep unemployment at
2005 - Oil and gas journal
reports Iran is losing
oil productive capacity of 350,000 barrels day every year, with the
decline rate possibly reaching 500,000 barrels day every year by 2010.
The estimated decline rate of onshore fields is now 8% a year; the
decline rate for offshore fields is now 13% a year. Overall, crude oil
production is "stagnant", despite 600,000 barrels per day being added
to production from foreign investment since the mid 1990's. New
production simply compensates for decline in the aging fields.
2005 - (april) US
presidential commission into pre-war intelligence
failures finds the CIA believed second hand reports from an informer
described as "crazy" by his German intelligence handlers, and by his
friends as a "congenital liar" without doing the usual checks on the
informants reliability. The informants numerous unsubstantiated lies
were the basis for the presidents spy agency to be able to say to the
presidential/military administration that Iraq had weapons of mass
destruction (later slyly watered down to WMD "programmes"). The report
that Iraq had no weapons of mass
destruction (as the UN inspectors had already reported). It is
officially confirmed there were no programmes
involved in producing them. The given
reason for USA and its minor supporters acting essentially
unilaterally outside the International System (UN multilateral system)
in invading Iraq was based on lies.
The real reason is
congruent with the 2001
energy strategy of using soldiers to invade and base themselves
(or their proxies) in unstable countries with significant oil reserves.
2005 - (april) U.S. Department of Defense will reportedly spend
$100 million in "the next
few years" to establish a network of police forces
and 'special-operations units' "that can respond
to various emergencies,
including attacks on oil facilities" around the Caspian Sea oil and gas
fields claimed by former USSR countries.
2005 - Russia expands its Caspian fleet to defend its claims to
offshore fields in the Caspian Sea.
2005 - Tension simmer in the Bakassi Peninsula in West Africa, a narrow
stretch of land claimed by both Nigeria and
Cameroon, and which may contain gas and oil reserves.
2005 - (april) Saudis offer to produce at full capacity - 11 million
barrels a day - to meet increased world demand. But this extra supply
is made up of higher sulphur medium and heavy
crudes not easily used by many refineries, not the 'Saudi light' the
industry had been expecting.
(april) The price differential between the more difficult and
refine 'heavier' (more viscous) oils and 'sour' (higher sulfur content)
crudes and the easily refinable 'light' 'sweet' (low sulfur) crudes is
a barrel. In the USA, summer 'driving season' petrol stocks are well in
hand, and there is a respite before the build up for winter fuel oil.
2005 - Any
increase in supply of Saudi light crude simply will not be
available until about 2012. In the interim, existing Saudi light crude
supplies will be declining year on year. 2.5 million barrels a day nett
are hoped for, by that time - relatively inconsequential in the large
scale of global oil decline by that date.
2005 - Saudis are now
pumping 7 million barrels of salt
water a day
into the giant Ghawar field to keep the pressure up to maintain
production rates - more water is being pumped in than oil was pumped
out at Ghawar's peak of production in 1981. Ghawar produces 60% of Saudi
decline of pressurised fields in general principle is likely to be
'steep' and 'abrupt' rather than slow and gentle. If true, this is very
2005 - (april) Bank of Montreal analyst predicts Saudi Arabias oil
rate will be "...among the world's fastest as this
decade wanes..." and estimates that the Saudi Ghawar field, the
oilfield in the world, has already peaked.
commentators question why even new
Saudi fields are being
pressurised with water. This technique is usually reserved for aging
fields. The suspicion is that the fields are being pumped at a very
high rate, which means they would peak earlier than would otherwise be
2005 - Saudi Aramco claims the
size of its oil reserves have remained the same since 1990;
also claim they have increased
slightly from 258gb to 259gb, due to better extraction
techniques. These claims are met with skepticism by those following
the Peak Oil debate.
2005 - (april) Saudi Aramco oil company announces it has
"ambitious expansion plans" to raise production capacity to 12 million
barrels per day. Aramco claims plans to develop more crude in the "long
term" will raise that to 15 million barrels a day. Aramco make the
huge claim that oil can be produced at these rate for about the next 50
years. They produce no huge evidence to back the claim. Saudi Aramco's
own statistics show existing Saudi fields falling short of previous
production by 600,000
to 800,000 barrels per day every year.
If this rate of decline
continues into the future, the short term expansion of an additional 3
million barrels a day that the Saudis claim (12 mbpd claimed future
capacity, minus 9 mbd present production) will be eaten up by field
production declines in about 5 years. Production will then be back to
where it is today until - or if - the other 'crude developments'
come on stream.
2005 - ExxonMobil, in
its 'The Outlook for Energy:
A 2030 View' presentation projects that non-OPEC crude oil
oil condensate production will plateau before 2015, thereby becoming
the first oil company in history to fully publicly
admit peak oil is reality. ExxonMobil, an oil company, suggests the
unmet demand can be met by increased fuel efficiency in cars (!!), and
by OPEC increasing production. However, as one of the founders of the
Association for the study of Peak oil and Gas notes -
"This assessment [of increased OPEC production] is somewhat ominous…
increases are only possible from Iraq, Saudi Arabia, Kuwait, and the
United Arab Emirates. For these countries, and indeed for most OPEC
members, petroleum and petroleum products are their only significant
export. As such, they have a vested interest in obtaining the best
possible price for their non-renewable resources. OPEC nations would be
quite unlikely to increase production as rapidly as needed unless
compelled to do so." - Colin Campbell, ASPO.
2005 - (april) Australian officials say new projects starting up may
allow oil output to rise in 2006 for the first time The last five
years have seen output decline from Australias aging fields. Production
is expected to resume the decline once more in 2008, as exploration in
failed to find significant new oil deposits.
2005 - (april) Australian Treasurer Peter Costello publicly warns that
Australia is running out of oil for export -
"The reason why Australia's crude oil exports have fallen over recent
years - while world demand and prices have increased to record levels
and LNG exports are booming - is that some of our oilfields are
approaching the end of their productive lives..."
2005 - (april) Australia needs to import 30% of the oil it burns
domestically. The Australian Petroleum Production and Exploration
Association estimates if existing consumption - and consumption
continue, in theory Australia will need to import 78% of its oil
requirements in 2015. Obviously, recession-mediated
demand fall off will reduce that percentage requirement.
2005 - Denmark likely to
reach the peak of production this year, others
say "within 3 years".
2005 - industry watchers forecast Brunei to reach peak of production in
2006, others say sometime with the next 3 years.
2005 - (april) Japanese government releases survey findings that
China's Chunxiao and Duanqiao gas fields on the Chinese side of the
median line between China and Japan in the middle of the East China sea
are geologically linked to untested gas reservoirs identified on Japans
side of the line. Japan makes moves to accelerate test drilling for
natural gas on it's side of the line, fearful China will "access"
Japanese gas structures. Protests in China over new Japanese school
books glossing over
Japans never-admitted and never apologised for large-scale crimes
against humanity in China in World War 2 may be co-incidence. Or maybe
On April 1, the government released survey findings that China's
Chunxiao and Duanqiao gas fields are linked to Japan's gas fields. As a
countermeasure, the government plans to begin procedures in the near
future to grant private developers the right to test-drill on the
Japanese side of the median line.
2005 - (april 7th) the International
Monetary Fund says the world is facing "a permanent oil shock". It
envisages permanent high prices for the next two decades.
2005 - (april 19th) US president Bush admits in public what he has
known since at least 2001
(and probably a lot earlier)
mean, we're just going to have to change our habits. And that's
one of the reasons why I funded the hydrogen-powered automobile
initiative, fully recognizing that, you know, with [within] the decade we're
going to have to think about how to drive different -- you know, power,
power our automobiles. It's a -- the hydrocarbon society will still be
with us, but it can't be with us to the extent it is today." Of
course, hydrogen power is very energy expensive, and can
even begin to replace petrol. Bush also notes the need for more
investment in refineries - an oblique admission that the Saudis 'excess
capacity' is not the sweet light crude the world wants, but the heavy
sulphur containing crude that requires specialised refineries to be
able to deal with it.
2005 - (april 15th) Volkswagon abandons work on its extreme
car (the prototype does better than 265 mpg). Even with a
simple single cylinder diesel engine, it says it cannot produce a
popular economy car for less than €20,000 ($US25,900), which is too
expensive. Their existing
production model, the VW Lupo, is a 1.2 litre (turbocharged),
diesel car and already does a thrifty 3 litres to the 100 kms (~ 78
33.3 kms per litre,
and is significantly less expensive at €15,100 ($US19,500). It engine
switches off automatically when stopped for longer than 4 seconds, and
automatically re-starts when the foot is off the brake.
2005 - (april) The record
for going the furthest on a single tank of fuel is broken by a Fifth
Generation Golf 1.9 Turbo diesel, driven in an epic fifteen hour trip
from Germany, across Europe, to the Czech Republic. Fuel economy was
2005 - (april) work starts on the world's longest
pipeline (1,200 kilometres), running from Norway to Great
Britain. When completed in 2007, its capacity of 70
metres of natural gas a day will be enough to meet about 20% of UK's
current gas requirements. UK's former Minister of Energy Brian Wilson
predicts that by the year 2020, 70% of UK's electricity will be
generated by burning gas. 90% of that gas will have to be imported. His
"working assumption" is that global oil and gas reserves "continue to
be significantly underestimated". He provides no data to explain why he
makes this assumption. He provides no figures for his assumed
2005 - (april) Americas Secretary of State Rice tries to
prevent a gas
pipeline to India to meet its gas requirements, telling
reporters she had "communicated" to the Indian government Americas
"concerns" about "the gas pipeline cooperation" between Iran and India.
Unsuprisingly, India's Prime Minister Singh tells her the gas is
necessary for India's "soaring" energy needs, and that "We have no
problem of any
kind with Iran."
2005 - (february 4th) Russia abandons its de facto peg
to the US dollar, and alters its exchange rate to take into account the
euro as well as the dollar.
2005 - (may) Americas Secretary of State Rice
tells Russias Putin "what Russia can do", that is, "What Russia can do
is to adopt policies in its energy sector in terms
of the development of its energy sector that will increase the supply
of oil both in the short term . . . and the long term..." She wants Russia to allow her countries' oil companies
to drill for Russian oil...Rice is a former director of the oil company
2005 - (april) Russia announces it will build a pipeline from Taishet in
eastern Siberian to Skovorodino,
near the border between
China and Russia - a distance of around 2,000 kilometre. It will
then build a branch pipeline into China before possibly continuing on
for another 2,000 kilometres to Perevoznaya,
only about 600 kms by sea from Japan.
2005 - UK now imports 50% of its domestic coal requirements from
2005 - UK now
obtains 30% of its electricity
requirements from coal.
2005 - (april) Saudi energy minister again repeats claims Saudi Arabia
has 'spare' capacity of 1.5 million barrels per
over the11 million barrels per day it is already pumping, and can add a
further 1.5m b/d in production capacity by the end
of 2009. They have previously claimed an ability to raise the capacity
beyond 11 mb/d by 3 mb/d in the "long term".
2005 - (april) BP, the worlds second largest publicly traded oil
company, unsuprisingly, reports a record first quarter (Q1) profit. Oil
prices were 53% higher than for the same quarter last year. Exxon Mobil
(largest publicly traded company), BP and Shell (#3) together made
$US16.5 billion profit in Q4 of 2004.
2005 - (april) A BP spokesman says "The world holds enough proved
reserves for 40 years of supply and at least 60 years of gas supply at
current consumption rates". If the sentence is broken into two parts - "The world holds enough proved reserves for 40 years of
supply" and "The world holds enough proved
reserves for... at least 60 years of gas supply at current consumption
rates", then true; but it obfuscates the real issue. There is not
enough production capacity to
supply oil at the rate the market demands at the price the market
demands, and no new large high capacity fields have been found, or will
be found. BP must be well aware the crisis is in pumping capacity to
meet demand, not absolute
potential supply over time.
And gas, of
course, will be in high and increasing demand as smaller
gas fields run out and electric generation plants look around for new
gas in a world where piplines are non-existant, inadequate, and/or in
need of repair - not to mention insufficient specialist LNG transport
ships and too few or non-existant LNG terminals. In short, "current
consumption rates" of gas will skyrocket, making the prospect of it
lasting 60 years quite risible.
2005 - (april) BP announces its production from key fields in
Alaska is "flat", and from its North Sea oil properties "is declining
somewhere between 6 and 8 per cent". This represents around
150,000 - 200,000 barrels a day less. It's stake in Russian
TNK-BP and its new output from Azerbaijan have different (unspecified)
2005 - (april) Exxon Mobil announces a 44% increase in profits for the
first quarter. Its shares lose 4 cents. Why? Because it also reports
its total stock of oil-equivalent hydrocarbon reserves have fallen by
5% (older larger fields are depleting, newer ones tend to contain less
reserves than the 'rich pickings' of earlier decades - an overall nett
loss of reserves).
2005 - (april) CEO of the Royal Dutch/Shell Group claims "...contrary
to what some commentators say there is plenty of
oil and gas left.", but goes on to admit it is not in 'traditional'
locations (the only 'tradition' is to produce from the biggest and most
accessible fields with the greatest production
capacity first ), and in unconventional oil
(tars, shales, igniting coal mines to generate methane). He says cost
of recovery of these sources has halved. All true, with caveats. None
of these sources will equate to the current oil demand, or even come
close to it. It may be there - but it simply can't be produced at the
rate and the price the world wants.
2005 - (april) Shell produces 78,000 barrels a day of oil from oil
sands in Q1, a 5% decline on the amount produced in Q1 2004.
2005 - (april) Shell report crude oil production has fallen by 8% to
2.14 million barrels a day, and natural gas production is down by 2%.
2005 - (april) USA lower 48 states (without Alaska) depletion rate now
nearly 2% per
year; natural gas demand has also been
increasing by 2% per year. In spite record levels of drilling, and
drilling in technically difficult and expensive locations, US domestic
natural gas supplies are near the point of supply shortfall. Newer gas
strikes have been smaller, and have a shorter production life.
2005 - (april) study of the aggregated first quarter
reports of 8 major publicly traded oil companies shows a decline of
2.8% in production compared with the previous year. This amounts to
304,000 barrels a day. The Government owned oil companies (responsible
for the greatest amount of oil traded) do not make public reports, so
their decline rate is not as easy to estimate.
(april 4) jet kerosene trades at a record high of $US76.
2005 - (april) The International Air Transport Association (IATA),
representing 270 airlines, estimates fuel costs may rise by 20%. Fuel
costs make up between 15% and 40% of the total operating expenses of
2005 - (april) China Southern Airlines increases passenger
to 28 million, a 38% increase, but in the face of a 66% surge in its
fuel costs for the last half of 2004, makes a loss. IATA estimates that
if oil averages $US43 a barrel, the industry worldwide will accumulate
losses of $US5.5 billion this year.
2005 - USA Delta airlines loses a billion dollars in the first quarter.
It has over 3 billion dollars of employee pension liabilities from 2006
to 2008. Delta wins court approval to be relieved of its pension
liabilities under a bankruptcy type proceeding.
2005 - With fuel costs high and competition intense, USA's
United Airlines also moves to bankruptcy actions and defaults on its
pension plan - the largest ever US pension plan default. The USA
government Pension Benefit Guaranty Corporation picks
up the cost.
2005 - with General Motors still producing gas guzzling SUV's, costs
outweigh income and the pension plan (whose investments provide a very
large part of GM 'income') is unable to pay $US17 billion of its
obligations. Default is possible, and may mark a trend in
cheap-oil-dependant USA industries.
2005 - Americans, with more vehicles
(around 210 million) than there are licenced drivers, drive an average
of 12,000 miles a year at an average US
inefficiency of 3.2 kilometers per liter (20.8 miles per gallon).
2005 - (april) UK truckers
and farmers protest outside the UKs largest
refinery over the price of diesel,
risen by about 60% in the last six months. Protesters say they were
threatened with arrest under the contentious new anti-terrorism laws.
2005 - (april) crude oil spikes
to US$58 a barrel.
2005 - (april 15) Colin Campbell, addressing Swiss financiers prior to
the Peak Oil conference, estimates global peak oil -
"About 944bn barrels of
oil has so far been extracted, some 764bn remains extractable in known
fields, or reserves, and a further 142bn of reserves are classed as
'yet-to-find', meaning what oil is expected to be discovered. If this
is so, then the overall oil peak arrives
2005 - (april 26) Peak Oil
UK conference in Edinburgh predicts prices for crude hitting $US100 per
barrel by 2010.
2005 - (april 26) Matthew Simmons, pointing to the unreliability in oil
by governments ("Our data collection system for oil is rubbish") claims there is "a big chance" that Saudi Arabia
actually peaked in production in 1981 and is now in decline. He
commented that if that were true, most major fields are being over
produced. If fields are over produced that can be damaged.
If damaged, their
original 'probable recoverable oil' estimates are too high.
2005 - (april) The USA Governors Ethanol Coalition
(GEC) promotes the desiderata of producing at least 10% of US
transportation fuel from ethanol and biodiesel as soon as possible.
Almost all ethanol production in the USA at the moment is from
taxpayer-funded corporate welfare corn (maize) production. More gas and
oil energy is consumed in producing the fuel than the ethanol so
produced contains. The GEC promotes a small proportion of the ethanol
to be derived from the digestion of crop waste - high cellulose corn
stems, wheat stems sawdust etc - by organisms that can digest cellulose
and produce alcahol as a by-product (in the same way yeast digests
sugar and produces alcohol as a waste product).
This technology is experimental. Whether the cost of harvesting and
transporting the waste, distilling the ethanol, and removing the sludge
results in a nett energy loss or gain is yet to be determined.
2005 - (april 27) Bush calls for fast
tracking of new LNG terminals, as
the existing 4 in USA are inadequate for the fast increasing dependance
on imported LNG.
2005 - (april) West Australias $11 billion
Gorgon gas project finds a buyer for 2.5 million tonnes of
Gorgon LNG (liquefied natural gas) a year in USA, with the gas to be
shipped to a currently non-existant terminal on the west coast.
2005 - (april 27) Bush calls for fast tracking of
new specialist oil refineries to handle the poorer crudes now being
produced by Saudi Arabia.
2005 - (april 27) Bush calls for fast tracking of
new nuclear power plants, tacit admission the 20% of electricity
produced by nuclear cannot replace demand as gas-fired stations have an
increasingly squeezed supply.
2005 - (april 27) Bush calls for extending the
fuel-efficient cars to
“clean diesel” vehicles, a tacit admission that modern
diesels are highly efficient and affordable
now, and fuel cell hydrogen cars are an expensive unrealistic fantasy.
2005 - (april
29) crude oil imports into USA reach 10.9 million
barrels per day - the third highest daily import rate ever recorded.
