T. Boone Pickens States We Have Hit Global Conventional Oil Peak - AP

[hatrack]

DOHA, Qatar — Legendary Texas oilman T. Boone Pickens sees today's stubbornly high oil price as evidence that daily global production capacity is at — or very near — its peak. If demand for crude oil rises beyond the current global output of roughly 85 million barrels per day, Pickens told The Associated Press, prices will rise to compensate and alternative sources of energy will begin to replace petroleum.

"If I'm right, we're already at the peak," Pickens said earlier this week in Doha, on the sidelines of the Forbes magazine CEO conference. "The price will have to go up." The 78-year-old former wildcatter, who now heads the Dallas-based hedge fund BP Capital, is credited with a history of prescient predictions about the direction of oil markets. His bets have paid off handsomely. BP Capital's returns have exceeded 800 percent since 2001, he said.

Still, most industry and government analysts are far less pessimistic than the straight-talking Texan. Most believe petroleum will be a growing energy source for decades. The U.S. government expects oil demand to rise to 120 million barrels a day by 2030 and says a peak in output — the point at which half of the world's reserves are depleted — won't arrive until mid-century. Forbes publisher Steve Forbes challenged Pickens' assumptions during an exchange in the conference, saying political — not technological, or geological — roadblocks stood in the way of increasing the world's oil output. With the right incentives in places such as Mexico more oil could be brought to market and prices could drop, Forbes said.

Pickens responded by saying that Mexico is a declining producer of oil, as are most other countries, naming the United States, Norway, Britain, Canada and soon, Russia. "The world has been looked at," Pickens told Forbes. "There's still oil to be found, but not in the quantities we've seen in the past. The big fields have been found and the smaller fields, well, there's not enough of them to replenish the base." Pickens predicted oil prices will rise this year to an annual average of around $70 per barrel. On Wednesday, prices settled at $61.79 on the New York Mercantile Exchange.

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http://www.chron.com/disp/story.mpl/business/energy/4592240.html

[GliderGuider]

1. Pickens, Simmons, Deffeyes - the Triplets of Doom

It's here.

[shance]

2. Why would someone take his word for it?

Guess who benefits from the so called "oil peak"?

Just guess.

[phantom power]

3. I disagree.

A drug dealer does *not* benefit by announcing to his clientelle that his supply is going off-line.

OPEC had a very very good thing going 10 years ago. Selling oil to a stable world economy at $20/barrel was making them richer than God. There is absolutely no upside to trying to convince the world that peak oil is here. They're doing their damndest to try and hide it. Not that it's going to do much good. It's a move of desperation.

[GliderGuider]

6. Yeah, if this theory held water, you'd have XOM, Chevron, BP etc. all making the same announcement.

Instead they're going to almost comical lengths to deny that there's anything to see here.

Nope, Pickens' announcement is the bell of truth tolling for those with ears.

[The2ndWheel]

7. The habitat?

Not humans obviously. Without cheap energy, most of us die, or become slaves.

I'll go with habitat.

Good answer! Good answer!

Let's go to the board. Show...me...habitat!

Ding, ding, ding, ding!

[NickB79]

9. In the long run, NOT the oil companies

There was a very good reason OPEC kept prices as low as they did for so long. By keeping oil prices at a reasonable price of ~$20/barrel, they ensured that world economies didn't fall into recession due to high energy prices, as happened after they created the 1973 oil embargo. That embargo was bad for business, because in a recession people use less oil. It also pushed the development of alternative energy research, which OPEC hates. They opened the taps in the 80's partly to crush the development of alternatives and fuel-efficient cars. By leaving oil prices in the $60+ range for so long, they're losing billions on future oil sales, as people buy hybrids and small, fuel-efficient cars instead of gas-guzzling SUV's. They have no reason in the long term to keep oil prices as high as they are, unless they no longer have control over it like they used to.

[bighughdiehl]

4. I know you guys in E/E hate me, but.....

and I have been negligent in general posting at DU this past week or so, but bear with me:

1. Oil prices are down more than 20% since their highs last summer.
2. If we are really 2 years post-peak as many claim, we would have $100/barrel by now, since the miniscule demand destruction so far at 60-70 probably wouldn't be nearly enough to make up for 2 years declining production.
3. If this is wrong,yet another failed prediction, it will turn off people to the issue once and for all, which wouldn't be good.
4. Anyone ever consider that Pickens is a corporate scumbag? He could simply be trying to scare up the price? Same with Simmons(very much in bed with the junta via Cheney's energy task force), et. al.
5. I will believe we are post peak when we have sustained price for more than just a few months of about $80/barrel(a little over $3 at the pump), in the absence of disruptions.
6. Inventories of crude are sky high.

Am I the only one a tad skeptical for the reasons listed above?

[phantom power]

5. See my post above.

[jpak]

10. You are correct - our supply of petroleum is infinite

US crude production did NOT peak in 1970 (and decline under every presidential administration since Nixon).

Alaska North Slope crude production did NOT peak in 1988 (and decline under every presidential administration since Reagan).

North Sea oil production did NOT peak in 1999 (and decline every year since then).

Mexico's Cantarell field production did NOT peak in 2004 (and decline every year since then).

THERE IS NO SUCH THANG AS PEAK OIL - IT'S A LIBERAL FRAUD!!!!!11111

[GliderGuider]

11. Prices and Peaks

1. Peak oil has to do with the geological constraint on supply, it is mute on the question of demand. Price reflects the balance of supply and demand. Price and Peak have very different drivers, which is why it's foolish to look to price as a signal of the Peak.

