Dr Benny Peiser: Shale oil revolution changes the energy and geopolitics landscape

Posted: November 12, 2012 by Rog Tallbloke in Carbon cycle, Energy, government, Politics

My thanks to Dr Benny Peiser of the GWPF for this energy bulletin:


A shale oil boom means the U.S. will overtake Saudi Arabia as the world’s largest oil producer by 2020, a radical shift that could profoundly transform not just the world’s energy supplies, but also its geopolitics, the International Energy Agency said Monday. This major shift will be driven by the faster-than-expected development of hydrocarbon resources locked in shale and other tight rock that have just started to be unlocked by a new combination of technologies called hydraulic fracturing. –Benoit Faucon, The Wall Street Journal, 12 November 2012 (http://online.wsj.com/article/SB10001424127887323894704578114492856065064.html)

Some in the U.S. are already questioning the reasons for keeping U.S. warships in the Persian Gulf. “It’s insane that we have the Fifth Fleet of the U.S. Navy tied up there to protect oil that ends up in China and Europe,” T. Boone Pickens, chief executive of energy-focused hedge fund BP Capital Management, was quoted as saying last week in U.S. magazine Parade. –Benoit Faucon, The Wall Street Journal, 12 November 2012 (http://online.wsj.com/article/SB10001424127887323894704578114492856065064.html)

OPEC acknowledged for the first time on Thursday that technology for extracting oil and gas from shale is changing the global supply picture significantly, and said demand for crude will rise more slowly than it had previously expected. In its annual World Oil Outlook, OPEC cut its forecast of global oil demand to 2016 due to economic weakness and also increased its forecast of supplies from countries outside the 12-nation exporters’ group. “Given recent significant increases in North American shale oil and shale gas production, it is now clear that these resources might play an increasingly important role in non-OPEC medium- and long-term supply prospects,” the Organization of the Petroleum Exporting Countries said in the report. –Alex Lawler, Reuters, 8 November, 2012 (http://www.reuters.com/article/2012/11/08/opec-oil-idUSL9E8GF05720121108)

A half mile below the ground at Prudhoe Bay, above the vast oil field that helped trigger construction of the trans-Alaska pipeline, a drill rig has tapped what might one day be the next big energy source. The Department of Energy and industry partners over two winters drilled into a reservoir of methane hydrate. The world has a lot of methane hydrate. A Minerals Management Service study in 2008 estimated methane hydrate resources in the northern Gulf of Mexico at 21,000 trillion cubic feet, or 100 times current U.S. reserves of natural gas. The combined energy content of methane hydrate may exceed all other known fossil fuels, according to the DOE. –Associated Press, 12 November 2012 (http://www.usatoday.com/story/money/business/2012/11/11/alaska-ice-energy-source/1697387/)

Looking at Tuesday’s election results, it’s clear the United States has morphed into five distinct political nations. In political terms there are two solid blue nations, perched on opposite coasts, that have formed a large and powerful bloc. Opposing them are two almost equally red countries, which include the historic Confederacy as well as the vast open reaches between the Texas panhandle and the Canadian border. Between these two largely immovable blocs stands the fifth nation – essentially the Great Lakes industrial heartland. By winning this territory – which could be called “Bailout Nation” – President Barack Obama built a winning coalition. Though this part of the country has suffered economic decline and demographic stagnation for decades, it is now emerging, as former President George W. Bush would put it, as “the decider” of America’s political fate. –Joel Kotkin, Reuters, 8 November 2012 (http://blogs.reuters.com/great-debate/2012/11/08/why-its-all-about-ohio/)

Energy costs are stifling growth across the North East, according to a study by the region’s largest business membership organisation. Over a third of members responding to a North East Chamber of Commerce survey felt that the increase in costs were hampering recovery from recession, while almost two thirds of businesses said they were affected by rising transport fuel bills. “The North-East is an energy intensive region because it has thriving manufacturing and engineering sectors. Current policy is effectively punishing us, which is nonsensical given we are trying to rebalance away from an over-reliance upon the service sector.” –Andy Richardson, The Northern Echo, 12 November 2012 (http://www.thenorthernecho.co.uk/business/news/10038633.Energy_costs_are_barrier_to_growth/)