Stored crude peaks at 327 million barrels - only around 2 million
barrels of storage capacity is left unfilled. This is the highest
levels in 6 years. This huge extra capacity filling has kept world oil
pumping capacity near its limit. The stores will see the USA over the
summer holiday 'touring season'.
2005 - USA now imports almost 60% of its oil consumption. At current
crude prices this costs about a
billion US dollars a day.
2005 - (april) Chinas monthly imports of crude oil reach a new
of 2.99 million barrels a day for april (12.25 million tonnes for the whole month).
2005 - (june) Fu Chengyu,
General Manager of China National
Corporation says in a news article the State Corporations annual import
of LNG in 2010 is expected to reach 30
million tons, equivalent to rough 3 million tons of oil per month. This
figure is expected to double by 2020, to about 6 million tons of
oil per month. Most is from long term (20-25 year) 'take or pay'
large-quantity contracts with Australia and Indonesia. China is trying
to substitute for oil, and 'lock in' foreign LPG at a relatively low
price while it explores its own coastal areas for gas over the next
decade. It is aware of the relatively long lead time to bring in gas
fields and their associated infrastructure.
2005 - (june) decision on whether or not the US west coast Longbeach
LNG terminal will be permitted is delayed
(april 29) Ahmed Chalabi, described as "the pentagons
darling", is named as oil
by Iraqs pro-US Kurdish president.
2005 - (may
9) Algerian oil minister comments that OPEC will be unable to meet
demand at current levels in the 4th quarter of 2005. Expected northern
hemisphere winter demand can only be met if strong
have been built up already in the importing countries before winter,
that is, in the third quarter. Look for a 'run' on crude starting
2005 - (may) The
International Energy Agency says 84.75 miilion barrels a day of crude
were produced. This is likely to be 'all liquids - crude plus natural
gas liquids plus oilfield condensate.
2005 - (may) The
U.S. Energy Information Administration (EIA), calculating with updated
figures in 2007, show the all-time global peak of production for crude
plus natural gas liquids (excluding condensate) occured this month,
when 82.08 million barrels a day were produced.
Looking back from the 2007 perspective, the all-time global high for
crude oil alone was 74.272 million barrels a day.
2005 - (may)
The EIA, calculating with updated figures in 2007, show
the all-time peak of production for crude oil plus condensate
(excluding natural gas liquids) occured this month, when 74.15.08
miilion barrels a
day were produced.
2005 - (may) gasoline futures for
november delivery trade on the Tokyo
Commodity Exchange at about $US65 a barrel.
2005 - (may) Algeria is producing near full
capacity of around 1.4 million barrels per day.
2005 - (may 2) French energy economists at the French investment bank
Ixis-CIB speculate that crude oil might reach $380 by 2015. They base
this speculation on the ideas that crude prices increase nearly
seven-fold, and annual inflation is 2.5%. However, at a
certain price point recession
will likely tip into deflation, due to
lack of demand caused by marked collapse in industrial activity. So the
2.5% inflation may just as likely be 2.5% deflation. In addition, at a
certain level of bankruptcy, it will be difficult to re-capitilise and
re-open small businesses that have failed. Thus, it may be that demand
for oil is simply lost, almost at any price. At least, for a decade or
so. Demand might slowly recover on back of stable 'lower' prices, until
finally oil prices increase again. The economy can be compared to a
punch drunk boxer. It takes a heavy hit in the first round (peak oil),
but it won't stay down, it will get up off the canvas. But before it
can 'return to form', it is knocked down yet again as oil prices once
more rise. Each time the economy is laid out, its stays down for longer
before struggling to its feet. Eventually, it cannot get up at all. At
that point, the boxer analogy is no longer useful. We should then be
thinking of metamorphosis, of the total re-organisation of all systems
by the quiescent pupa, before finally emerging once again, but in
radically changed form.
2005 - (may 3) "It's too late to maintain a 'business as usual'
attitude. What is
required is to manage the change that peak oil will bring in a way that
causes the fewest casualties. This must be done at an economic and
geopolitical level, to fend off resource wars. The US invasion of Iraq
is clearly a resource war" - Richard Heinberg, author of 'Power
Down: options and actions for a post-carbon world'.
2005 - commentators note that the US Federal reserve will have to
raise interest rates or live with inflation flowing through from higher
oil prices. If rates rise, the hugely indebted western consumers (and
particularly American consumers imprudently loaned money) would not be
able to meet monthly repayments or afford to roll-over loans. The
consequence would be bankruptcy, recession, cut back in spending,
unemployment. Petrol prices may fall with reduced
consumption, but this is poor consolation to the unemployed..
2005 - USA conventional natural gas production has now fallen
35 billion cubic feet per day, or 6.3 million barrels of oil-equivalent
2005 - (may) Bolivia, with the
second-largest natural-gas reserves in the western hemisphere (behind
Venezuela) has a law introducing a 32% tax on
foreign energy companies earnings on top of an existing 18% royalty
blocked by President Carlos Mesa.
2005 - (may) Bolivia has a law partially nationalising
its gas and oil - currently operated by 12 foreign firms - blocked by President Carlos Mesa.
- (may) USA sells 'bunker buster' bombs to
the only Arab
nuclear power - Israel
- apparently in preparation for them to
Iranian nuclear research facility, and possibly to destroy Irans
conventionally armed ballistic missiles. Pakistan and North Korea,
with unstable governments and proven
to have weapons of mass
destruction, are left untouched.
Neither has significant oil
reserves. US coercion of Iran is unlikely
to seriously affect oil prices. This 'news' item may, of course, be
'planted' USA disinformation to dissuade
from supporting the euro.
2005 - China announces its 20 year
plan to seize a " window of
opportunity" to develop its economy and industrial base as fast as
possible for the good of its people. Why is the window open for only 20
years? Presumably it knows the peak of oil has been reached, but has an
optimistic scenario of 20 years, rather than the more realistic
optimistic scenario of 10 years.
2005 - (may) China, just before the anniversary of its mass murder of
protesters in Tiannamen Square signs a $US600 million oil deal with the
criminal president of Uzbekistan, Islam Karimov - fresh from murdering
hundreds of Uzbek protesters.
2005 - first quarter - The
Asian benchmark Singapore fuel oil prices
increase nearly 50%. China allows only 4% price increase in domestic
diesel prices. Clearly, China is willing to hide the true cost of fuel
in order to artificially subsidise business. This shields businesses
from the need to be more fuel efficient, and make the inevitable
recession, bankruptcies and adjustments much steeper than they would
have been if part of the true costs of doing business in China was not
artificially kept off the accounts.
2005 - (may) - Norway, the worlds
third largest oil exporter, cuts its
forecast for 2005
oil production (inclusive of natural gas liquids), from 3.3 million
barrels per day to 3.2 million
barrels per day, due to 'technical glitches'. This is the same level as
2004. Total oil production is expected to rise until 2006, and then
decline. Norway is west Eurasias largest gas proucer. Gas production is
expected to increase, peaking in 2011 at 120 billion cubic
metres per year, then declining.
2005 - Iran's
Ahwaz Bangestan oil fields production has now declined
from 250,000 barrels a day to 160,000 barrels a day and is expected
fall to 60,000 barrels a day within 1-2 years. Gas
injection could increase production to 220,000 barrels a day, but gas
is heavily used by the 67 million Iranians to spare oil for export and
sell to generate overseas earnings to feed a wheat dependant nation
with an exploding population.
2005 - Iran's oil production
capacity is falling by 350,000 barrels a day
every year (8% onshore and 13% offshore). Iranian officials estimate
the decline rate could increase to 500,000 barrels a day every year in
5 years time. Iraq currently produces about 4 million barrels per day,
but imports petrol and diesel as it has little refinery capacity.
2005 - (may) Algerian oil minister identifies a refinery capacity
limitation co-inciding with demand closing with supply
the use of having a lot of oil if you can’t
or cannot stock
enough products to be used in the winter time...
can build a refinery in two years and people have just barely started
taking decisions this year. Saudi Arabia, and others, including Libya
and ourselves have taken decisions so you are going to see a lot of new
refinery capacity but not within the next two to three years...”
(Gulf Times, Qatar, 9th may 2005)
2005 - the estimated cost of building a new 150,000 barrel a day refinery
in USA is around $US1.5 billion. Up to US$1 billion more is needed for
pipelines to bring the crude from the port unloading facility.
2005 - World refining
about 84 million barrels per day.
2005 - World consumption
is now about
84 million barrels per day. The first tier bottleneck to producing the
oil the world demands is pumping capacity. Unexpectedly, the
second tier bottleneck, refining
displaces pumping capacity as the primary bottleneck to
meeting world demand.
marginal refining capacity in the world cannot process
crudes at all,
let alone process these crudes into light, sweet
products. Converting existing refining capacity to process heavy, sour
crudes to produce light, sweet products is expensive and
time-consuming. In the U.S., the conversion (for the refiners who are
converting) is a multi-year, multi-billion-dollar project. Some
refiners have elected to produce light, sweet products only from light,
sweet crudes. Others have elected to retire refining capacity. In parts
of the world that supply markets with only higher sulfur products or
that have dropped out of the market to supply low-sulfur products,
little or no conversion will take place and the demand will continue
for the diminishing
fraction of light, sweet crudes.
-Harry Chernoff, in the Energy Bulletin
The 'marginal refining capacity' is mostly older refineries without the
'cracking towers' required to split the heavier crude down into lighter
oils. In some countries these refineries cannot by law add new cracking
towers unless they also
upgrade their entire system to effectively remove most of the sulfur.
This extensive upgrade of small-throughput plant is not economically
justified. The timing-trajectory of global conversion of large plants
to process heavier crude is not yet documented. Even if in time most of
the worlds largest refineries convert to be able to handle any grade of
crude, 'heat-cracking' the heavy crude burns oil to fuel the process -
thus hastening oil depletion. This may not have been factored into
calculations of cheap oil depletion curve.
2005 - around 8% of the oil being produced (and about 24% of all oil
reserves) every day is sweet oil.
2005 - World consumption, on current trends,
expected (want) to be
86-87 million barrels per day.
2005 - USA now consumes around 20 million barrels of world oil a day.
2005 - (may) US military announces it is planning "more
permanent" bases in Iraq, and sees itself remaining in Iraq for
2005 (may) - Italian Benito Livigni, former manager
of the Italian energy company ENI and the United
States’ Gulf Oil Company, claims that Iraqi’s oil reserves are
estimated at 400
billion barrels, far more than the known figure of 116 billion, and
giving it more reserves than Saudi Arabia. The figure include
under-explored areas, and there is suggestion some data of Iraqs oil
potential has been held by oil companies since the 1970's, but kept
true, this information would likely to be known within the higher
levels of the American
2005 - (may) Azerbaijani
newspaper reports US and Azerbaijan have agreed to a permanent
US base in the Azerbaijan (strategically
important to USA for its oil and gas pipeline). The Azerbaijan government denies it.
2005 - (may)
the 1,762 kilometre long Baku-Tbilisi-Ceyhan
pipeline (BTC) opens,
due to be exporting 1 million barrels of oil a day from the
city (Baku) on the Caspian Sea west to Georgia (capital city Tblisi),
through Georgia, then
south and on to the Turkish terminal (Ceyhan) on the Mediterranean. The
been around $US3.6 billion dollars, the world's biggest energy
investment so far. Filling the pipeline with oil will take about 5
months as 10 million barrels of oil are needed to fill it. The pipeline
is buried, and while it is relatively safe from
disruption during the on-going border disputes and other conflicts in
the area, Turkey, in particular, is prone to earthquakes which could
damage part of it. Most importantly of all, it is the only pipeline
from the Caspian oil fields that doesn't have to go through Russian
2005 - (may) Russias
daily oil production, believed by analysts to
be likely to increase by 370,000 barrels a day (a 4% increase over
previous years) is now estimated to increase by 230,000 barrels through
2005 (a 2.6% increase). For a variety of reasons, it is no longer
expected that there will be any increase in supply in 2006, although
Russian oil is not yet considered to have peaked. Russia now exports
around half its oil production, almost entirely to West Eurasia, and
the proportion exported is slowly increasing.
2005 - (may) analysts suggest the claim by Saudi officials that they
are producing 9.5 million barrels a day may be false. OPEC estimates -
based on secondary source - put Saudi production at 8.39 million
barrels a day. The International Energy Agency puts it at 8.14 million
barrels a day, a 34 million barrel a day difference. The difference is
very important because the world is increasingly reliant
on the one
producer that can pump in high volume - Saudi Arabia. The oil 'crisis'
is a pumping crisis right now - and an absolute depletion crisis in 20
years or so. The difference is more important because there is no
transparency in the Saudi figures. Saudi Arabia is not a modern
democracy. It is an absolute autocracy, a feudal state run by absolute
power, and the use of torture. No wonder figures are suspect. Real
production must be inferred from the number of ships leaving Saudi
ports and their capacity, or even from 'tips' from insiders. The
difference may simply be the margin or error. Even if the Saudi regime
is telling the truth, it may be the amount they have available to the
refiners, not the amount the refiners buy. Why would there be a
discrepancy? It may be that the extra production is in high sulfur
crudes which few refineries can handle.
2005 - (may 31)
Iran's OPEC governor, Hossein Kazempour Ardebili says
in an interview that in summer refineries want light crude, which is
easily processed into gasoline for the 'summer driving season', but
OPEC is at the limit
its capacity to produce light crude, and there is simply no more light crude
pumping capacity available. "All extra levels of crude oil sent
to the market stay in the oil
stockpiles, since the crude oil coming to the market now has got
refinery demand". This 'extra'
oil fills the oil stockpiles and
the statistics on oil that has been produced, but the 'extra'
production is functionally useless due to lack of refineries to deal
with this type of heavy or sulfurous oil.
2005 - (june) Iraq will not be able to pump more than its existing
production of 1.5 million barrels a day for at least the rest of this
year. It had been hoped to produce an additional 300,000 barrels a day.
2005 - (june) USA first quarter vehicle sales reveal a fall of 13.5% in
sales in the petrol-guzzling 'sports utility vehicle' category.
2005 (june) US airlines are estimated to be losing about $US17,000 a
minute, partly due to the increased cost
of fuel. More job
losses are predicted.
2005 - (june) Matthew Simons suggests, in his new book, that Saudi
giant fields started losing pressure in the 1960's and have been so
heavily pumped with water since that the sustained pumping capacity is
an artifact of pressurisation, and the depeletion rate is thoroughly
hidden. He suggests the wells are in effect being 'secondarily'
produced at the same instance as being primarily produced. While this
is unknown territory, he point to the possibility that some of these
large Saudi fields could suffer a precipitous collapse in production,
rather than a stepped decline. He estimates the highly production North
field would then have to have every oil drilling rig in the world
working it over a ten year period to sustain current production. North
Ghawar produces about 4.5 million barrels a day.
In addition, he suggests the two Iraqi giant fields ( Kirkuk and
Rumelia) have been overproduced and may be in similar shape to the
The supergiant Cantarell complex in Mexico is highly pressurised with
nitrogen gas, and is currently producing around 1 million barrels a
day. If its projected steep decline is earlier than forecast,
and if Ghawar collapses, then shortfall in pumping capacity may be
larger than anyone may have previously projected.
2005 - (june 17th) U.S. gasoline consumption
jumps to 9.53 million barrels a day - the third highest level on record.
2005 - (june 21) US Energy Department's Energy Information
Administration reports that crude inventories in the USA declined last
week by1.6 million barrels over historic levels for the time of year;
and yet demand for distillate fuels (petrol, diesel, and heating oil)
was nearly 7% higher than the same time a year ago.
2005 - (june 22) Speculators trading on future oil supplies push the
price of Brent crude to an historic high of $US58.58 per barrel.
- (june 22) Oil for July
delivery reaches $US59 a
2005 - (june 22) Dow Jones Industrials fall 1.5%, Nasdaq composite and
Standards and Poors 500 indices fall about 1%, US Treasury 10 year junk
bonds are less palatable and are sweetened with a 0.009% interest rate
2005 - (june 22) branch company of the Chinese state owned oil company China
National Offshore Oil Corp makes an unsolicited
bid of $US18.5 billion for the USA oil company Unocal Corp. China continues its apparent strategy of carefully
reducing its huge store of US dollars while simultaneously acquiring
oil and gas assets. In this case, even although the price of the bid is
close to the current asset value of the company, it would assist in
small measure in putting some 'spine' in the 'yuan' (pegged by
China to the dollar in order to make oil imports as cheap as possible
while also making Chinese exports cheap), and allow China to denominate
some oil trading in the yuan, not the dollar. The US Government will
almost certainly pass laws to block Chinas acquisition, as it is a then
wedge between the dollar and its oil backing.
2005 - (may 31st) China's government backed 'Sinopec Group' buys
40% of the
Northern Lights oil sands project in northeastern Alberta. The project
has a capacity to produce around 100,000 barrels per day of synthetic
crude oil, at an estimated total cost over five years of $4.5 billion.
2005 - (april) Canada's Enbridge Co and China's PetroChina
International Ltd agree to jointly build a
$2.5-billion 400,000 barrels per
day capacity pipeline1,160 kilometres across Canada - from Edmonton to
a port in British Columbia. It will carry synthetic crude oil from
oilsands. Half the crude would be tankered to China, the rest will
probably be sold on the west coast North American market. It is
expected to be ready by 2010, when it expects Canadian oilsand
production to be sufficiently high to enable the pipelines use.
2005 - (june 20) - Indonesia finally cuts an acceptable deal with USA's
ExxonMobil to move ahead with the Cepu oil project, expected to
ultimately yeild 500 million barrels of oil over the life of the field.
This field will make little difference to the overall decline
profile of the ExxonMobil global oilfield holdings.
2005 - (june 20)
- Indonesias market-distorting taxpayer
the price of oil cause a massive blow-out in the subsidy budget as oil
price rise rapidly. The cost to the taxpayers is estimated to reach
$US11.4 billion this year - a sum that could only be met by debt. The
Indonesian government says it will institute unspecified "measures" to
reduce fuel consumption. It could start by removing the subsidy, a
subsidy that is a form of corporate welfare to the oil companies.
2005 - Indonesia - an estimated 105 tonnes a
month of Indonesia's heavily subsidised crude oil and oil products are
smuggled out to countries China, Thailand, and other Asian countries
for re-sale at closer to world prices, reaping handsome profits for the
2005 - (june) Taiwan's
'Chinese Petroleum Corporation' signs a
25 year LNG supply contract with 'RasGas' of Qatar, with the 3 million tonnes
per year to commence delivery from 2008. Like many countries, Taiwan is
increasingly reliant on natural gas for generating electricity, but it
is concerned over reliability
of supply. The Taiwan government needs triple the amount of LNG it
currently uses to power electricity plants recently built and being
planned for completion by 2010. It's new Tatan LPG terminal will be
complete in 2009, increasing Taiwan's import capacity from 4.5 million
tonnes today to 7.5 million tonnes.
