http://www.canada.com/national/story.ht ... 033722fb8c
Crude prices reach $45 US a barrel
Yeoh En-Lai
Canadian Press
August 10, 2004
SINGAPORE (AP) - Crude oil prices soared to new highs Tuesday, stopping just short of $45 US per barrel, after Iraq said it had stopped pumping oil from its key southern oil fields because it feared militant attacks on key pipelines.
Crude was at $44.80 at 1:50 a.m. EDT in after-hours trade on the New York Mercantile Exchange, after earlier it hit an all-time high of $44.99 per barrel. The market was also dealt another blow from the ongoing battle between Russian authorities and embattled oil giant Yukos. On Monday, authorities renewed their seizure of assets from its key production unit while a court rejected its appeal against the freezing of another subsidiary's assets.
"There's quite a bit of hysteria in the market. Terrorism fears . . . and when you add both Yukos and the Middle East, that's adding well over $10 to the price (per barrel)," said ANZ Bank oil analyst Daniel Hynes from Melbourne, Australia.
"It has certainly raised fears even more that supply is struggling to meet demand at the moment. We'll probably see the price drive towards $45," he added.
The market also continues to be jittery over OPEC supply claims and unrest in member countries Nigeria and Venezuela.
On Monday, pumping to the southern port of Basra - Iraq's main export outlet - was halted over fears that followers of radical Muslim cleric Muqtada al-Sadr would blow up pipelines there.
About 1.8 million barrels per day, or 90 per cent of Iraq's exports, move through Basra, and any shutdown in the flow of Iraq's main money earner would badly hamper reconstruction efforts. Iraq's other export line - from the north to Turkey - is already out of operation.
But Hynes said the effect on the markets of Iraq's move was largely psychological and that there would probably be more concern over Yukos in the long run.
"I don't think the market relies on the supply (in Iraq) yet. It was a knee-jerk reaction," he said.
OPEC president, Purnomo Yusgiantoro, said last week the cartel was ready to add another 1.5 million barrels a day to the market, but analysts and traders have responded warily, saying the market was already near capacity.
The group is already pumping out 30 million barrels a day and would need to fill gaps in supply from Yukos.
Yukos officials have said its production of 1.7 million barrels per day could suffer if the state does not give it access to frozen bank accounts and sells off the Yuganskneftegaz subsidiary, its main cash earner.
© The Canadian Press 2004
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http://www.popsci.com/popsci/science/ar ... 31,00.html
Geologists say the end is nigh. New recovery tech may tell a different story.
by Kevin Kelleher August 2004
Quick, how many years will it be before the world runs out of oil? Don't know? Join the club. Actually, choose one of several clubs, each of which vehemently disagrees with the others on how much usable crude is left on the earth. The question is far from an academic exercise: This year oil hit a near record-high $40 a barrel, and Royal Dutch/Shell Group downgraded its reserves by 4.5 billion barrels.
While consumers pay for perceived shortages at the pump, scientists and economists struggle to reach consensus over "proven oil reserves," or how much oil you can realistically mine before recovery costs outstrip profits. Economist Leonardo Maugeri of Italian energy company Eni fired up the debate this May with an essay in Science that accused the "oil doomsters" of crying wolf.
Chief among the pessimists is the Association for the Study of Peak Oil, a group of European scientists who estimate that maximum oil production around the globe will peak in 2008 as demand rises from developing economies such as China. "If you squeezed all the oil in Iraq into a single bottle, you could fill four glasses, with the world consuming one glass of oil each year," says physicist and ASPO president Kjell Aleklett. "We've consumed nine bottles since oil was discovered, and we have another 9 or 10 in the refrigerator. How many more are there? Some say five or six, but we say three."
Others believe, like Maugeri, that the number of glasses is virtually limitless. John Felmy, chief economist at the American Petroleum Institute, argues that peak oil- production estimates are so far off that for all practical purposes we might as well act as if oil will flow forever. "Ever since oil was first harvested in the 1800s, people have said we'd run out of the stuff," Felmy says. In the 1880s a Standard Oil executive sold off shares in the company out of fear that its reserves were close to drying up. The Club of Rome, a nonprofit global think tank, said in the 1970s that we'd hit peak oil in 2003. It didn't happen.
If there is an end to the debate, advanced oil-recovery technologies will most likely find it. A new seismic survey technique, for instance, sends sound waves of varying frequencies thousands of meters belowground. Microphones arrayed aboveground record the reflected signals, and computer software models a 3-D portrait of possible oil hot spots. The surveys have now added a fourth dimension, creating a time-lapse simulation of fluid movements.
Companies are also finding sophisticated ways to mine more oil from existing wells. Flexible, coiled-tube drills that carve out horizontal side paths are a marked improvement over conventional, rigid drills that move only straight down. Using such technology, companies hope to soon harvest 50 to 60 percent of oil from existing wells, up from today's 35 percent.
Biotechnology, too, is keeping the black gold flowing. University of Alberta scientists are searching for microorganisms that could dilute viscous, hard-to-recover oil and make it flow more freely.
"Technology can help push peak oil production further and further out," says Satish Pai, vice president of oilfield technologies for Schlumberger Limited. But only time will tell if it's enough.
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How long do we have, doctor?
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