Two of Britain’s largest energy companies have broken ranks with their peers and have urged the Government to ditch a radical plan to make electricity generation almost entirely green by 2030. –Tim Webb & Michael Savage, The Times, 12 November 2012 (http://www.thegwpf.org/dissent-clouds-future-britains-green-energy-targets/)

1) Shale Boom to Turn US Into World’s Largest Oil Producer – The Wall Street Journal, 12 November 2012 (http://online.wsj.com/article/SB10001424127887323894704578114492856065064.html)

2) OPEC’s Trauma: The World Has Too Much Oil – Reuters, 8 November, 2012 (http://www.reuters.com/article/2012/11/08/opec-oil-idUSL9E8GF05720121108)

3) Green Trauma: Enough Energy For 1000 Years As Methane Hydrates Is Tested As Possible New Energy Source – Associated Press, 12 November 2012 (http://www.usatoday.com/story/money/business/2012/11/11/alaska-ice-energy-source/1697387/)

4) Joel Kotkin: Energy & The Five Nations Of American Politics – Reuters, 8 November 2012 (http://blogs.reuters.com/great-debate/2012/11/08/why-its-all-about-ohio/)

5) Green Britain: Rising Energy Costs Barrier To Economic Growth – The Northern Echo, 12 November 2012 (http://www.thenorthernecho.co.uk/business/news/10038633.Energy_costs_are_barrier_to_growth/)

6) UK Government Deadlocked Over Green Energy Bill – Financial Times, 12 November 2012 (http://www.ft.com/cms/s/0/a6c4320a-2c16-11e2-8582-00144feabdc0.html)

7) Dissent Clouds Future Of Britain’s Green Energy Targets – The Times, 12 November 2012 (http://www.thegwpf.org/dissent-clouds-future-britains-green-energy-targets/)

8) And Finally: Chris Huhne Cashes In His Green Deal – Mail on Sunday, 11 November 2012 (http://www.dailymail.co.uk/news/article-2231145/Huhne-gets-job-energy-adviser-437-hour-company-provides-advice-cavity-wall-loft-insulation.html)

  1. Michael Hart says:

    Some years ago, I don’t know if it was true, I recall reading that the US spent more supporting a semi-permanent fleet in the Persian/Arabian Gulf than was actually spent on oil imports from the region.

    The argument could easily be made that some of those petro-dollars ended up in Osama Bin-Laden’s bank account, so it’s good to hear that relief may be in sight. And more US coal exports might help offset some of China’s trade surplus with the US.

    I’m not going to lose much sleep over people at the IPCC fretting about that. In time China will introduce it’s own clean air standards. Whether any of this thinking really lies behind the EPA relentlessly turning the screw on coal is perhaps matter for a different debate.

  2. J Martin says:

    So US business will return to a more competitive position while UK business continues to pay a high price for our politicians co2 hypnosis. About time we got fracking in the UK.

    Looking at the lower part of this graph:


    I see that the 70s cooling was preceded by a longer decline in the previous solar period and also a low maximum in the period up to 1970.
    Comparing that to the decline we’re about to enter, it is preceded by a still longer decline and a still lower maximum.
    So cooling may make it’s presence publicly felt really quite soon if it follows the 1970s pattern. And that will be the beginning of the end for CAGW.

    Given the poor thermal state of much of the UK housing stock, fracking will then quickly become the number one issue on the public agenda.

    We know we have gas. But do we also have frackable oil ?

  3. tallbloke says:

    This may be of interest, I’m not sure – haven’t had time to read it.

  4. adolfogiurfa says:

    A shale oil boom means the U.S. will overtake Saudi Arabia as the world’s largest oil producer by 2020, a radical shift that could profoundly transform not just the world’s energy supplies, but also its geopolitic…
    “They” will find a way to avoid it, perhaps blaming it the next solar minimum….

  5. Brian H says:

    I did. Don’t. A prolonged paean to himself. Many embedded contradictions, an firm but uniformed opinions.

  6. Brian H says:

    typo: and firm …