2005 - (june) About
300 billion cubic feet a day of natural gas is used globally. LNG
demand has increased 15% since 2000 as demand outstrips gas both from
domestic wells and the supply capacity of pipelines from other
countries. Because of this, demand for LNG shipped by tanker is
expected to rise to about 20 billion cubic feet per day by 2010 (about
125 million tonnes per year).
2005 - (june) India
signs a deal with Iran to pay $22 billion for 5 million tons of
liquefied natural gas (LNG) a year for 25 years, starting 2009. India
signs a memorandum of cooperation to construct a $US7 billion,
2,600-kilometer long gas pipeline from Iran to India through
2005 - (june) The
Shanghai Cooperation Organization (SCO) holds its summit meeting in
Astana, Kazakhstan. It ignores an American request for observer status,
and agrees to consider Iran, India and Pakistans requests to join the
organisation. The SCO organisation, whose Central Asian members are
oil-rich Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan call on the
USA to set a timetable for the withdrawal of all American troops from
Central Asia. China and Russia are the other members. Azerbaijan, allied to USA and
European oil companies via its pipeline terminus, is not a member.
Additionally it ignored an American request for observer status and
proceeded to consider requests from Iran, India and Pakistan to join
2005 - (june) Agreement is reached to a multi billion dollar investment
in re-working the declining Statfjord
This will allow for both relatively high oil and gas production levels
to be maintained for longer and for maximal extraction of oil, gas and
condensate - but will result in an accelerated decline in the
daily production of the oil component of the hydrocarbon reserves in
2005 - (june 22) oil prices
briefly reach $US60
2005 - (late june) regular grade petrol at the pump in Canada ( a nett
oil exporter) is now about 92 cents a litre.
2005 - (june) Diesel
prices in USA reach a record high of
$US2.34 a gallon. The average large
freight truck does about 6 miles to the gallon. A truck may travel 500
miles a day, and with a co-driver, around 900 miles a day. In the
trucking industry, fuel is the second highest expense after wages and
salaries. Two thirds of freight in USA is transported by truck, burning
35 billion gallons of diesel a year. Distillate in USA is generally
expected to rise about 2 to 2.5% a year. Combined petrol and diesel
consumption has been nearly
than for the same period in 2004.
2005 (june) U.S.
gasoline consumption reaches a new record of 4.4 million barrels a day
in mid june, reflecting a 5.7% increase in petrol consumption relative
to the same period last year. Clearly the price of gas is not yet high
enough to "destroy
2005 - The average vehicle
in the USA domestic vehicle fleet has now
achieved a fuel efficiency of 21
miles per gallon.
2005 - (june 30)
project to recover the last of the oil from the large
but low producing Masjed Soleiman field in Iran (currently producing
only 5,000 barrels a day) is sold to China, with Iran receiving 15%
share. It is hoped to raise production to 28,000 barrels a day, and
supplemental wells might add 10,000 barrels a day to that. The contract
was originally with a Canadian company, but the USA government forced
it to withdraw.
2005 - (july 2) Japan
becomes aware that its oil economy is fading, and
money cannot substitute for actual supply based on relationships and
goodwill (China's strategy and a part of USA's strategy), or a gun to
the head (the other part of USA's strategy) - "Japan will not be able
to survive an energy war unless it breaks from an idea that was valid
until several years ago, in which it was believed Japan could cope with
surging oil prices by growing economically strong enough to pay more." -Yomiuri
2005 - (july 3) In an
historic first, a specialised LNG tanker berths
at the United Kingdom's new National Grid LNG terminal (owned by BP and
Algerian State Oil and Gas) in Kent with a
cargo of 31 million cubic
metres of liquid natural gas from Algeria. This is the first time the
has imported LNG in 20 years. The UK's North Sea gas fields are
decline, and the Norwegian
pipeline is not yet built.
Planned capacity building does not happen as LNG is re-routed to more
lucrative markets, such as USA, which now competes on price with UK for
LNG. About 80% of UK
LNG storage capacity remains unused as a result.
2005 - (july 3) Oil industry analyst and banker Matt Simmons, author of
'Twilight in the desert', says "...I still think that $60-a-barrel oil
is a remarkable bargain...we need a pricing committee to start taking a
"cold shower" look
at what the real value is. My guess is that will be somewhere between
$250 and $400. The
sooner oil users begin understanding what the real long-term cost of
oil has to be, the easier it will be for everyone to cope with
fast-rising prices for the world's highest-volume and most expensive
2005 - (july 4th) American drivers hit the road in the holiday weekend
in record numbers, in spite of gasoline being $US2.25
Adjusted for inflation, this is close to the price
during the first oil
wage workers move closer to their place of employment. Middle class
start to trade in petrol gulping SUV's for hybrid SUV's. Middle class
switch to 'the wifes' European car instead of the massive motored
American dinosaur. Some people elect to vacation 400 miles away instead
of 1,000 miles away. High mileage petrol dependant small businesses
such as garden care businesses with high petrol cost components become
2005 - (july 5th) options contracts for December delivery at $US80
(july 5th) the International Energy
forecasts global oil demand to
rise to a
barrels a day in the last quarter of 2005 (i.e.
31,536,000,000 barrels a year, or 4,288,896,000
crude) This now
aligns with more informed analysts early
prediction, and makes a shortfall in ability to pump the
demanded motor spirits very
likely early in the new year 2006, or earlier if
there are significant weather
disruptions to refineries
or if there are 'unexpected' changes
in pumping performance of Saudi
(july) India loses several thousand barrels a day in oil production
when the off-shore
at the Bombay North High sector of the Bombay High oil field is
destroyed. The Bombay High oil field is India's sole large oil field.
Only one third of Indias total oil consumption is produced by its own
oil resources, currently estimated at 5 billion proved barrels. Of
those domestic resources, the Bombay High field produces more than a third of Indias
total oil production. Bombay High
produces 170,000 barrels of sweet light crude oil a day, contributing
14% of Indias annual domestic consumption. The field had been in
decline until it was 'redeveloped'
(pressurised). The fire will set back the completion of
of the North field by about a year. One estimate has Indias oil needs
increasing by a massive 60% by 2010, 1,392,700,000 barrels a year.
Current global oil consumption is 30,660,000,000 barrels a year. In
1999 the USA alone used 6,205,000,000 barrels a year.
2005 - China's oil
consumption for this year is projected by
commentators to be 2,272,300,000 barrels for the year, or 6.2 million
barrels a day. At this consumption level, 2.6 million barrels a day
will now have to be imported, 6% more imports than last
2005 -China estimates it will need 600 million tonnes of oil by 2020 if
present growth rates continues. This is far higher than officials thought.
2005 - China's oil
imports for the first half of the year are up by 3.4% over the huge
increase for the same
period last year.
2005 - (july) China is desperate
to meet a looming domestic oil
shortfall exacerbated by industry needing to use diesel-burning
generators due to China's unreliable power supply. An agreement is made
with Shell oil to form a joint venture to develop a successful method
to extract organic matter from shale rock in the northeastern
province of Jilin. This can then be converted to oil via a very energy
expensive process. The shale-oil reserves have a proven 17.4
billion tons of oil equivalent, with a supposed ultimate potential to
yeild 300 billion tons.
(july) China reduces its refined product (petroleum and fuel oil)
imports by 3.4% relative to the 2004 period. Presumably it is in part
due to having directed
its state owned refineries not to export crude oil, and
also to sell petroleum to the domestic market at
well below world prices.
2005 - (july) China's
refinery in Fujian will be expanded by engineers from ExxonMobil, Saudi
Aramco and Sinopec to raise its capacity from 80,000 barrels a day to
240,000 barrels a day. More importantly, it will handle heavy Middle
East crudes, unusable by many world refineries.
2005 - (july) The G8 summit is dominated by discussions on energy,
despite a terrorist bombing in UK and ceaseless terrorist bombings in
Iraq. The only 'good news' is a commitment from Russia to "build up its
pace of oil production and its volumes of oil exports...". Russia
to be able to increase
oil production by an additional 30 million tons, or about 602,465
barrels a day. For the
moment. The G8 also established the 'Joint Oil Database Initiative'.
This database is supposed to give accurate monthly data on the oil
inventories, supply, and demand in 93 countries. The International
Energy Forum, in charge of the database,
delays issuing the first iteration until
November. Why? "Difficulties" in obtaining accurate
2005 - (july) Indonesias state-owned
oil company Pertamina finds it difficult to pay
its oil bill, limits
distribution to gas stations to conserve existing reserves. Gas
stations run out and close. Now a nett importer, OPEC members may eject
Indonesia from OPEC.
2005 - (july) Malaysian Prime Minister admits they will soon be in a
similar position "Malaysia is an oil exporter, but if we do not
find new oil
reserves, then by 2009, we will become a net importer". Petronas, the
Malaya state-owned oil company, is exploring for oil in concessions in
various muslim countries overseas.
2005 - (july) oil
drilling expertise remains in short supply as the
impetus to find any available gas and oil accelerates. Chinese drilling
crews and rigs are brought into the United States for the first time as
insufficient rigs are available domestically.
2005 - USA natural gas prices are now about four times higher than
three years ago.
2005 - (july
13) gas for delivery in January 2006 to the UK trades at £1.07
per therm - the
equivalent of $US18.65 per million Btu, or in crude oil
equivalent, $US108 a
barrel. The price
reflects the expectation of high oil prices in
Europe for the rest of 2005, and the fact that the UK will be a nett
gas importer by 2006. Spring-summer water accumulation behind hydro
dams has been poor this year, forcing increased reliance on gas for
electricity generation. The lack of water has also reduced nuclear
power plant output, as nuclear plants are major users of water.
2005 - (july) PetroCaribe
Energy Summit, in which Cuba's dictator Fidel
Castro notes that within this decade oil will reach $US100 per barrel,
prohibitively expensive to impoverished Caribbean countries. A treaty
is signed in Venuezuela whereby
185,000 barrels a day of discount priced oil from Venuezuela will go to
financed by low credit rates. If oil reaches $100 the interest rate
will be 1%.
2005 - (july) in a clever device
to limit petrol consumption under the
guise of concern for 'global warming', the British Government announces
the idea of introducing a form of energy rationing called a “personal
carbon allowance.” This allows each person in the country a private
'carbon allocation' which in turn allows a certain amount of 'free'
vehicular use. Each litre of gasoline uses 1 carbon unit, and this is
then deducted from the free allocation in the citizens' 'account'.
Those who exceed their alloted carbon entitlement
through fuel use pay a tax. Alternatively they can buy someone elses
underused allotment on the free market. Thus, those who use public
transport are not penalised, and those who are profligate petrol
wasters pay for the privilege.
- (july 8th) USA Secretary of Energy Samuel Bodman tells reporters
major oil suppliers including Saudi Arabia
"are right at their ragged edge" in regard to their ability to meet
rising global demand for oil. "We are in a new
situation... we are likely at least in the near-term to be
dealing with a different pricing regime than we have seen before." This
is US Government fog-speak for "the price of gas is going to go up
dramatically and there is nothing the
government can do about it". From
now on, the US government will be increasingly forced to admit the
truth that it is bankrupt of ideas to meet the gathering crisis - a
crisis it has long
known was on its way. It will doubtless try to 'unload' the problem
onto the public by hypocritically and duplicitously appealling for
"everyone to work together to face this new challenge".
2005- (july) - According to a
USA government report (GAO-05-876
'Rebuilding Iraq'), after it's 2003 invasion, the USA
found the electricity, oil and refinery facilities had been damaged
more than the white house and military officials planned.
Iraqi oil exports account for 90% of its income.
Iraq’s crude oil production and export capacity are now lower than in
Iraq’s overall power
generation is now lower than before the 2003 invasion.
$US9 billion of US money has been
paid since the USA 2003 invasion for supposed administration and
Of the $US9 billion
appropriated for Iraqi reconstruction, only $US3.1 was actually spent on what might
generously be called reconstruction. The rest, $5.9 billion went to USA
contractors, government occupying agents, and allied Iraqi employees
and 'favored sons'. About
$1.2 billion has been diverted from water and
electricity restoration in
favor of "economic and
private sector development and governance activities". Presumably
privatisation of oil and gas facilities. And presumably to pay for the
Iraqi domestic terror agencies - proxies of the CIA - modelled on the
to know' system protecting the officers of the occupying power (and
the commander in chief of the military) from indictment for torture and
murder (albeit USA refuses to sign the Geneva Convention banning
torture, and refuses to recognise the World Court responsible for
bringing those committing crimes against humanity to justice).
An estimated $US20 billion is required to fully reconstruct the damaged
Iraqi power infrastructure. $US1.7
billion has been spent. The
greatest part of the $US1.7
billion spent on generation projects went on buying new turbines and
generators (from the USA contractors) for existing Iraqi power
plants, in order to increase megawattage
available to the grid to bring it close to what it previously was. The US
electricity project contractors have supplied "several" natural gas
powered power turbines where there is no natural gas available to drive
them. Natural gas pipelines
have been made
extremely insecure due to sabotage post-invasion. Low grade fuel-oil has had to be
decreasing output by 50%, and trebling maintainance needs. Worse, the
contractors admit there
is a significant risk the turbines could fail.
Many Iraqi power plants
run on crude oil or diesel. Shortages of refined product will seriously
impact the ability of Iraq to supply its electricity needs. Iraqs
generating capacity remains seriously below the pre-war level - a level
not fully recovered from the damage
of the 1991 Gulf war. Supply remains limited and erratic. Some
electricity is now being imported from Iran. Transmission lines remain
vunerable to sabotage, and attempts to hire security staff to protect
them were abandoned after the hoped for 6,000 staff complement could
only attract 340
men. Repairs worth mentioning are confined largely to the stable
Kurdish and southern regins.
The USA has earmarked $US2.7
billion of USA taxpayer money to be spent specifically on 'the Iraqi
oil sector'. So far, $US1.1
billion has been spent, along with $US215 million of Iraqi money,
altho' the contractor has yet to put in all his bills. A priority has been restoring the Qarmat
pressurisation plant of the Rumailah
oil field (southern Iraq) to halt sliding pressure, but this has been
successful due to badly corroded and failing water pipes running to the
wells, most of which will have to be replaced. Hoped for
production increases have not materialised.
Wells in northern Kirkuk produce more residual fuel oil than
there is storage capacity, so excess is re-injected into the wells for
later extraction. This practise is considered very likely to limit the
amount of crude able to be recovered in the long term.
Other completed or continuing
projects are - repairing the
Al-Fathah oil pipeline
crossing (only half could be completed by the USA contractor), restoring a few
gas-oil separation plants in relatively stable territories near Kirkuk
and Basrah, and repairing
some natural gas and liquefied petroleum gas plants in the safer areas
of southern Iraq. The gas-oil plants take product from 15 to 50 nearby
oil wells and strip out the natural gas liquids, yeilding the
domestically important liquefied
petroleum gas used in cooking and in heating. ( LPG cannisters are
easily transported to households, and don't require localised pipeline
infrastructure.) USA contractors are being paid to repair war damaged
export terminals, pumping stations, and refineries, and, above all,
electricity supply for the oil fields and refineries.
Overall, the crude oil production and export levels
obtained from initial 'quick fixes' have not been sustained, mainly due
to sabotage of pipelines "and a natural decline in production resulting
from years of improper reservoir management". Production remains
static at about 2.1 million barrels a day (1.8 mbd from the
'safe' south, the rest from safe Kirkuk region). Of that, a nett of
and 1.6 million barrels a day of crude are exported. Most of the
remaining about 600,000 barrels of crude a day is refined to diesel,
fuel oil or LPG for
domestic use. While Iraq has a theoretical maximum refining capacity of
550,000 barrels a day, in practice it processes less than 500,000
barrels a day. Upgrading refineries to deal with heavier crude, and
expanding their productive capacity would cost an estimated $US7
refined products now costs
over $US2 billion annually. Iraq extremely heavily subsidises the
refined fuels it imports and produces, and the price of these fuels is
less than a few US cents per litre. Low cooking and heating fuel prices
are essential when per capita income is extremely low and unemployment
extremely high. Plans are in place to increase the price, but,
understandably, officials are afraid to implement them.
The inability to supply diesel for machinery for basic food production
continues. Criminals hijack delivery trucks, domestic fuel lines
continue to be sabotaged,
and the subsidised cheap diesel continues to
be diverted to both the local market (because supplies are extremely
short) and international black market (because Iraqi diesel is
extremely cheap where Turkish diesel isn't) in large quantities. To cap
it, as at may 2005, much less
than 15 days of diesel fuel stockpiles
Over 14,000 Iraqi men guard oil infrastructure - mainly the fixed
facilities. The cost is roughly $US340 million a year, paid by Iraq oil
revenues. The force is not trained or equipped to protect the
pipelines, and what attempts are made are largely ineffective. The work
of contracted emergency response oil pipeline repair teams is quickly
undone by repeated sabotage.
USA report clearly hints that the "framework" for the Iraqi oil
industry includes foreign investment and management, which we can
reasonably suppose will not be those originally
contracted to the Iraqi government, but will almost certainly be
American, probably Italian, and possibly British oil companies.
In the light of these circumstances, it seems very unlikely that -
'foreign' (USA and British) "investment" in Iraqi oil production or
exploration will be promoted by any independant
Iraqi government, no matter its politics,
(b) significantly increased production from Iraq will not happen for
the foreseeable future - unless the stable Kurdish region in the north
announces independence, and the pipeline passing close by the Syrian
border to Turkey can be protected from sabotage (attacks on the
Kirkuk-Ceyhan pipeline that
exports oil to Turkey currently cause the loss of about 200,000 barrels
(c) Iraq will probably not have enough heating fuel for all its
2005 - (July 13th) American Automobile Association's daily price
survey shows the national average for diesel
2005 - (July
18th) Refinery shutdowns in Texas and Louisiana as
precautions against possible damage from Hurricane Dennis and Tropical
Storm Cindy take around 200,000 barrels
of daily gasoline
production off the market for that period. This is a
over 4% of daily US gasoline demand.
Facilities for crude oil imports for further refining are also hit. The
biggest US petroleum import terminal - 20 miles off the
coast of Louisiana - handling the receiving and storage of 1 million
barrels a day, closes for 2 days.
2005 - (July) BP's Thunder
Horse platform, the
largest of its kind, suffers damage to its ballast tanks and list 30
degrees. Plans to commence pumping oil this
year are shelved. Thinder Horse is estimated to contain reserves of
well over 1,000 million barrels of crude.
2005 - (July) -
Europe - Netherlands - Europe's biggest refinery, Shells Pernis oil
Rotterdam, stops production of refined products (petrol and diesel) due
to loss of external power. The 418,000 barrels a day refinery remains
shut for several weeks. Pernis supplies both Europe and the export
market, including USA.
