Saudi oil on Al Jazeera
During this news piece Mamdouh Salameh (6:30 min. into the interview), an energy consultant to the World Bank makes his views about Saudi oil production and net exports very clear. Later in the interview he expresses his forecast of oil prices by 2015 independent of what happens with Iran. There is also dscussion throughout the interview by the two other commentators about the situation involving Iran that gives a clearly different perspective than is seen on U.S. based media.
Drilling has doubled from 1990 levels, production has not.
David Hughes has posted an interesting analysis of the strange market situation that exists today for natural gas.
“Natural gas prices have declined to below $3.00/mcf, levels not seen for years, yet the EIA posted the highest gas production ever in October, 2011. U.S. gas production is growing despite annual well completion rates that are half that at the peak of the drilling boom in 2008, when gas price topped $12.00/mcf. Proponents of shale gas as a “game changer” suggest that, despite the well known high decline rates of shale gas wells, their productivity is sufficient to grow production with far fewer wells at historically low prices. Others, such as Arthur Berman, claim that shale gas plays require much higher prices to be economic. The answer may lie in the gas produced in association with oil drilling, which is near all time historical highs.”
For those interested in some of the pipeline options being explored in Canada for transporting the tar sands oil to the global market I recommend reading a report David prepared late last year on the Northern Gateway Pipeline (PDF). This pipeline would travel west from Alberta to the British Columbia coast at Kitimat where tankers would have access to the Asian oil markets.
Tar sands oil will make its way to the much higher priced global market whether by pipeline or unit trains. The global oil markets are just too strong a draw to be avoided.
One of the key questions David asks is whether this is really in Canadian’s best interest in terms of their own energy security.