2005 - (july)
Middle East oil states continue to repratriate money
invested in USA and other western states. According to Salman bin
Dasmal of Dubai Holdings, the Saudi dictatorship alone has
moved about a third of their trillion-dollar overseas portfolio out
USA and some western countries. Muhammad
Al-Jasser, the Vice-Governor of the Saudi central bank, the Saudi Arabian Monetary Agency, announces Saudi Arabia, Bahrain,
Kuwait, Qatar, Oman and the United Arab
Emirates are planning an Arabian regional currency similar to the Euro.
The proposed regional currency could be linked to the euro, or to a
basket of currencies. As the oil producers sees the USA oil-dependant
and deeply indebted economy in trouble they are anxious not to be
caught with too many junk
bonds on hand.
2005 - (july) quote of the month - "The fed can't print oil." - T. R. Elliott.
2005 - (July 25th) China stops pegging its currency to the US dollar.
The central bank will attempt to "manage" it so it stays within a band
plus or minus 0.3% of the value of the US dollar. It 'float' within
this tiny range according to the movement of a "basket of currencies"
with the dollar as just one component. China has a tiger by the tail.
It can't afford to hang onto dollars forever. It is too scared to let
go. It is positioning itself so that it can adjust incrementally or
quickly, according to circumstance.
2005 - Peugeots
advanced diesel technology in a standard production
sedan sets new and meaningful fuel economy records. The Peugeot 407 HDi
turbo diesel crosses the continent of Australia - nearly 3,000
kilometres - and used only $A150 of fuel. The advanced diesel engine
used an average of 3.45
litres of diesel per 100kms (about 70 mpg).
2005 - Production
of the Audi A2, which achieves beter than 80 miles per gallon, stops
due to lack of demand.
2005 - (july) Honda's hybrid petrol-electric motor is redesigned
for increased efficiency and greater power output. The wheels are now
driven only by electricity at low speed ( as Toyota's hybrids always
have). The new powertrain is expected to use 5% less petrol than the
current model, which achieves a 'town and country' fuel economy
of less than 6 litres per 100 kms (about 50 mpg).
2005 - (july) In Australia, the demand for small cars rose 26%,
and the demand for sports utility
vehicles (SUV's) fell five%, and demand for large cars fell 13%.
2005 - (july) A Welsh engineering company, IMP Ltd, claims to have
invented a revolutionary new electric engine that produces 400% more
torque than any electric motor unit currently in production. The normal
bulky permanent magnets have been replaced with electric pulses
transmitted across a number of rotors. It needs no gears, produces
little heat, has greatly reduced size and weight (while being fully
size scalable) and therefore a greatly increased power to weight ratio.
The director of the company claims the acceleration of an electric
vehicle based on these motors will exceed that of expensive high
performance sports cars.
It is envisaged the new electric motors could be used as the sole drive
of all-electric cars. It is envisaged that each wheel could have its
own drive motor, with
each wheel powered by two lightweight batteries. By powering only
either the front or rear wheels, the number of batteries could be cut
to four, giving lower power, but longer range between recharges. As
there are permanant magnets, the power can be switched off going
downhill and the wheels will free-wheel, acting as generators to top up
2005 - (august) Chevron Oil Company launches a public community
involvement initiative, in response to the truth of the fading of cheap
oil becoming better known, overwhelmingly via the internet and via
European newspapers -
"Energy will be one of the defining issues of this century, and
thing is clear: the era of easy oil is over. What we all do next will
determine how well we meet the energy needs of the entire world in this
century and beyond....Many of the world’s oil and gas fields are
And new energy discoveries are mainly occurring in places where
resources are difficult to extract—physically, technically,
economically, and politically. When growing demand meets tighter
supplies, the result is more competition for the
can wait until a crisis forces us to do something. Or we can
commit to working together, and start by asking the tough questions:
How do we meet the energy needs of the developing world and those of
industrialized nations? ...Whatever actions we take, we
must look not just to next year, but to the next 50 years....We call
upon scientists and educators, politicians and
policymakers, environmentalists, leaders of industry and each one of
you to be part of reshaping the next era of energy."
All major oil companies are
faced with 'finessing' the fact of
declining oil products - and therefore greatly increased prices - to
the consumer. BP ("Beyond
Petroleum") was the leader. Eventually all
companies (and governments) will have to accept the public worry about
the future of
supply as well as the outrage over price increases and shortages, and
it with some public display of apparent concern, while drawing
attention away from the windfall profits made, and the effect on low
The truth, well known to the industry and its
political-military complex, is that transition - fiercely
difficult even in the very best of circumstances - is now 20 years or
more too late. As the oil economy steadily, irrevocably, fades, severe
physical and emotional dislocation becomes increasingly manifest.
Huge amounts of capital are needed to start the transition
to decentralisation, canalisation, re-railing, hybrid power shipping,
solar power via photovoltaics, massive scale wind and wave power,
and all the other massive infrastructural changes. Huge capital will
surely be in very short supply within 20 years. Only feudal and corrupt
Middle East oil producers will have this quantum of capital. And oil
2005 - (august 1) "The Pentagon, acting under instructions from Vice
Cheney's office, has tasked the United States Strategic Command
(STRATCOM) with drawing up a contingency plan to be employed in
response to another 9/11-type terrorist attack on the United States.
The plan includes a
large-scale air assault on Iran employing both
conventional and tactical nuclear weapons. Within Iran there are more
than 450 major strategic targets, including numerous suspected
nuclear-weapons-program development sites...As in the case of Iraq,
the response is not conditional on
Iran actually being involved
act of terrorism directed against the United States. Several
Force officers involved in the planning are reportedly appalled at the
implications of what they are doing – that Iran is being set up for an
unprovoked nuclear attack – but no one is prepared to damage his career
by posing any objections"
Philip Giraldi, “In Case of Emergency, Nuke Iran,” American
Conservative, August 1, 2005
This may of course be 'planted' disinformation to dissuade
Iran from the
euro. Or maybe not.
2005 - august - India is
warned by the USA not to proceed with the Iran
to India gas pipeline, and that all trade with Iran is under USA
embargo of 1985, re-confirmed in 1997. All USA trade is embargoed - USA
law, on the face of it, does not apply in other sovereign countries.
- mid august - USA - the strategic
reserve now has 600 million barrels in it, and Bush re-states his
intention to continue to fill it to capacity, about 700 million barrels.
2005 august 14th - USA
based on its 'intelligence'
sources, of sponsoring terrorist attacks in Iraq.
2005 - august - Iran
threatened with sanctions unless it halts its nuclear
programme. The USA
government is worried Iran, although a signatory to the Nuclear
Treaty and fully monitored by the International
Atomic Energy Agency (as required by the treaty), 'might'
develop nuclear weapons (or even develop "programs" to develop nuclear
weapons). Iran is not yet producing
to meet the existing and projected requirements for gas-fired
electricity plants. In 2002, over 70% of total government revenue was
from selling oil and gas. Iran's economy is deeply dependant on selling
gas and oil. It needs foreign
currency from gas sales to meet the needs of its out of control
growth in population.
Even in the
medium run, it cannot rely on gas or oil fired electricity generation.
These hydrocarbons need to be sold for national income. It has it's own
uranium ore deposits that can be used in nuclear power plants to
generate electricity. Of more interest to foreign countries, it has huge
and barely tapped natural
gas reserves. It's fate
(august) USA Bush agrees to cooperate with India, agreeing to
"work to achieve full civil nuclear energy
cooperation with India". India, like Pakistan and Israel, has nuclear
weapons of mass destruction. India, like Israel, refuses to sign either
the Nuclear Non-Proliferation
Treaty (which requires monitoring of the countries nuclear facilities
by the International
Atomic Energy Agency), or the Comprehensive Test Ban Treaty.
2005 - (august 2) The United Arab Emirates disputes
the border between itself and Saudi Arabia at the point where it
over-lays the giant Shaybah oilfield, with
proven reserves of 15.7 billion barrels currently remaining.
At stake is
the belief that new techniques could raise recoverable oil to 18
billion barrels. More importantly, the field contains 25 trillion cubic
feet of gas.
2005 - (august) ExxonMobil completes a joint venture with Qatar to
build one of the world's largest LNG manufacturing facilities.
2005 - (august) The
world conventional LNG tanker fleet is now 180 ships.
2005 - (august)
As oil becomes more expensive and production rates decline from old
wells, attention turns to expensive to access deep water oil. The cost
of the relatively few specialised offshore exploration rigs is now
between 30% and 50% higher than last year - demand for these specialist
rigs is now high.
Suprisingly, Saudi Arabia this months hires five
'jackup' oil rigs to drill offshore.
Some commentators ask, if Saudi reserves are as large as their
unsubstantiated claims say, why do they need to explore the very
drilling option? There have been no Saudi offshore fields of any size
found in Saudi Arabia since 1978.
Why are the Saudis looking for relatively small fields (by their
standards)? The answer may be an estimate in 2000 that saw a possible 2
billion barrel of oil oilfield likely offshore Saudia Arabia, mostly,
but not entirely, in Iranian waters. Clearly, an ally with strong marine
firepower would be needed to protect the drillers in this contentious
2005 - In many countries motorists are saving money on high petrol
costs by turning to regular gas for their cars. Automotive experts
claim using lower octane 'regular' ( typically 87 octane ) in modern
computer-controlled engines does no harm, as the timing is
automatically adjusted to the richness of the fuel-air mix. The
possible exceptions are turbo-charged and high-performance engines. The
only drop in power in most cars is when the vehicle is being driven
hard and fast - not a likely scenario for those watching their petrol
consumption. In some vehicles mileage even improves when regular is
used. Older vehicle, especially those with carburettors rather than
fuel injection, may experience pre-ignition or 'pinking' when the car
is under load. Well tuned and driven carefully, pinking may not
necessarily occur, even in carburettor-fueled autos. Premium petrol is
typically 91 octane, although some 98 octane fuels are now being
introduced. The main benefit is to the oil companies and the gas
stations, which have a higher profit margin on the so-called premium
(august) Mexico's state owned oil company, Petroleos Mexicanos
(Pemex) says it expects its second biggest oilfield, the offshore
containing mostly heavy oil, to more than double crude
output to 800,000 barrels a day within
five years. A total of 18 platforms are hoped to be in place by that
time (barring hurricane damage). The size of the production increase
means it is likely to
be pressurising the field from the start, hastening its ultimate
Cantarell field continues to decline at a rate of 2%-5%, with a
oil engineer claiming decline may be as much as 15%-20% by 2008.
if the Ku-Maloob-Zaapto complex reaches this level, it will be
barely replacing the dropping production from Cantarerell. The
conventional wisdom is that Cantarell will drop production to about 1
million barrels a day within about 3 years. It may drop more steeply
(august) Mexico's 56,000
kilometres of oil pipelines, many built in the 60's and 70's, are 20
years beyond obsolete. 40% are either damaged or corroded. The Mexican
government has supplied only a third of the estimated capital amount
needed for repairs and replacement. About 60% of Pemexs' revenue goes
to the Mexican government. Pemexs debt has more than doubled in the
last five years, and is now a massive $US48 billion. There is little
cash left to invest in
exploration, refineries, or in natural gas production. As a result,
imports around 25% of its gasoline (from USA), and 20% of it's
2005 - (august) Iraq's oil production remains low (currently only
barrels a day exported), partly due to the dilapidated state of it's
infrastructure and lack of material and capital for repair (it already
has excellent oil engineers) and partly due to the 257 acts of sabotage
on its oil infrastructure since the American
invasion to have a look around for 'weapons of mass destruction'.
- (august 28) - USA and UK legal and governmental teams bully and
bargain away the original Iraqi draft constitution produced by the
Iraqis because it diverted Iraqs oil resources to collective ownership
by the Iraqi people and required the money to be spent on "social
justice" - a right to state provided health care, housing, education
and so on.
After the occupying powers have finished, the
final draft of the Iraqi constitution is stripped of all elements of
social justice as the basis for the economy, and code words for
privatisation and sell off to foreign interests inserted
- “reforming the Iraqi economy according to modern economic bases,
way that ensures complete investment of its resources, diversifying its
sources and encouraging and developing the private sector.” 'Reforms'
mean privatising all communally owned assets, usually to rich
The most important element is that the proposed constitution (article
110) strips Iraqis of 100% ownership of their oil, as it presently is,
in favour or allowing multinational companies to "develop" it. It also
means privatisation of the state owned oil company. -"...federal
government and the governments of the
producing regions and provinces together will draw up the necessary
strategic policies to develop oil and gas wealth to bring the greatest
benefit for the Iraqi people, relying
on the most modern techniques of
market principles and encouraging investment.”
The consitution allows a form of federalism, with federal governments
controlling their 'share' of the oil revenue. By co-incidence, the
Shiite south and the Kurdish north will 'do' very well out of this. The
Sunnis in the centre will have to hold out their hand to the central
government for whateveer can be got from taxes. This is an effective
partitioning of Iraq.
The wheel has turned full
circle, and in spite of the circumstances on the ground, the
oil multinationals dream of
exploitation of Iraq's 'high profit' oil with 'protection' of an
assorted band of religous gunmen and other thugs, along the Nigerian
model, looks very likely.
2005 - (august)
Kuwait, supposedly with 99 gigabarrels of oil reserves,
is accused by Iraq of tangential drilling across the border and into
Iraqi fields. Kuwait is also now developing small northern fields,
suggesting their reserves may be closer to Dr. Colin Campbells recent
estimates of 55 gigabarrels, and that Kuwaits main Burgan
field is likely to
be heavily depleted.
- (august) while the approximately 160 US refineries have
been shown as operating
at less than full capacity, it is increasingly apparent that this is
because they can't operate at
full capacity, not because they lack
crude to refine. Planned annual maintenance closures may have been
shortened or even deferred in order to allow production to continue.
Plants may have
been over-pushed to try to meet demand. This may be part of the reason
shutdowns due to plant failure and accidents. The latest refinery
forced to shut down is Sunoco in Philadelphia, closed following a fire.
It would normally produce 200,000 barrels a day of distillates. Large
capacity refineries that have recently experienced interuptions to
operation include those of BP, Exxon Mobil and Valero. BP's Texas City
refinery recently had their second fire in four months, and then had to
shut the gasoline cracking unit for 'maintenance repairs'. As the US refineries
age, corrosion and
breakdown become increasingly problematic. The problem is made worse by
the large numbers of refineries which were closed down in the era of cheap
oil in the 1980's. Some of these refineries specialised in
producing fuel oil for electricity generation plants that could run on
either gas or fuel oil.
The end result is USA's remaining 132 oil
refineries now have a reduced
capacity of 16.8 million barrels a day at a time of historicaly large
demand. Any further shutdowns or damage to these refineries will
seriously compromise USA ability to fully supply it's domestic market,
meaning USA must import, and therefore bid up international refined
product to be the preferred purchaser.
2005 - (august
12th) oil is $US66
- (august) USA energy legislation comes out directing the strategic
reserve be increased
to 1 billion barrels of crude oil.
2005 - (august
13th) - China is experiencing a refinery-limitation
"supply crunch" in some cities, supposedly partly due to tankers not
being able to
dock due to typhoon Haitang. Previous decisions
to curtail imports of refined product may also be to blame.
Guangzhou, with a shortfall of about
2,200 barrels per day of distillate is now rationing gasoline and
diesel. Chinese oil refiners have lost around Rmb4bn to 6bn in the last
6 months as the Chinese government orders the refineries to 'absorb'
half the higher cost of oil in order to artificially shield Chinese
businesses from having to bear the true market cost of oil.
2005 - China - an estimated 1,200 tonnes a
month of China's heavily subsidised crude oil and oil products are
smuggled out to Hong Kong from Guangdong
for re-sale at closer to world prices, reaping handsome profits for the
2005 - (august 15th) - USA - petrol averages about $US2.48 nationwide.
In a few places (19 of 92,792 gas stations) regular sells for $US3
gallon a record high.
2005 - (august 9) - UK - The average price of unleaded petrol reaches
its highest ever point - 91p a litre. Diesil is almost 94p a
litre. This increase translates to motorists paying an additional £7.4 million a day above the price paid at the
start of 2005.
- (august 15th) Venezuela, the world's fifth-largest oil exporter,
offer its oil development blocks in it's Orinoco oil belt, which may
contain as much as 300 billion barrels of heavy crude, to oil companies
in Latin America - such as Uruguay's state oil company, and Brazil's
Caribbean Petroleo Brasileiro SA. The objective is to secure the
benefits of South American oil developement for South Americans and
ensure economic stability.
President Chavez says "In the
first place oil will be for the Venezuelan people, and then the people
of Latin America and the Caribbean" rather than oil benefits 'flooding
up' to private US companies from the outside the region.
2005 - Private companies continue to make massive profits from historically
high oil prices.
2005 - (august
President Hugo Chavez accuses USA presidential office of planning
against the people of Venezuela. The energy
minister reportedly says if the U.S.
shows any signs of aggression toward Venezuela the Venezuelan
government is "ready and
willing" to stop selling oil to the United States. The minister noted
that "the US market is not indispensable to us" and that there were
other markets that oil could be sold to, notably
China. Venezuela currently exports about
million barrels a day to
, and supplies about 7.5% of USA oil, the fourth biggest single
supplier in the
mix. (Mexico and Saudi Arabia supply about 1.6 million barrels a day
each, and Canada supplies nearly 2 million barrels a day.)
2005 - (august) Venezuela
announces plans to expand its fleet of oil
tankers. The fleet will go from the current 21 tankers to 58 over the
next seven years. The objective is to sell to new clients around the
world, including Asia, which is around 40 sailing days away from
Venezuala - far more than to the USA. The USA is Venezuela's largest
customer at the moment. Venezuela currently sends oil to its own petrol
station chain in the USA. The USA is unlikely to allow Venezuela to
sell oil to whom it wants, or to give favorable deals to impoverished
neighbouring countries, or to promote corruption-free democracy in
South America. Venezuela
sealed its fate.
2005 - august - Venuzuela's wealthy
kleptocrats (20% of the population) use their total control of the
media to make hysterical propoganda against the democratically (by the poor
80%) elected president, and
continously publish calls by various commentators to murder the elected
head of government. Astonishingly, unlike USA, Britain, Canada, or any
European democracy, this treasonous call for terrorism is not a crime -
and goes unpunished!
2005 - (august) - an exteme propogandist closely allied to president
uses his media position to suggest that the USA engage in terrorism -
the murder of a democratically elected head of state. Not the head of
North Korea, an extremely dangerous dictatorship publicly and clearly
involved in building weapons of mass destruction, but Venezuela, an
open and participatory democracy. But peaceful Venezuela has oil,
whereas insane and dangerous North Korea
effectively has none. The US
government pointedly declines to arrest the offender under the homeland
security law on a charge of promoting terrorism. The US government uses
its 'beholden' television and print media to use biased and loaded
language full of 'trigger words' (muslim, infiltrate, rogue, leftist,
communist, antidemocratic) to characterise the Venezuelas
democratically elected government as a "regime", a "rogue state"
and as a "launching pad for communist
infiltration and Muslim extremism". The american
media reports the US
'concerns' about his "committment to democracy" and non-specific
propaganda about "spreading instability"
in Latin America and funding
Chavez is said to be influenced by the ideas of the French revolution
and the European enlightenment, which bought democracy, liberty and
brotherhood to Europe once the unelected dictators ('royalty') and
kleptocrats had been removed. Chavez uses barter
to trade oil to
poor countries, recently swapping oil to Cuba in return for hire of
20,000 Cuban medics to treat the poor in Venezuelas impoverished shanty
towns. Chavez offers to direct-sell discounted fuel oil for winter to
USA citizens below the poverty line.
Clearly, the democratically
elected government of Venezuela is being propogandised
by the USA to 'justify' USA state terrorism in order to control Venezuelan oil for USA benefit. The US
is yet to publicise its price
for the job.
2005 - US
securing of the Iraqi oilfields/ middle east military base,
and guarding of the Afghan pipeline route now costs US taxpayers $US5.6
billion a month.
2005 - Fiat announces it
will launch an economical new version of its
tiny 1957 'bubble car', the Fiat nuova 500.
The original was a rear-engined 'micro mini' with a small two cylinder
479cc air-cooled 13 horsepower engine, coupled to a four speed manual
gearbox. It had a canvas roll-back sunroof, and carried at least 2
people. The new version will be a front-engined, front wheel drive, 4
seater hatch 3.3 metres long, powered by a four cylinder 1,000 cc
engine. A new, low emission, thrifty sub-1 litre, two or three cylinder
engine will be developed by 2010.
2005 - UK - British scientists develop plastics that are light, six
times stronger than normal, and fully recyclable. Plastic parts can now
be as much as 50% lighter than conventional parts, safer to handle than
glass fibre reinforced plastics, and cheaper to produce. The high
strength lightweight plastic can now allow lighter - and thus more fuel
effcient - cars to be designed.
2005 - Fuji heavy industries and NEX develop a manganese lithium ion
battery with a claimed 15 year or 200,000 km life. This is
significantly more than the nickel-metal hydride battery used in most
hybrid cars. These batteries have a guaranteed life of 8 years or
2005 - (august) Australian sales of 4 wheel drive SUV vehicles are down
by 20% compared to the previous year. Owners are reportedly looking for
more fuel economic vehicle. While the there are only about 860 hybrid
electric-petrol cars in New South Wales (the most populous state) the
Australian Consumers Association cautions that hybrid electric-petrol
vehicles may not be the cheapest solution in the long run, pointing out
that the A$20,000 premium to buy petrol-electric would not be covered
by the weekly fuel saved when compared with an small
car with a high fuel
The Association spokesperson also notes "it is
unknown how long the battery will last and how much it will cost to
replace it in 10 years' time".
2005 - (august) Auto
Bilds magazine tests the state of the art
Mercedes-Benz M class CDI diesel against the hybrid
petrol-electric Toyota Lexus RX 400h in a drive from New York to
San Francisco. The merc is a 3 litre V6 turbo diesel, the Toyota is a
3.3 litre V6 combined with the dual electric motor/generator system.
The M class had an overall fuel efficiency of 9.1
litres per 100 kms (31
mpg), the Lexus used 10.2 litres
to travel 100 kms (27.7 mpg). Given the slightly larger engine of the
Lexus, it would be fair to say that petrol-hybrid big-engine expensive
luxury cars are no more fuel efficient than their diesel equivalent.
2005 (august) - Nigeria faces having to now charge the true price of
oil to its domestic consumers. Until now, petrol pump prices have been
fixed by the government. But Nigeria must import refined product, and
as the cost now far exceeds the sale price, the state-run energy
company that handles oil exports and distillate imports is near
bankruptcy. Nigerias out of control population growth to 130 million
people, coupled with industrial scale corruption, has seen its $US340
billion oil revenue from the last 40 years squandered. As a result, the
lost productive-investment opportunities have kept its people as poor
as any any other impoverished African state without oil resources. When
the vast majority of people are locked out of the benefits of their own
indigenous oil wealth by corruption officials or by foreign control (or
a combination), people eventually reach a tipping point and demand
justice. In Ecuador strikes in the oil industries have reduced
production by 50%, and possibly permanently damaged some
wells.(Venezuela stepped in to cover the lost production for the
Ecuadorian government for free). In deeply impoverished Bolivia similar
strikes and blockades of overseas controlled extractive industries have
happened. However, interruption to oil supply by popular outrage in
Ecuador and Bolivia makes little difference to global supply. But
Nigeria is the world's eighth largest producer. The Nigerian government
is currently negotiating to try to avoid a strike.
- (august 16th) French prime minister Dominique de Villepin warns
citizens that refinery capacity in France cannot cope with demand -
“This crisis, we know, is likely to last. All the factors have come
together for oil to remain expensive in the years and decades to come.
Our refining capacity is saturated and cannot adequately cope with
2005 -(august 30th) - Oil is $US70.85 a
refinery bottlenecks continue and as concern mounts for the effect of
the looming category 5 Hurricane Katrina on the US Gulf oil refineries
and offshore crude reception terminus.
August - Hurricane Katrina causes refinery shutdowns, and closes
the US crude oil reception terminus (the Louisiana Offshore Oil Port)
for 7 days. Around
10% of the total USA refinery capacity is temporarily lost; but some,
including Exxon Mobils refinery at Baton Rouge, one of the largest,
remain in production or quickly return to production. Eight refineries
in Loisiana and Mississipi are damaged and stop operations. After the
shutdowns in July,
USA lost ability to supply 4% of its daily demand.
Oil fields in the
Mexican Gulf waters stop pumping. Total US domestic oil production at
the end of august was 5.4 million barrels a day. Mexican
provides roughly 1.5
million barrels of the USA current daily requirement of 20 million
barrels a day, i.e. roughly 7.5% of total (domestic plus imports) USA
national daily requirement (G of M oil share of USA domestically produced oil is about
Taken together, Mexican Gulf overseas oil terminus import facilities,
Gulf oil fields, are directly responsible for about 25% of the
USA oil supply. Bush says he will use oil stocks from the Strategic
Reserve if necessary to keep undamaged refineries operating as
continuous feedstock (oil) is required for smooth operation.
At least 46 oil and natural
platforms are destroyed. A further 20 are extensively damaged. The
platforms have around 25 production wells on them. The wells must now
be abandoned. The platforms act as receving points for oil piped from
adjacent derricks. These numerous 'satellite (caisson) wells around the
platforms have severely bent derricks and are now unproducable. Bent
structures bend the pipe, meaning the well has to be re-drilled. Some
of those re-drilled will no longer have a platform hub to pump the oil
to, so will not be re-drilled. At least 30 underwater pipelines are
damaged by mudslides.
Damage is more severe than that caused by hurricane Ivan.
engineers estimate it will
take years, not months, for Gulf oil to return to existing
The Mexican Gulf
represents about 30% of USA current domestic
Bush releases 30 million barrels of crude oil from the strategic
reserve until the Louisiana offshore Oil Port can return to service.
The Louisiana offshore Oil Port is the only place that oil supertankers
are able to berth, and is reported as being relatively undamaged. The
mainland terminus (Port Fourchon) for the oil pipe from offshore
suffers considerable damage.
There are no
reserves of refined petroleum available in USA to compensate for
reduced refinery capacity.
Energy Agency executive director
Claude Mandil suggests Europe will need to send some of its emergency
stockpiles of gasoline to USA if USA refinery damage is severe. The USA
crude oil stockpiles
are nearly full, but it is crude that has been refined down to gasoline
that is in short supply. USA uses about 20
million barrels of oil a day (with about 12.6 million barrels a day
consumed in refining down to petrol
and diesel for use in cars and trucks
). There is no shortage of refinable crude in the USA. If 7.5% of the
supply is interrupted for many months, and the strategic oil reserve is
replace the lost 1.5 million barrels a day (giving Iran a reprieve
the strategic reserve will last for over a year.
The reduction in Mexican Gulf oil production - of relatively modest
overall USA oil reliance - can be compensated by reduced demand. Demand
will fall due to inevitable high oil prices as USA competes on the
international oil market for increased supply, and by a temporary refinery
bottleneck which is occuring now. Recession
is inevitable, equilibriating reduced supply with reduced demand in USA.
is of refined
gasoline, due to refinery damage and temporary shut-down. Part may be
unrelated to the effects of the hurricane. The global
is causing shortfall in supply, and the hurricane may be partly a convenient
excuse, as happened in China.
Most of the large
capacity refineries that can handle more sulfurous crudes are in the
USA. And these are the refineries damaged in the storm. If USA cannot
take as much sulfurous oil, the Saudi sulfurous oil becomes very
difficult to sell in quantity. And as there are few other refineries
handling sufurous oil, when USA turns to the market for gasoline and
diesel to replace lost refinery production, it is largely taking
gasoline and diesel refined from 'sweet' light oil, increasing pressure
on global supplies.
“If the crisis affects oil products
then it’s a worldwide crisis
one should think this will be limited to the United States”
Mandil in Die Welt newspaper
While America buying petroleum on the European market and driving up
the price may seem like a crisis to the heavily petro-taxed Europeans,
it is really a short-lived but uncomfortable phase. As USA 'sour crude'
repaired, others around the world modified to handle sulfurous 'sour
crude' crude, and people cut
back their consumption, supply will once more meet the (reduced)
Of much more importance than the lost oil production - it can be
replaced by tankers bringing in more from overseas - is the
16% of USA
gas production that has been lost. Nearly 75% of the remaining
theoretically operative Gulf Of Mexico gas wells are, for the moment,
unavailable (destroyed wells are not yet enumerated). The winter
heating season starts in october, and the winter refill season usually
runs until the end of october. Around half of USA households are heated
with natural gas. Gas is essential as additional electricity generation
capacity for demand
peaks. Dual fuel gas/fuel
oil generation plants are no longer common,
nor are small regional
fuel oil refineries. Coal (50% of USA electric power) and nuclear
plants are constant
suppliers, without additional capacity to meet additional demand. While
gas storage is sufficient for a mild
winter (but 12% below the 3 winter average), full 'high demand'
(markedly cold) winter storage re-fill is
now unlikely. Additional supplies cannot be brought in from the global
market. There are only 4 terminals for specialised natural-gas tankers
(LNG tankers) in
USA, and none have spare capacity. Gas prices spike
20% over a four day period.
Commentators predict price increases
for gas of between 50%-80% in
winter. A winter
crisis is possible. The USA government is well aware of the risk,
and in an eerie echo of its inaction over New Orleans city levees, does
August - USA - natural gas prices spike to near double their mid year
2005 - (august 31st) USA
now has an excess of crude oil (5 million
barrels), an atypical situation for the pre-winter season. Usually this
crude would have been converted into heating oil and petroleum.
Refinery bottlenecks means crude is accumulating steadily and
available, but is unusable. Reduced heating oil availability drives its
price up to around $US2.67
a gallon. Demand for firewood in
eastern USA exceeds supply, wood prices increase dramatically.
2005 - (august 29) light
sweet crude prices hit US$69.25
- (august 31st) A poll in Canada shows 49% of those polled
wanted petroleum geological resources nationalised.
2005 - (august) USA power grid researcher Roger Anderson says
if the trend identified starting 1998 of
increasing frequency of blackouts
due to electricity distribution failures continues a blackout affecting
half the continental USA while not likely, is certainly possible.
2005 - (september)
Electric power supply fails at the pumps moving
gasoline in the two major pipelines feeding petrol to the southeast and
mid-Atlantic USA. Petrol stations run out as consumers panic and 'stock
2005 (september) USA environmental protection agency 'suspends' rules
of sulfur emmission levels in fuels. This 'temporary' suspension allows
more refineries without
advanced sulfur stripping technology to now produce diesil transport
helping with the refinery bottleneck. This move is likely to remain in
force until recession drives down demand to the point it can be met by
sulfur complying refineries alone. Industry insiders pick the
regulations forcing refineries to alter their plants to be able to
produce ultra-low sulphur 'clean burning' diesil (due in 2006) are
likely to be postponed indefinitely.
(september 1st) Europe - traders betting on a heavy demand from
USA for gasoline and diesel supplies from west Eurasian refineries bid
up the price of 91 octane unleaded petrol to $US801 a tonne. This new
'market rate' will flow through into prices paid in western Eurasia,
with pump prices in the UK expected to hit
£1 per litre.
2005 - (september
2) Europe-based International Energy Agency agrees to
2.1 million barrels a day of emergency oil reserves to USA for up to 30
including product from the west Eurasian-based 50 million barrel
emergency petroleum store. It is planned to release only 369,000 barrels a day as refined of petrol, the remaining 1.73 million barrels a day being
unrefined crude oil.
The USA, with its fleet of huge-engined, heavy, energy-wasteful
personal transport, has now
increased its daily petroleum
to about10 million barrels a day. The damage to refineries, coupled
ever-increasing demand, means it can now only produce 9 million barrels
of petroleum a day. USA has
ample crude, but is facing a petroleum shortage, and will have to buy
the shortfall of about 630,000 barrels a day of refined petroleum gas
on the international market.
2005 - (september 4th) Venezuela's US-based Citgo Petroleum
Corporation increases output at its four
refineries from 810,000 to 834,000 barrels of refined gasoline a day in
order to help
gasoline shortages. President Chavez undertakes to send an
additional 1 million barrels of gasoline direct from Venezuelan
refineries. Chavez also donates $US5 million to the hurricane relief
2005 - (september 3rd) Dr. Colin Campbell of the Association for Study
of Peak Oil and gas suggests that as Europe consumes 10.6 million
barrels of oil a day, and yet only produces 5.2 million barrels a day,
the chief European oil-export nation, Norway, could be paid by Europe
to keep its oil in the ground. In the face of economic crisis in the
coming decades, Norways existing $US120 billion government oil fund
could be seriously eroded by failure of conventional investments. The
best investment may be not in USA or Euro denominated bonds and stocks,
but is underground reserves of oil that increase in value and will give
a yield far beyond any available on the market today. This idea could
escalate. Investors could buy shares in a proven well that will not
be produced for a defined period of time, helping both conserve oil and
increase the value of their
below ground investment! Governments might shift some 'retirement'
social security investment money from stocks and bonds to 50:50
partnerships with contract drillers to find, prove, and plug gas and
oil reserves as an absolutely secure national
asset increasing in value faster
than anything else on the market.
(september 6th) Iraq with the world's third largest oil
reserves, introduces petrol rationing due to shortages of refined
petroleum, a problem made worse by rampant corruption. Petrol intended
for gas stations has been diverted to the blackmarket, where it sells
for ten times the official subsidised pump price. Worse, refined
petrolem product continues to be sold "abroad" when Iraq's needs are
still not met.
2005 - (September 6th) - petrol in Ireland is around $US5.30 a gallon.
A large part of the price is government tax. As a result of the cost,
owning and using any car is expensive; and using a very fuel
inefficient car is a privilege. The population benefits by historical
large government investment in public transport in a geographically
2005 - (september 6th) - USA - only one of the 8 refineries shut
due to hurricane damage has re-opened. One other is progressing toward
reopening. The two largest refineries of the 8, the Pascagoula
(ordinarily capable of 325 million barrels a day) and the
Belle Chasse refineries, have been extensively damaged. Industry
commentators say it may be months before they are able to re-open.
2005 - China's second largest auto maker, Shanghai Automotive
Industry, announces plans to begin commercial production of both its
own and foreign-branded hybrid-powered vehicles by 2008.
2005 - India's state-owned Coal India Ltd and Oil India Ltd form a
joint venture to build a coal-to-liquid fuel
plant (synthetic gasoline). India is the world's third largest coal
producer. The proposal is to use high-sulfur coal from Assam's north
2005 - (september)
India announces decides to go ahead with the
Iran-Pakistan-India gas pipeline, in spite of USA calls for UN sanctions
of suspicion of one
day possibly developing a weapons of mass destruction programme. India
announces plans to develop an indigenous natural gas powered small
2005 - Mazda has developed a sub-compact 'concept car' that has an
idle-stop system similar to that used in petrol-electric hybrids. The
system stops the
engine when the car stops at the lights, and restarts it automatically
when the accelerator is depressed.
2005 - (september 7) USA warns China that entering energy supply
contracts with a middle eastern energy seller will be shaky if the USA doesn't like
that country. He says "you
can't lock up
resources" in a global
marketplace. According to a USA functionary, "from a U.S.
perspective...it looked like Chinese companies had
been unleashed to try to lock up energy resources." The spokesperson
says "even when
governments think they "own" the resources of another country, that
country could nationalize
the assets". Of course, if China bought direct from the seller, it may pay
in currencies other than the US dollar...
In the clearest statement yet that USA considered that it owned
exclusive rights to global oil, the official said [China had to decide
whether it] "want(ed) to be against us and perhaps others in the international
as well". Curiously, USA points
accusingly to China's links with murderous regimes such as Sudan and
Burma, while USA has the closest links to Saudi Arabia, an autocratic regime of
extremist fundementalist that gave rise to terrorist attacks against the USA.
(september 8th) - Russia's President Putin and Germany's Chancellor
Gerhard Schroeder sign a $US5 billion deal to build
a 1,200 kilometre natural gas pipeline from the Russian port of Vyborg
Baltic sea direct to Germany. The gas will come from the
yet-to-be-developed Yuzhno-Russkoye gas field in West
Siberia. The consortium is 51% owned by Russia's state gas
company, Gazprom, and two German companies, BASF and E.On each hold
Other adjacent EU countries accuse
Germany of putting its needs first. Germany claims the gas "should" be
open to "later" participation by third parties. Germany has few oil and
gas resources, and relies on Russia for about 30% of its oil and gas
supplies. (In fact, about 47% of German gas supplies now comes from
Russia.) Russia currently supplies 25% of west Eurasia's gas needs.
West Eurasia is Russia's major market for oil and gas, with around 66%
of Russia's production being sold there.
2005 - (September 8th) energy consultant warns official projections of
UK gas production of between 85 and 100 billion cubic metres per year
from 2005 to 2007 are unlikely to be met as the latest statistics on
decline rate, at 9%, are higher than government officials or the
industry expected. Not only will winter in the next three years
experience gas shortages in spite of imports, but
electricity generated from gas will be more expensive, as
will LNG for UK's increasingly large fleet of dual fuel vehicles.
2005 - (september 9th) Royal Dutch Shell, the
major oil producer in the deeper waters of the Gulf
of Mexico admits hurricane damage to platforms in the Mars field
and adjacent locations means there may be no production from this field
for the remainder of this year.
2005 - USA electrical engineer
'tinkering' with his1.5 ltre Toyota Prius with 18 additional batteries
claims to be getting 80 mpg/28 kms
per litre in short range driving. In
addition, a further modification allows the vehicles batteries to be
trickle charged overnight from a domestic power point. The 18 batteries
add around 32 kms to the normal Prius range (about 50 miles per US
'short' gallon, 17 kms per litre)
where motive power is around 50:50 petrol:battery. At this point the 'home-made' modifications are not
comparison the following much older 'fleet cars', with multiple users
and indifferent driving gave -
1996 1600 cc Pulsar (not stated whether auto or manual) did 11.1
kms per litre, presumably around town.
1999 1000 cc Daihatsu Mira (not
stated whether auto or manual) did 16.6
kms per litre
1994 1000 cc Daihatsu Charade (not stated whether auto or manual) did
13.7 kms per litre
1999 1500 cc Daewoo Lanos did 12.3 kms per litre
11th) An interplay of factors cause intermittent petroleum
and possibly diesel shortages.
The USA shortfall of
630,000 barrels a day of refined petroleum can theoretically be
compensated for by drivers slowing down, tuning their cars, using their
second (smaller) car, car pooling etc - better than 10% savings can, in
made by these conserving
behaviours; (albeit USA now imports close to a million barrels of
gasoline a day, presumably to build stocks prior to the winter switch
to less gasoline production). But in Europe, refineries are now running at
full capacity, so refined product sent to USA is at the expense of
availabilty of refined product in Europe. While much petrol use in USA
and Europe is discretionary, diesel use in USA is not.
Diesel is used
almost exclusively in commercial trucking and rail in USA. A
significant component of
European diesel use is for
personal transport, and thus discretionary
to an extent. USA absolute infrastructural transport needs are likely
to bid up diesel
prices, possibly causing refineries to consider whether some petrol
fractionation should be cut back in favor of diesel fractionation -
further shortening petroleum
availability. This is the reverse of march this year, when refineries
cut back diesel production in
favor of producing extra petroleum - driving up diesel prices. The
equation now weighs heavily on diesels critical importance to world
economies versus petrols use for discretionary, frivolous, personal
As USA refineries are repaired and non-USA refineries slowly convert to
handling sulphurous heavy crude, and as high prices and intermittant
shortages (made worse by outbreaks of panic buying suddenly shifting
petrol storage from oil company tanks to constantly full vehicle tanks)
force temporary measures,
changes in driving habits and put more people on public
once more will meet demand. Increasing small business
failures and unemployment will
also help. But the beginning
decline in sweet light
crude supply will from now on 'chase' the reduced demand, and
it once more. Barring giant field collapse, the next five years or so
are likely to be a rollercoaster ride of periods of small-scale
localised absolute shortage and relative plenty, before fading into the
2005 - (september 11th) USA reports of a draft policy formulated
in march to attack real and imaginary so-called rogue
states with nuclear bombs without
warning. This may be USA propoganda
to try to scare Iran into abandoning its plan to engage in international commerce,
or it may be a genuine
terrorist threat. At stake is a partial shift from the dollar to
the euro (and gold) as currencies of value. This would seriously weaken
the dollar, and make USA oil and gas imports more expensive. Given the
huge stakes, this may not be just
a threat. A speculative scenario would see the USA
presidential/business/military complex exploit the known temporary gas
and fuel shortages likely at the end of this year and early in the new
year as an excuse to 'pre-emptively' bomb Iran's nuclear facilities and
sign over the marketing of its 'global resource' so that it is
'regular'. And in USA dollars only.
2005 - (september 11th) "The public do understand that stability is
all-important here and what
we need to do is deal with an oil
shock which is as big as the oil
shock of the 1970s in terms of its effect on the economy." - UK
Chancellor Gordon Brown is telling the truth. He then blames OPEC for
oil prices rise. Which is not true, as he almost certainly knows. Only
Saudi Arabia (supposedly) has spare capacity, and this is unusable
heavy crude, not 'light'. UK sells oil from its territorial
waters. If it wanted, the UK could mandate a drop in price via
nationalisation and control of the resource. Brown is being
2005 - (september
12th) - Due to taxes (67% of the pump price in the
UK, some claim 80%), many countries pay far more than the most energy
hungry country in the world -
UK - some petrol station now charge £1 per litre for
unleaded 91 octane - equivalent to US$6.92 per US gallon.
Norway - some petrol station now charge 11 koner per litre for unleaded
91 octane - equivalent to US$6.57 per US gallon.
Netherlands - some petrol station now charge 1.45 euro per litre for
premium octane - equivalent to US$6.76 per US gallon.
Turkey - with the average wage only $US4,642 a year, petrol is
$US2.01 a litre - equivalent to US$7.60 per US gallon.
USA - popular outrage as petrol climbs to US0.79 cents per litre - equivalent to US$3.00
per US gallon.
There is currently a shortage of refined product. Demand is higher than
supply. Prices ration the supply to those who can pay most, regardless
2005 - September - USA congress takes away a large
part of the poor's winter's fuel oil and energy assistance subsidies
for the coming winter and gives it to victims of of the 'unforseen'
levee collapse due to the 'unforseen' Hurricane Katrina in the Gulf of
2005 - (early september ) - Desperate for refined product, USA's
president Bush calls for USA refineries defer all maintenance and
to operate to the absolute maximum. Candadian refineries mull over
deferring maintainence to maximise production. The main petroleum
pipeline from Canada, the Enbridge 2 million barrel a day pipeline from
Canada to the USA midwest, is pumping at near full capacity. Canadian
refineries have no spare capacity to max the pipeline out anyway.
2005 - (september 12th) quote of the month from Jim Kunstler:
"Another Big Thought still clogging the collective imagination is the
idea that if only we switch to "alternative fuels" we can run the
interstate highway system, Disney World, and WalMart just like before.
The country is full of people now who want gold stars for running their
household car fleet on discarded Fry-Max oil from the local Dunkin
Donuts. . . or on oil squeezed from hemp seeds. Notice that the premise
of a drive-in society remains.
Now the scary part of this is that these ideas are coming generally
from the smarter people in our society. The dumb ones are are praying
for the Rapture, or waiting for the market to magically fix everything,
or sitting around the suburbs of Houston oiling their riot guns in
front of the Nascar telecast."
2005 - september - global oil and gas exploration is now greatly increased. There are
422 offshore drilling rigs working, with only 4 rigs not yet committed.
To build a rig to meet additional demand takes between 3 and 5 years. Skilled rig operators are
in short supply. Because oil
exploration and development infrastructure is limited, the
daily chargeout rates for exploration rigs double. Saudi Arabia is
pushing exploration hard to compensate for declining mega-volume flows
- desperate for experienced petroleum engineers and drilling
supervisors, it places full page advertisements in Dallas, Texas,
"Virtually every rig and every
petroleum engineer in the world is already working. Materially
increasing the level of activity beyond the current level is not
feasible over the coming 3-5 years"
-senior private sector
analyst giving evidence to USA Senate Energy and Natural Resources
Committee sept 6 2005
2005 - As the North Sea
fields continue to decline, closing platforms
and pipelines as significant fields play out is economically essential
in the difficult arctic environment. Small oil and gas fields at a
distance from platforms are not tapped as they too infrastructurally
expensive to develop relative to the return. The UK's share of North
Sea oil production is now about 10% less than the previous years
eight new fields coming on line.
2005 - Global new
car building capacity is 55 million new cars per year. Industry experts
predict that will have to double to meet the demand in China. Pity they
are not also oil
2005 - (september)
Toyota announces it aims to boost petrol-electric
hybrid car production by 60% to 400,000 in 2006, and to eventually run
all its vehicles on this power system. The
cost of components for
hybrids makes them $US3,000 to $US5,000 more than an equivalent petrol
model. Toyota is working on cutting the cost differential by
Toyota, owner of Daihatsu, a company expert in small car technology, is
now responsible for half the global growth in new car building. It
builds about 1.5 million new cars a year.
Daihatsu announces shows
a concept car, the 'HVS', a lightweight hybrid sportscar. It combines a
1.5-litre petrol engine with a 4 wheel drive hybrid system. Daihatsu
claims the performance will be similar to a 2 litre engine, but with
fuel economy better than of a 1 litre
engine. Why it is bothering is
Honda Motor Co. has produced a new version of its
Civic compact hybrid.
Ford contunues to buy hybrid
technology from Toyota for its a sport-utility vehicle.
Nissan Motor Co, controlled by Renault France, plans to
release a hybrid in the USA in 2006.BMW announces it will work with
General Motors, and DaimlerChrysler
in an effort to develop a petrol-electric power system for their
models by 2007. Volkswagen and Porsche plan
to jointly develop petrol-electric versions of their SUV models.
Suzuki announces it will manufacture
under licence Fiat and Opels 1.3 litre diesel engine for its new small
car, the new 'Swift'. The Swift will do 51 miles per US gallon, 21.7 kilometres per litre, better than the much more
expensive hybrids, but not as good as the
most efficient small diesel car.
2005 - (september
13) Canadian oil exploration company EnCana sells
its 75,000 barrels a day oil fields in five blocks in Ecuador to China.
The fields sold for the mid-range price (1.42 billion) that EnCana
wanted. The oil fields' proved reserves are said to be143 million
barrels. (About 5 years of supply if pumping rates remain at the
present extraction rate. Which they won't.). It sells China it's 36%
stake in the new 450,000 barrel a day export OCP pipeline. Impoverished
Ecuadoreans have recently protested at the lack of benefit from oil
exploration to local communities. EnCana had thought that Ecuadorean
state owned oil companies would buy the offering.
(september 14th) - China announces it has shelved plans to start
filling their newly developed strategic 90-120 day strategic oil stockpile,
due to have commenced by the end of this year.
China's more long term view may see it buying
heavy crude no other
nation can easily process in quantity,
and fill stockpile with this
lower priced commodity. Or it may be simply converting its massive
holdings of US dollars to a different store of
A Chinese government spokesman claims following a recent survey of
China's oil and gas resources "China is able to maintain production of
at around 180 million tonnes a year over the next 20 years". This is
1,319,400,000 barrels a year, or 3.6 million barrels a day - about half Chinas current oil
consumption of 6.2 million barrels of oil a day. Given that Chinas oil
production may have peaked (as far as can be told), and China's Sinopec
Economics and Development Research
Institute predicted this year that Chinas oil consumption will reach 10
million barrels a day within 15 years, the spokesman seems
2005 - (September
16th) Saudi oil sells for about $US52, where US
sells for about $US65. Saudi has dropped its price by $3 in about a
month. Why the larger differential? Saudi Aramco's crude oil blend has
a relatively high suphur content, and the major refineries that handle
this type of oil have had their output reduced by hurricane Katrina.
The Saudis are finding it difficult to sell oil. Commentators observe
that there is a lot of, in effect, 'unrefinable'
crude in the market at the moment, and the Saudis and other high sulfur
producers may have to drop their prices even further. Competition for
Texas light, Brent sea light, and Nigerian Bonny light is certain to
increase. There are, at the moment, two oil markets - the market for
sour suphurous crude is oversupplied, the market for sweet crude is
undersupplied. The spread
between the prices is likely to increase.
2005 - (September 16th) - USA 44% of Gulf of Mexico oil production is
still 'off-line', partly due to damaged onshore infrastructure. Nearly
34% of the USA G of M's gas remains
- historic first delivery of liquefied natural gas (LNG) by Gazprom
(Russia's state owned gas major) to USA arrives at Cove Point,
Maryland. The 60,000 tons of liquid is 80 million cubic meters of gas
The director of Gazexport said “This is a
new page in Gazprom’s external
economic activity, which signifies the beginning of stable, reliable
and regular deliveries of our energy resources to the United States. A
relevant contract basis was established for this and next year we’ll
send at least five LNG tankers to the United States.”
Gazprom intends to base itself in Southern USAs oil and
gas belt, and be a both a wholesale and retail seller in the USA.
to build its own network of regasification terminals in USA.
Gazprom may deliver LNG from the huge Barents Sea Shtokman field
condensate deposits), so long as USA does not veto Russia's entry to
the World Trade Organisation. While USA also 'expects' to be allowed to
go into Russia and on-sell Russian gas to Europe via USA oil companies
based within Russia, the power is with the Russians. USA companies are
unlikely to be given a slice of the cake. USA needs Russian gas more
than Russia needs USA as a market.
2005 - (September 18th) trend to start selling-off huge big-engined
slurping SUV's is just starting in USA. Dealerships are finding it hard
to sell them, with sales down by a third relative to september 2004.
Sales of new small and fuel-efficient Toyota, Nissan and Honda models
are up 10% relative to the same time last year. There are almost no
buyers to be found for older SUVs on sale in USA. In New Zealand, where
- as in Europe -
petrol has been
heavily taxed for many years (now $1.53 per litre, $US4 per gallon),
and the majority of the national fleet is already small-engined (from 1500cc
to 2.2 litres) some dealerships are flat refusing to accept SUV's as
trade-ins. The demand for second hand 1500cc small cars can barely be
met. There is very little demand for large engined cars - except
2005 - (September 16th) - OPEC predicts demand for oil will fall
because of a
combination of bottlenecks in global refineries that are limiting
petrol and diesel production and damage to refineries that handle sour
crude. Both situations drive up prices and reduce demand. OPEC predicts
that if the trends continue, global consumption will average 83.5
million barrels a day for the year. This is an increase over last years consumption, but not
as dramatic an increase as some commentators predicted.
(September 18th) - Iran's demand for gasoline
continues to surge, growing by 10% in august to about 0.4 million
barrels of gasoline a day (70 million litres a day). Domestic
refineries can provide only a little more than half the gasoline
demand. Gasoline imports will cost Iran $US4 billion by march 2006, and
is expected to cost
$US20 billion over the next four years. The government rejects
rationing to drive down consumption, but will bring in a 'smartcard' to regulate
consumption. Details are unclear.
- (September 18th) - USA - Venezuelan
ship both heating oil and diesel fuel
to poor communities and
schools in USA at below market price, by "cutting out the middle man". A pilot
programme is set to start in Chicago on October 14th in a
Mexican-American community, then the oil-for-the-poor program expanded to New York's south Bronx and
Boston some time in November. The aim is to supply to use 80,000 barrels of crude at Venzuela's 8 USA
refineries to produce distilled product for shipping directly to schools, non-profit organisations and religious
organizations that help the poor.
2005 - (September 19th) - sudden one day spike in price of light sweet
crude from US$63 to US$67.39.
2005 - (September) - France's 'Total' oil and energy company outlines
a programme to spend US$3.4 billion (€2.8
billion) to increase diesel production at four refineries and to
upgrade refineries to be able to deal with heavy
and sour oil. This will boost its diesel refinery capacity by an
additional 29 million barrels. 60% of new cars in France run on
high-efficiency diesel engines. Total will also spend US$612 million
(€500 million ) on renewable energy
2005 (september 24th)
- Further hurricane, hurricane Rita, hits the Gulf of Mexico, further
damaging oil platforms and rigs. Of the 155 drilling rigs in the Gulf,
jack-up and semi-submersible rigs are
either seriously damaged or destroyed; of the 1,600 platforms in the
storm path, 66 production
are destroyed, with another 32 extensively damaged or detached from
their moorings. A total of 28 pipelines are identified as damaged.
relatively little new
refinery damage, with only one refinery in Port Arthur down in the
short term, estimates are for about the next one or two months.
2005 - (september 27th) - All of the Gulf of Mexico's oil production
(about 1.5 million barrels per day) remains 'shut in'. About 78% of the
GOM's natural gas production (about 7.8 billion cubic feet per day)
remains lost. The Gulf of Mexico shutdown since the previous hurricane
to date is equivalent to a loss of about 6% of the Gulf of Mexico's
total annual oil production, and nearly 5% of the total annual gas
production. Natural gas stocks are claimed by the USA Energy Department
down by only about 4% relative to the same period last year. Gas prices
are about $US14 per million British
thermal units. Gas is now an increasingly important source of
electricity generation due to numerous free-market gas-fired plants
being built without total-nation energy-security oversight. A winter gas and possibly
electricity supply crisis
in USA now depends on the severity of the weather.
2005 - (september
27th) - USA bulk wholesale
january delivery now
sells for just over $2 a
2005 - (september) UK gas crisis - energy
Minister admits that Britain now has a reserve cushion of only 11 days
of gas use as it comes into the colder weather and as gas supplies run short. The
UK was a nett exporter of energy, and has insufficiently prepared
reserve facilities for the decline in gas production. Most imported gas
comes in LNG tankers from Russia. Many of the electricity generation
stations are run on gas. Domestic users, not business, have first call
on electricity in shortfalls in supply. The Meterological Office issues
an 'amber alert' to the UK government contingency planners that UK is
likely to have a colder than average winter.
"If we have a cold winter, we are going
to throw the switch, businesses will shut down, people will lose their
Both USA and UK may be
in the same boat this winter.
- Sir Digby Jones, director-general of the Confederation of
September - Russia - Gazprom shortlists US owned Chevron and
ConocoPhilips, Hydro and Statoil from Norway, and the French Total for
the development of the Shtokman natural-gas field in the Barents Sea
Reserves of natural gas are estimated at 3.2053 trillion cubic meters,
and include 30.98 million tonnes of gas condensates.
Russia to make a decision, as 25% of the liquefied natural gas (LNG) is
provisionally earmarked for export to the US, with 75% intended for
export to Europe (Russia supplies 25% of west Eurasia's gas). The USA
wants Russia to pass special laws for the USA to be allowed access to
Russias oil and gas resources. Russia wants the US to allow Russian oil
companies reciprocal rights to freely trade
and compete in the US
domestic retail gas marketing network.
2005 - (september) Saudi Arabia announces it will remove 235,000 barrels per day of gasoline, LPG, jet
diesel, and fuel oil production from its Yanbu refinery. Yanbu's
current gasoline production is about 40,000
barrels a day. The one month shutdown due in november is both for
maintainance and to increase gasoline production to 60,000 barrels a
day. It will also enable a lower sulphur diesel to be produced.
2005 - (september 27th) About 15% of USA refinery capacity remains out
of action, and is likely to remain out of action until at least mid
november, now removing about 1.7 million barrels a day of refined
product (petroleum, diesel, jet fuel, heating oils) from the market.
Stocks on hand are 6%-7% higher than the same period the previous year, when
stocks were sharply
lowered by hurricane Ivan. An increase off an historically low
base, in other words.
2005 - (early october) about 20 supertankers,
holding about 40 million barrels of crude, remain at anchor in the Gulf
of Mexico, waiting for refineries to re-open so they can discharge.
2005 - (september 27th) A 325,000 barrels of petroleum a day refinery
owned by French energy company Total is closed by striking workers.
Total is the largest European gasoline exporter
to the USA.
2005 - (september) - Petrol prices in Russia have risen 15% since the
start of 2005. Russian oil companies TNK-BP, LUKoil, Sibneft,
Surgutneftegas, and Tatneft
agree together to freeze the retail price of petrolem at least until
the end of the year. The Russian Federal Antimonopoly Service launches
proceedings for 'price fixing'.
2005 - (september 30th) light sweet crude is $66.79
2005 - (september) Japans imports of
middle distillates - mainly kerosene for heating and gas oil - now cost
about $US80 a barrel to Japanese companies - a 45% increase so far this
year. Nippon Oil, with a refining capacity of 1.217 million
barrels per day ( 25% of Japans refining capacity) plans to increase
kerosene production in october by about 18% more than the last october
(to 485,000 barrels a day) and increase octobers gasoline
production by about 7.5 % (to 233,000 barrels a day). A Nippon Oil
company official says "We
plan to build kerosene stocks now to meet local demand because
importing (kerosene) later is expected to be ridiculously expensive".
2005 - (october 2) Japan beats more than 60 oil companies from
various countries to win the right to explore and develop the most
promising 6 oil fields in 26 oil zones in Libya. Libya, with the 9th
largest conventional oil reserves in the world, has a significant
number of undeveloped oil fields. The fields, mostly onshore, will be
developed by Inpex Corporation (with the French company Total), Japan
Petroleum Exploration Company, Mitsubishi Corporation, Nippon Oil
Corporation, and Teikoku Oil. First production at these sites is
expected about 2012. The only other Japanese interests in the middle
east are minor interests in Algeria, Egypt, its Iraq reward, and Sudan.
It's largest deal is with Iran,
but USA is unlikely to allow this to progress.
2005 - (october) USA now
imports about 1.4
million barrels of gasoline a day.
2005 - (october 3rd) - USA president Bush, learning
from the Katrina debacle, announces the 'Northeast
Heating Oil Reserve' in New York and Connecticut will be used if
necessary this winter. It
contains 2 million barrels, and has never
before been tapped. The price the USA
Federal authorities will offer it at has not been disclosed.
(october) two hurricanes (hurricane Opal, then hurricane Roxanne) that
hit the Gulf of Mexico reducing oil output by nearly
770,000 barrels a day compared with September levels. Production for
the month of october averages between 1.9-2.0 million barrels a day.
Offshore production (mainly from the Gulf of Campeche fields) was about
2.08 million barrels a day in september. Offshore fields produce around
Mexican crude oil, and six of the seven largest fields are in the
Campeche Gulf. These fields suffered extensive damage from hurricane
Roxanne in October 11. Around 11 million barrels of oil production was
lost in the four days of
complete shutdown of the offshore fields. The Cantarell platform, lost
production of about 23 million baresl in total by the end of october.
2005 - India - Reliance Industries Ltd
announces plans to double the refining capacity of its Jamnagar refinery,
which currently processes 660,000 barrels of crude per day. Costs are estimated at about $5.8 billion. Jamnagar currently exports refined product as well
as selling in the local market. More
importantly, its recent shutdown
of some units at the refinery removed 300,000 tonnes of LPG from the
domestic market, creating a total shortfall of 565,000
tonnes of LPG. 84 million Indian
households are expected to be
by the shortfall, about 1 in 12 households. Easily distributed cylinders of LPG are essential
for cooking - an LPG gas-cylinder
dependance similar to many middle Eastern countries with poor and
erratic electricity supply and distribution and little domestically
reticulated gas. India imports roughly 2.7 million tonnes of LPG,
mainly from Saudi Arabia, but the amount is likely to increase (and the
source become more diverse).
The shut-down will also create a shortage of
A proposal for a new 300,000 barrels per
day refinery in Visakhapatanam (close to
relatively new off-shore oil and gas fields) in the southern state of Andhra Pradesh is
announced by the State owned Hindustan Petroleum. BP is considering an
equity stake in return for permission to establish a refined fuels
distribution network in India. Shell has recently been given permission
to open 2,000 gas stations in India. BP wants to export Indian refinery
products such as diesel and petrol to China and possibly the west coast
India imports about two thirds of its crude oil requirements and a
large part of its LPG requirements, but at this time has relatively low
gasoline requirements. India is one of the few countries in the world
with surplus refinery capacity.
2005 - Volvo and the USA
Department of Defense build an experimental 'mild hybrid'
diesel-electric truck, based on the frame of Volvo's 'Mack'
model. The diesel engine must be used to overcome the weight-inertia of
a heavy vehicle when moving from standstill, but the electric power
train can then be used, mostly at lower speed around town driving. If a
'full hybrid' can be developed that is capable of moving forward from
standstill, the diesel engine can automatically shutdown whenever the
vehicle is stationary, with the potential to save 20% or more of the
diesel fuel costs.
2005 - (october) - First quarter production of most of
the major oil companies falls -
ExxonMobil is down 3%; Chevron is down 6%; Shell is down 8%; Repsol YPF
is down 7%.
Only Phillips-Conoco and BP report an increase, of
2%. Wall St energy analyst John S.
Herold estimates that worlds 7 largest
publicly traded oil companies (Total S.A., Exxon Mobil, ConocoPhillips,
BP, Royal Dutch/Shell
Group, Eni S.p.A,. ChevronTexaco) will all have reached peak of
production of their global oil field assets within the next 2 years,
and that production from all 7 will decline year on year thereafter.
Nation-owned public-capital companies exploiting their indigenous oil
resources in the public good produce about 77% of the world oil
supplies. These include the mega fields of the Middle east whose peak
is further out. The balance of about 23% is produced by private-capital
global corporate oil companies operating in concessions.
2005 -(october 12) - Iran
shuts down two offshore oilfields, the
Soroush and Nowruz fields, with a combined potential capacity of
190,000 barrels a day. These two fields produce heavy oil, which, due
to lack of refineries able to handle it, has a limited market. The
fields will undergo repairs and maintenance, and presumably re-open
when major refineries increase their capacity to handle heavy oil.
2005 - (october) Brazilian state oil
company Petrobras makes an exclusive offer to three Japanese trading
companies (Mitsui, Sumitomo and
Mitsubishi) to bid for the chance to buy
15% of the 600 million barrel reserve Jubarte
heavy oil field. The first phase, due
2006, is expected to produce 60,000
bpd, and by 2010 about 180,000 bpd.
Japan has no oil
reserves, and trading houses have been investing heavily in global oil, gas, coal, and metal
2005 - (october 13) - Bangladesh, with more than a dozen natural gas
fields, produces 1,515 million cubic feet
of gas a day, but demand has risen to a daily demand of about 1,625
million cubic feet. The government is forced to ration supply,
alternating shutting off supply to fertiliser plants and power plants.
These two industries use 67% of the gas produced. The shortfall is
expected to continue until late 2007, when new gas fields are expected
to begin production. At the current rate of use, gas fields are
expected to be effectively used up by 2017. All gas is conserved for
the domestic needs of the nation of 140 million.
2005 - (october) Contract price for deep-water drillships is now a
third higher than 2004, at $US300,000 a day.
Land based drilling rigs have increased from about $US35,000 a day in
2004 to around $US95,000 per day. High prices bring high exploration once more, but with low yeild.
Very expensive drilling costs leads to extensive geological survey
before the drill bit even touches the earth. The extensive and
sophisticated surveys find no giant oil fields (albeit the Southern
Antarctic Oceans have not been extensively surveyed).
2005 - (october)
Iran's sale of 5 million
tonnes of LNG to India by 2009 is
delayed because USA's General Electric refuse to supply
the compressors that convert natural gas into liquid to allow export by
ship, due to USA sanctions.
German liquification technology has also been refused. Unproven
technology developed by the French
firm IFP will be trialled instead. As a result, France has been
rewarded with development and export of a large block of the vast gas
reserves of the southern Pars field. Iran is also considering importing
less efficient Ukranian compressors. The end result will be increased
Iranian-Eurasian co-operation and interdependance - except UK, Italy,
and possibly Germany might reasonably expect to be left out in the
cold. USA is unlikely to allow Eurasia to have good relations with
Iran, as it would mean the
end of USA dollar dominance, and therefore USA domestic
2005 - (october 5)
USA - Natural gas
spot prices on the the
New York Mercantile
Exchange reach a record high of $US14.75 per
million British thermal units.
2005 - (october) Canada - natural gas sells for over $12 per gigajoule.
2005 - (october
24) USA - A landmark 'peak oil' bill is filed
USA House of Representatives with the
support of the newly formed 'Peak Oil Caucus', founded by Rep. Roscoe
Bartlett and co-sponsors:
"Expressing the sense of the House of Representatives that
the United States, in collaboration with other international allies,
should establish an energy project with the magnitude, creativity, and
of urgency that was incorporated in the 'Man on the Moon'
to address the inevitable challenges of 'Peak Oil.'
- Whereas the United States
has only 2 percent of the
world's oil reserves; Whereas the United States produces 8 percent of
the world's oil and consumes 25 percent of the world's oil, of which
nearly 60 percent is imported
from foreign countries;
- Whereas developing countries around the world are
increasing their demand for oil consumption at rapid rates; for
example, the average consumption increase, by percentage, from 2003 to
2004 for the countries of Belarus, Kuwait, China, and Singapore was
- Whereas the United States consumed more than 937,000,000
tonnes of oil in 2004, and that figure could rise in 2005 given
previous projection trends;
- Whereas, as fossil energy resources become depleted, new,
highly efficient technologies will be required in order to sustainably
tap replenishable resources;
- Whereas the Shell Oil scientist M. King Hubbert accurately
predicted that United States domestic production would peak in 1970,
and a growing number of petroleum experts believe that the peak in the
world's oil production (Peak Oil) is likely to occur in the next decade
while demand continues to rise;
- Whereas North American natural gas production has also
- Whereas the United States is now the world's largest importer
of both petroleum and natural gas;
- Whereas the population of the United States is increasing by
nearly 30,000,000 persons every decade;
- Whereas the energy density in one barrel of oil is the equivalent
of eight people working full time for one year;
- Whereas affordable supplies of petroleum and natural gas are
critical to national security and energy prosperity; and
- Whereas the
United States has approximately 250 years of coal at current
consumption rates, but if that consumption rate is increased by 2
percent per year, coal reserves are reduced to 75 years:
Now, therefore, be it Resolved,
That it is the
sense of the House of Representatives that:
- in order to keep energy costs affordable, curb our
environmental impact, and safeguard economic prosperity, including our
trade deficit, the United States must
move rapidly to increase the
productivity with which it uses fossil fuel, and to accelerate the
transition to renewable fuels and
a sustainable, clean energy economy;
- the United States, in collaboration with other
international allies, should establish an energy project with the
magnitude, creativity, and sense of
urgency of the 'Man on the Moon'
project to develop a comprehensive plan to address the challenges
presented by Peak Oil."
The challenge has been officially and
publicly placed on the USA government table by courageous
representatives. Will other democratic governments confront the issue
in their congresses and
- (october 26) In an unbelievable
stroke of luck for USA president Bush, Iranian president Mahmoud
Ahmadinejad is reported in the westrn media as calling for Israel to be
'destroyed' (in fact he called for the political entity of Israel to be
destroyed and all the Arab tribes of Palestine - including the
Jews- to be re-united once more). USA now have the excuse
they need to prevent Iran from selling oil and gas on the open market
in any currency the
buyer chooses. Over half Iran's foreign exchange
reserves are now euros.
(october) Russia Lukoil fails in a bid to buy Kazakhstan's state-owned
2005 - (october) China pays
billion for state-owned
PetroKazakhstan Inc. Kazakhstan has around 35 billion barrels of oil
reserves, and may have considerably more if preliminary reports of a
highly prospective offshore oilfield in the Kazakhstani
Caspian sea are true. A new 200,000 barrel a day pipeline being built
will take Kazakhistani oil to northwest China.
2005 - (november) -
China courts Venezuela, securing an agreement for the supply of 100,000
barrels of heavy crude and 60,000 barrels of fuel oil
per day for two years. Heavy oil is a difficult crude for any country
to sell, as not many refineries are configured to handle it.
- (november 1st) USA - about a
million barrels of crude oil production from the Gulf of Mexico
remains unavailable due to storm damage. Many pipes are still to be
leak tested. About 5 billion cubic feet a day of gas
is unavailable. Gasoline imports to USA continue to rise. World
gasoline markets are tight worldwide, especially in Europe and Iran. The
IEA vote not to supply USA with additional
gasoline from depleting Eurasian reserves.
2005 - (november) Dick
Cheney, USA vice president, claims that the true
purpose of the USA invasion and occupation was not aimed at to
securing Iraqi oil.
He deliberately 'labels' anyone who points to
contrary evidence as 'unpatriotic', echoing the shameful quasi-Nazi
anti-democratic, anti-free speech propoganda of the McCarthy era in USA.
"Patriotism is the last refuge of a
scoundrel." - Samuel Johnson, 1775.
2005 - (november 6) - Kuwait Oil Company announces the Burgan
oil field, the second
largest in the world, has peaked at 1.7 million barrels per day. It had
previously been forecast to produce 2 million barrels per day at peak,
and maintain that level for up to about 30 years, presumably by water
flooding to maintain pressure, but engineers could only force 1.9 mbd
from it, at some risk to long term production.
- (november 23) - American and British civil rights groups produce
a report on the re-colonisation
of Iraq's oil, based on official documents and analysis. Returning
Iraq's oil to foreign multinationals will require a heavy 'sweetener'
due to the dangers posed by Iraqi civil war, even although Iraq's oil
is the cheapest in the world to produce. The usual industrial rate of
return of capital invested is 12-13%, but (based on analysis of
existing oil multinational production sharing agreements in seven
countries) it is expected that the multinationals will demand from
42%-162%. At a price for oil of $US40 per barrel - unrealistically low
- and over the low end of the usual term - 25 years - the Iraqi people
will be deprived of $US127 billion dollars, relative to if the
previous state firm produced it, as happened prior to the US and UK
The invasion did not secure civil society because inadequate troop numbers
were sent. In-fighting and continuous sabotage was inevitable. As a
consequence USA and UK troops are 'unable' to exit, and must maintain military control
of all ports and airports. The Iraqi provisional government needs large
amounts of oil sales to pay US businesses to re-build the Iraqi civil
and oil infrastructure that the USA military destroyed - via munitions
and weapons provided by US contractors. Only large multinationals might
be able to provide relatively fast infrastructure - so long as the
Iraqi government pays out vast amounts of money to US contractors and
their sub-contractors and further proxy agents to protect the oil
On balance, the invading countries strategy of the dividing of Iraq
into self-contained 'strongman-headed' tribal states that collect their
own oil revenue and whose power is protected by local militia/gangsters
(complete with arbitrary arreest, detention and torture) under USA
patronage - plus destruction of civil
infrastructure and creating chaos to require Iraq to sell oil cheaply,
and create an urgent 'need' for multinational 'investment' to produce
oil in the volume required may well work; albeit world rig and crew
shortages mean 'fast production' is difficult, even if Iraq was
"...the federal system will facilitate
domination of the weak central government by the Kurdish and Shiite
parties that won the majority of the seats in the January 30 election.
The regional governments - not Baghdad - will have jurisdiction
over internal security and the power to establish “internal
security forces... such as police, security and regional guards”.
The flow of oil revenues into their coffers makes it inevitable
that the Kurdish and Shiite elite will preside over what will
be little more than one-party mini-states, with their political
opponents facing systematic repression... The Bush administration
...wants a regime that has the power to carry through a sell-off
of the oil industry and to sign agreements sanctioning the permanent
US military bases that are being built in key areas of the country.
After months of horse-trading, the deal with the Kurdish and Shiite
factions has emerged as the most viable way of transforming Iraq
into an American client state...Tens of thousands of Kurdish peshmerga
fundamentalist militia, loyal to their respective parties, have
already enlisted into the army, police and paramilitary units.
They are being accused of extra-judicial killings, arrests and
intimidation of opponents of the [USA] occupation."
James Cogan, august 2005.
In the interim, sabotaged and
bombed facilities, combined with the internal Iraqi power struggle mean
the required production for Iraqs civil needs can't be met
There are likely to
be critical domestic fuel shortages in Iraq this
winter, and oil products purchased from abroad are likely to be very
expensive. The multinationals and their complicit governments are
to re-take their old 'concessions
It remains to be seen how large the Iraqi oil (and more importantly,
gas) reserves really are, and
how quickly the multinationals can return production to pre-invasion
2005 - (november 22)
- UK liquified
prices reach $US20.15/£17 per million British thermal
units (Btu's) - a world record for LNG prices on the spot market. (Last month LNG on the
spot market was about £3 per million British thermal
units). Industries that use gas switch to
other fuels where they can; other restrict production; some shut down.
Chemical, steel making, and heavy engineering businesses are hit hard.
By 2020 supposedly 70% of
Britain's electricity will be from gas powered generation stations, and
90% of the gas to run them will be imported. This in
theory is possible; but it shows culpable ignorance of the reality of expected life of global
gas reserves in the face of increasing world competition for the same
limited resource. There are now proposals for 70 LNG-based projects in
USA, around 30 projects or proposals in west Eurasia, and others in India, China, other parts of east Eurasia, the
Middle East. Until the 2007
pipelines and terminals are built, the UK
will experience gas
shortages and power shortages in winter.
Russia's Gazprom has charged
western European countries
an average of US$135 per thousand cubic
meters in the first nine months of 2005. Gazprom expects the average
price to reach US$255, nearly twice that, in 2006. Gazprom expects
European demand to be 151
billion cubic meters in 2006, up from an estimated 145 billion cubic
meters to end of 2005.
Russia’s Gazprom completes the
final stage of the 'Blue Stream' gas
pipeline. Stretching 1,213 kilometers and costing $US3.2 billion,
the pipeline takes gas overland from the Krasnodar gas fields, then
underneath the Black Sea, re-emerging at the Durusu
near Samsun, on the Turkish Black Sea coast. The pipeline continues
overland to Ankara. At full capacity (estimated to be reached in 2010)
it can carry around 16 billion cubic meters of natural gas a year.
2005 - (november) Global
oil consumption, according to IEA figures, is now 85 million
barrels a day
. This is not quite the consumption rate predicted by
some at the start of the year, but is not far off. Barring recession,
supply/demand mismatch is likely around early 2006, with refinery
expansions and upgrades still not complete, decreased production from
the 'mega' fields, USA Gulf of Mexico oil still 'shut in' until march
and the US dollar still too cheap. IEA predictions of increased oil
production from non OPEC sources are not likely to be especially
reliable, if history is a guide.
in oil from non-OPEC countries in 2005 has proved to be less than 0.1 million
barrels a day (still being revised downward), whereas one prediction by
the International Energy
Agency during 2004 was that growth in non-OPEC oil would be 1.31 million
barrels a day. Their predicted non-OPEC growth of 1.31 million
barrels a day failed to
materialise in 2005. They now predict it to appear in 2006. This is
unlikely to be true -
The IEA's estimate for 2001 non-OPEC oil
revised down by 500,000
barrels per day;
The IEA's estimate for 2002 non-OPEC oil
revised down by
400,000 barrels per day;
The IEA's estimate for 2003 non-OPEC oil
revised down by 900,000 barrels per day;
The IEA's estimate for 2004 non-OPEC oil
down by 700,000 b/d....
Others in the oil business calculate non-OPEC oil production will be
nearly static until about 2010, when it will commence to decline.
2005 - Novembers quote of the month from William R.
, author of 'Petrodollar Warfare: Oil, Iraq and the Future of
the Dollar' -
"It is now obvious the invasion of Iraq had less to do with any threat
from Saddam's long-gone WMD program and certainly less to do to do with
fighting International terrorism than it has to do with gaining
strategic control over Iraq's hydrocarbon reserves and in doing so
maintain the U.S. dollar as the monopoly currency for the critical
international oil market...Candidly stated, 'Operation Iraqi Freedom'
was a war designed to
install a pro-U.S. government in Iraq, establish multiple U.S military
bases before the onset of global Peak Oil, and to reconvert Iraq back
to petrodollars while hoping to thwart further OPEC momentum towards
the euro as an alternative oil transaction currency ( i.e.
Petrodollar Warfare: Oil, Iraq and the Future of the Dollar
2005 - (november 2) - In the
last 2 months the USA treasury has issued
around $US100 billion in new debt. Medicare committments make taxpayers
now liable for around $US65 trillion.
2005 - (november
25) - Russia's central bank announces it will double
its gold reserves by buying on
the open market and from domestic suppliers. As Russia is receiving
large quantities of USA dollars for its oil, it appears to be
converting the dollar (and to a lesser extent the euro) to physical
metal equivalent as a more
certain hedge - tending to drive gold prices back towards its
historic link with oil, to the chagrin of the USA
In that the USA dollar is backed by oil, a movement by the Russians to
be paid in Euros or in gold is effectively a devaluation of the USA
dollar. This will make the price of oil imported into the USA higher.
2005 - (november 22) - Oil rich United Arab Emirates opens the first
ever gold and 'commodities' exchange in the Middle east, based in the
city of Dubai. There is huge interest in gold in the middle east -
Dubai imported $US10 billion of gold in 2004. Apart from gold and other
precious metals, the exchange will also trade in commodities such as
cotton - and marine fuel oil.
2005 - (november 13) - The German
Bundesbank, supposedly holding the second largest gold reserves in the
world (about 3,427 tons), has resisted government efforts to sell 600
tons of reserves over the next five years. The Bundesbank refuses to
reveal how much physical gold it has, and how much is 'out' somewhere.
2005 - (november) - as oil prices in India continue to rise and
currencies to inflate, Indians turn to transforming paper money into
gold. Gold purchases in the first half of 2005 have increased by 50% to
about 500 tonnes. India's Central bank predicts inflation will be about
5% this year, mainly due to increased oil prices.
2005 - China gives its citizens permission to buy and hold gold.
This may assist China to quietly convert US dollars into physical metal
value, and help maintain maximum purchase power for middle east oil and
gas (except USA's-Iraq).
2005 - China now produces and
sells 6 million new cars a year.
2005 - (december) - contrary to earlier
expectations, Norways oil
production is now 2.7 million barrels a day - production is now
declining at a relatively high rate of around 7% a year.
2005 - (december) The International Energy Agencies prediction of 85
million barrels of crude a day is not quite correct - about 84.73
million barrels are now
2005 - (november 28) - Mexico may have to begin importing oil by 2012,
according to officials of the state-owned Pemex oil and gas company.
The last proven reserves are now being developed, which, on current
use, would allow Mexico to be more or less self sufficient until about
2012. But, as replacement of reserves is only about 22% of the amount
being pumped out of the ground, then barring new discoveries of
substantial size, Mexico will become
a nett importer
of oil products by this date. Given Pemex is the de facto guarantor of
large amounts of Mexican government debt, where the money to import oil
from as oil 'debt backing' declines is unsure.
2005 - Mexico's Pemex
produces almost 3.4 million barrels of oil
equivalent (oil + gas
+ natural gas) a day, the largest part of which comes
the super giant Cantarell
- A report from Pemex experts ( Ing. Amando V.
Astudillo, Administrator Cantarell Integral Assets , Dr Fernando Rodriguez
Fields Development Manager, Dr Jose
Luís Sanchez Bujanos Explorations Manager, and Dr
decline in the field will be "dramatic". As a result,
Mexico's oil production will face a steep
production decline within 3
. They estimate todays 2 million barrel a day production
at Cantarell will fall
to an average of 1.7 million barrels a day in 2006, falling further to
1.1 million barrels a day in 2007, 800,000 barrels a day in 2008, and
520,000 barrels a day by the beginning of 2009. Cantarell produces
around 60% of Permex's oil.
8th) In response to this report, Petroleos Mexicanos (Permex) releases
a statement saying
production from the giant Cantarell field, currently producing 2
million barrels a day, will drop to 1.91 million barrels a day "next
year", a drop of 5%. They omit to mention this is the predicted
production for the start of 2006. By the end of 2006, production is
expected to have fallen to 1.5 million barrels a day. "By" 2008 it is
expected to have
fallen to 1.43 million barrels per day. To reach this level, the field
would have to decline by more than 12% in 2006, and by a further 12% of
the lower 2006 production in 2007.
- (december 2) -
Saudi Arabia plans to
capacity of about 4.1 million barrels per day to nearly 4.9
million barrels a day, by building
two new 400,000-bpd refineries capable of handling sour crude. It is
hoped to have them in production
by 2007. Much remaining Middle
East oil is now sour crude
, which can't
be handled by
most refineries. Saudi Arabia does not plan to build refinery
that would drive down the profit margin.
2005 - (december) - against
the 1,776 kilometer long
pipeline has still not completed filling, and now is not expected to
spew any oil from the Turkish Ceyhan end until may 2006. The ramped up
production from the Caspian Sea Azeri-Chirag-Guneshli block of
380,000 barrels a day (mostly crucial Azari light oil) must be exported
via Georgia's Black Sea ports of Supsa and Batumi, with a portion also
used to continue filling the pipeline.
The pipeline was built on the assumption that it would carry a large
part of the oil from offshore Kashgan fields, as well as Baku oil.
Kazakhstani oil is now more likely to go east, to China, rather than
west, to Turkey and the Mediterranean. The pipeline may end up being
2005 - (december)
- China inaugorates its new pipeline from its newly acquired
in Kumkol, Kazakhstan to northwest China. The pipeline intersects a
pipeline taking oil from Kumkol to Russia. Production from Kumkol is
to fill the pipeline, so half the oil will be imported from Russia into
Kumkol, and then into the empty Chinese sector of the pipeline. If a
new link is added to reach an existing Kazak pipeline running to the
Kazakhstan territorial part of the Caspian sea in the western part of
Kazakhstan, China will access the developing offshore Caspian Kashagan
prospect, said to be bigger than the North Sea. Currently its is being
explored by a consortium of mainly USA and European oil companies. They
are pushing for a pipeline from the field to run under the Caspian to
link up with the $US2 billion BTC oil pipeline sponsored by USA. China
has invested over
$US2.6 billion in Kazakhstan since1997. China is also considered by
Kazakhstan to be a major market for its developing oil and gas,
lessening its dependence on exporting to Russia. Current Kazak
production is around 1.3 million barrels of oil a day. Ultimately,
China expects to import over a million barrels of oil a day from
Kazakhstan, about 15% of its current needs.
(december) - Russia's Lukoil says it will not accept a discount
of $US7 for its Ural oil over the benchmark UK Brent crude.
Currently there are no 'benchmarks' for Russian oil traded in Europe,
benchmarks, the nearest being the Brent crude benchmark. As Russia has
many Eurasian joint venture partners, it can commence trading oil for
euros amongst its own local country subsidiaries at any time.
As Russia is, with Saudi Arabia, the
overwhelming 'high volume'
producer in the world today, it is in a position to 'call the tune'.
The marked drop in value of the US dollar versus the Euro in late
november has meant the ruble has appreciated
against the dollar, creating an even greater incentive for the ruble to
be weighted against the increasingly valuable euro, especially as much
of Russia's oil and gas export business is done in west Eurasia
2005 - (december) -
USA - As warned,
the cost of heating continues to climb. Natural gas is expected to cost
householders an average of about 38% more
than last winter. USA domestic gas prices are now around $US15 per
million Btu's. Heating
oil is expected to cost around 20% more than last winter. Over 80% of USA households
depend on natural gas and oil for
winter heating. Gas heats about 50% of homes, fuel oil heats about 30%
of homes. The average household in colder states uses from
to 1,200 gallons of fuel oil over winter. Only
around 9% of heat supply comes from electricity (generation capacity is
also partly gas-dependent), and a tiny 2% comes from burning wood.
These prices rises cannot be afforded
by the large number of poor in USA. Federal heating costs assistance is
given to only 15% (about 5 million households) of those actually
eligible. No increase in funding is available. Apart from Citgo
Petroleum, no assistance has been offered from the record profits
of the oil companies. Some small businesses are likely to have to
close. USA consumes all
its own production, and relies on Canada
meet its ever increasing demands.
2005 - (december) USA coal production
is totally committed, heralding
higher coal prices as long term contracts begin to roll over.
2005 - (december)
gasoline demand experiences the highest
ever recorded weekly increase - a demand increase of an
additional 600,000 barrels.
USA must now repay the strategic gasoline reserves it borrowed to tide
it over the refinery damage due to hurricanes Rita and Katrina.
2005 - (december 22) - USA Congress votes not to drill for oil and gas
Alaska Arctic National Wildlife Refuge. This
decision will inevitably be overturned in years to come. Alaskas North
Slope as a whole has an estimated 37 trillion cubic feet of gas, and is
single biggest largest undeveloped gas resource. There is currently no
pipeline in place to exploit the gas reserves, or any funding to build
(december 18) Iraq. The Beiji refinery in the Sunni area of Iraq -
Iraq's largest and most important refinery, producing around 2 million
gallons of gasoline a day - is closed by the government after
insurgents threaten to kill anyone loading fuel there. The refinery
tanks are full, but the fuel is now undeliverable. Tanker drivers
refuse to risk their lives loading it out. Iraq, with some of the
worlds largest reserves of crude oil, will have to buy more petroleum
from countries such as Kuwait.
2005 - (december 30) - Iraq.
Iraqi president signs a deal with US
dominated 'world' bank to impose austerity measures in return for "debt
Part of the deal hinges on Iraq accepting contracts with major USA and
European oil companies that are highly disadvantageous, and used almost
nowhere else in the world.
Part of the deal hinges on the effective irreversible privitisation of
Iraqi oil and gas exploration, extraction, and sale.
Part of the deal hinges on Iraq accepting world bank 'austerity
Subsidies will be removed not only from from petrol
(which the majority of now impoverished Iraqis have little use for) and
tripling its price but off a low base (and increasing the price of
diesel by 900%), but
also the kerosene used for heating
, and the
natural gas most Iraqis use to cook
their grain and bean based food. About a quarter of Iraqi households
live on less than
per day. The three southern Iraqi provinces refuse to implement the
USA's IMF price rises/privatisation
2005 - (december 30) - Iraqs oil minister is reported as "taking
leave", with the
intention of resigning. It seems he was actually suspended by the Prime
Minister for vigorously objecting to the rise in cooking fuel and
gasoline prices. His officials say there is an impending oil supply
crisis in Iraq
due to sabotage and logistics problems. "Production
in the north, centre and south is about to suffocate". Deputy Prime
Minister Ahmad Chalabi is once again
appointed head of the oil ministry.
2005 - (december 30) light
sweet crude is US$60.32
End of 2005
Oil prices for the year average out at around about 37% higher than
Oil consumption around the world is
up, at the equivalent of around
million barrels a
day (84,787,000 barrels a day) by december (conventional and
unconventional, i.e. all liquids),
about 1.7 million barrels a day higher than end of 2004. By the end of 2005,
virtually all the world's spare capacity has been eaten up by this
larger than expected growth in world demand for oil by years end.
Looking back from
november 2006, it is now the case that december has seen a peak of
world oil plus condensates production (according to EIA data).
oil production for the year is estimated by ASPO
to have been (in million barrels a day)
29 mbd from other countries - Mexico, Venezuala, Nigeria (about 2.5 mbd) , North
China, India etc
26 mbd predicted for 2010
20 mbd from Arabian Gulf states
(mainly Saudi Arabia)
20 mbd predicted for 2010
9.2 mbd from Russia
8.4 mbd predicted for 2010
5.2 mbd from Europe (mainly
Norway, whose 2005 production was 3 mbd)
3.6 mbd predicted for 2010
3.6 mbd from USA lower 49 states
2.8 mbd predicted for 2010
oil production for the year is estimated by ASPO
to have been (in million barrels a day)
2.3 mbd from heavy
oil, shale, oil sand and bitumen
3 mbd predicted for 2010
3.6 mbd from deepwater oil
12 mbd predicted for 2010
0.9 mbd from polar oil
1 mbd predicted for 2010
6.9 mbd from gas liquids
9 mbd predicted for 2010
ASPO calculates total oil production (all sources) to have been 80
million barrels a day (annualised) for 2005.
ASPO predicts total oil production (all sources) will be 86 million
barrels a day (annualised) in 2010
ASPO predicts total oil production (all sources) will be 80 million
barrels a day (annualised) in 2015, mainly due to decline in Russia and
'other countries' - Mexico, Venezuala, Nigeria,
North Africa, China, India etc.
Saudi Arabian production is pretty much
flat. Domestic oil consumption is up 13% over year end 2004.
produced 9.55 million barrels a day of crude + condensate, and 1.55
million barrels a day of other liquids, according to the EIA. This represents almost 100% of their capacity. As Saudi
Arabia consumed 2 million barrels a day of their own production, 9.1
million barrels a day was available for export.
Russia's production is up about 2.5%. Domestic
oil consumption is also up 13% over year end 2004.
Mexico's production is probably flat or declining slightly.
Iraq produced less oil than in 2004.
The North Sea produced about 400,000
barrels of oil a day less than in 2004.
Norways oil production decline was 7%.
Dubai is now producing only
around100,000 barrels a day
China imported 130 million
tonnes of crude oil - 3.3% more than
in 2004. About 43% of China's oil needs are now met from imports. It is
now the second largest oil importer in the world, after
China is yet to start filling its strategic reserves.
average of 466,386 tonnes of gasoline a month, mostly to Southeast
authorised the increase its 727 million
reserves of crude to 1 billion barrels.
USA produced about 400,000 barrels of oil a day less than in 2004. Of
this, about 300,000 barrels a day reduction is attributable to damage
from hurricane Katrina. That which is not now back on line or under
current repair will be permanently lost.
USA is the most intensively explored and drilled country in the world.
USA produces about 8% of the worlds oil. There are now
506,000 producing oil wells in
USA. Average production per well is a little over 10 barrels of crude a
Canada, the USA's first equal major supplier of oil (with Mexico) had
static production averaged over 2005 relative to 2004, but increased
production in Q4 2005.
USA imports 10.126 million barrels of
crude oil a day - the highest annual amount ever recorded.
about 60% of the oil it uses.
USA now imports about
584 million barrels of oil from Canada every year.
USA now imports nearly 584 million barrels of oil from Mexico.
USA imports a little less (548 million barrels a
year) from Saudi Arabia.
USA imports around 475 million barrels from Venezuela.
USA imports about 400 million barrels a year from Nigeria.
USA's Iraq gives 256
million barrels a year,
USA gets nearly 110 million barrels a year from Angola and UK.
Smaller amounts come from Algeria and Kuwait.
USA is heavily dependant on Canada, Mexico,
Venezuela, Nigeria and Saudi Arabia for its imported oil.
Of these countries, Canadian production cannot be increased,
Mexico's giant Cantarell field has started to decline, Saudi Arabia is
sound, Venezuela is sound, and Nigeria may well become so unstable
oil exports are severely cut.
The European Union countries now import 9.8 million barrels of oil per
Natural gas prices
18.6% higher than in 2004.
UK moves from being a nett gas exporter to being a nett gas importer.
USA used 22 trillion feet of natural gas - a lower consumption rate
than a decade ago. Even so, demand remains strong, but production from
larger fields is declining. More wells than ever have to be drilled to
keep up supply, but new finds are small, and relatively low
new natural gas wells were drilled this year
Key volume oil suppliers
Russia and Saudi Arabia, both with mature and declining giant and
supergiant fields, are the key volume producers
world market. Both are squeezing the sponge hard - Russia is squeezing
hardest, and have a smaller sponge.
Oil companies - Exxon
makes a net profit of $US10.7
billion for the last quarter. This is the highest
quarterly profit in history
for a USA company. Exxon Mobil is the world's largest publicly traded
Nuclear Fuel - Current rates of use of low-cost uranium mean reserves
exhausted in 20 years. Breeder reactors, which create dangerous
fissible material, would have to be used after that.
Renewable energy - according to the
United Nations Environment Program,
global investment in renewable energy - particularly solar, wind and
biofuel - was $US80 billion.
'Secret US plans for Iraq's oil' story reported by Greg Palast.
Published by BBC NEWS: 2005/03/17 15:41:31 GMT
Aleklett, K,Campbell, CJ. 'The Peak
and Decline of World Oil and Gas Production'
published by the
Association for the Study of Peak Oil and Gas. www.asponews.org .
Bakhtiari, AM. 2002. '2002 to see birth of
New World Energy Order'
Oil and Gas Journal, January 7, 2002.
Campbell, CJ. 1999.
'The imminent Peak of World Oil Production'.
Presentation to a House of Commons All-Party Committee on July 7 1999.
BP Ltd 'Petroleum Review
Deffeyes, Kenneth S.2001. 'Peak of world oil
Paper no. 83-0,Geological Society of America Annual
Meeting, November 2001. gsa.confex.com
'A New American Century? Iraq and the hidden euro-dollar wars'
Hirsch, Bezdek and
Wendlings report 'The
Peaking of World Oil production: Impacts, Mitigation, & Risk
Management', in a March 2005 report to the US Department
Simmons, MR. 2002. 'The World`s Giant Oilfields'
M. King Hubbert Center for Petroleum Supply Studies, Colorado
School of Mines, January 2002.
2004. 'The peak oil debate: crisis or comedy?' Presentation at the SPE
Technical Conference September 27, 2004, held at Houston, Texas, USA.
U.S. Department of State.
Foreign Relations of the United States. 1945, viii, 45, cited in Joyce
and Gabriel Kolko, The limits of power, Harper & Row, 1972
Oil Corporations and U.S. Foreign Policy, report to the Committee
on Foreign Relations, U.S. Senate, 2 Jan 1975
2005 Sustainable Living Organisation
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