2. The only way price could signal a peak is if the traders believed a peak had happened. All the people the traders listen to say things are fine, so the price can't reflect the peak, at least until evidence for it comes from other sources (like production numbers).

3. I don't get the point of this. Should people like Simmons, Pickens and Deffeyes just keep their mouths shut? What if they're right?

4. If this is the case, why have the really big players - XOM, Total, Chevron, BP, etc not said the same thing? Wouldn't it be as much or more to their benefit to "scare up the price"? Why is KSA making soothing noises about "excess capacity"? Don't they want to make more money too?

5. Why would you look to the price rather than production numbers to determine the peak? Price is as best an imperfect, lagging indicator. Production figures are much more immediate and reasonably accurate. While they can be manipulated down, they can't be manipulated up...

6. What do inventory levels have to do with Peak Oil? They do have a bearing on price, but have precious little to do with oil field decline rates. Why would you look to them for a signal of a geological peak?

Here's how I see the situation:

1. Crude Oil & Lease Condensate production has been flat for two years, and declining for 18 months or more.

2. Three quarters of the world's oil producing countries are in decline.

3. The North Sea is crashing, Cantarell is crashing, KSA is down 8& to 10% over the last year.

4. Here's the EIA's comparison of the global data for 2006 compared to 2005:

• Crude Oil and Condensate: 73.5 Mb/d (down 0.2)


• Natural Gas Liquids (NGLs): 7.9 Mb/d (up 0.14)


• Other Liquids: 3.3 Mb/d (up 0.08)


• Total Liquids: 84.6 Mb/d (up an insignificant 0.02)

5. This has all happened in the presence of Chinese and Indian demand growth.

Taken together, that sure looks like a peak to me.

[bighughdiehl]

12. Ok, but.....

If these figures are accurate, why is oil only at $60? That is not enough to create enough demand destruction to keep inventories from being drawn down if we are past peak, and inventories are HIGH. Traders may not care about peak oil, but they do look at inventories(and production). Something they are looking at(and, let's face it, I'm sure they have access to better info than us peasants) is telling them the market is well supllied.
I'm not saying there is NO problem, but probably not as imminent as some say. Elementary, Watson.

[phantom power]

13. Your theory seems to be based on the assumption that...

oil "must" trade at $100/barrel once peak oil sets in. Why isn't $60/barrel high enough for you? That's triple what it was 7 years ago.

[phantom power]

14. One other factor to consider:

there has already been demand destruction in poorer countries. The price of oil went up to $60/barrel, and that was enough to price-out poorer nations. They're buying less oil, which temporarily stabilized demand for us richer nations. We can still pay that price. As the Big Four continue to collapse, I would expect even the richer nations to start feeling the shortages within a year or two. Then you will get your $100/barrel oil.

[GliderGuider]

15. It's our old friend the "undulating plateau"

The market is indeed well supplied right now. There's no contradiction between that and being at peak. I wouldn't expect the post-peak decline to get rolling in earnest for two or three years yet, and even then we'll see a decline trend in the fractions of a percent for a few years. The world production curve isn't going to look like Cantarell.

"The Peak" is a bit of a mathematical construct. The first sign of it will be that production is unable to grow in the face of increasing demand and without any major above-ground impediments. Supply isn't growing right now, and demand is. Those two factors are necessary but not sufficient to call the peak. The remaining question that has to be answered is, "Is the supply failing to grow due to above- or below-ground factors?" There are always above-ground factors in play - Nigerian rebels, the Iraqi fiasco, insufficient investment etc.

The argument is all about whether those above-ground factors outweigh the geological constraints, and how you would determine that given the lack of data transparency from big players like KSA. There will always be above-ground problems, so some degree of them should be considered structural - there will always be oil not getting pumped for one reason or another. The $64 billion question is, are the decline rates that have been identified so far steep enough that they couldn't be mitigated by some reasonable alleviation of the non-geological factors? For this, you need an accumulation of evidence. One decline (Lower 48) followed by another (Prudhoe) followed by another (North Sea) followed by another (Cantarell) followed by another (KSA) - eventually you have an accumulation of declines that can give you at least a heuristic estimate of how fast the whole system is depleting.

The picture is always clouded by opaque data, other sources of interference with production, assumptions about the volumes and time lines of new projects, etc. There are people beavering away on each of these issues, but you don't need to wait for all questions to be answered before making a call. Many people (me among them) have concluded that there is enough cumulative evidence to say the peak is now. There's not yet enough evidence to say how long the plateau will last, how soon we'll roll off the backside or how steep the initial decline might be. We will need to wait for more evidence to accumulate before we can answer any of these questions. But there is enough evidence IMO to say with reasonable certainty that the world's oil production rate has stopped growing for below-ground reasons. And that is the definition of the peak.

[ProSense]

8. T. Boone Pickens is a Swift Boat Liar!

2. T. Boone Pickens: Rudy Giuliani
Pickens is a billionaire Texas oilman who raised more than $200,000 for President Bush's re-election campaign in 2004 and gave millions of his own cash to Republican 527 committees, including $3 million to the Swift Boat Veterans for Truth. Pickens endorsed Giuliani last year and sits on the former New York City mayor's national finance committee.

link

He's one of Bush's Pioneer/Ranger

Sam Fox is another Ranger father of two Ranger sons. The Fox family's Harbour Group specializes in takeovers of manufacturing companies and has major investments in China. Sam Fox ironically told the St. Louis Post-Dispatch that he got involved in politics in the 1980s out of concern over the huge federal deficit. He was among 22 wealthy business leaders whom the president, who calls this donor "Foxie," invited to a 2001 lunch to discuss tax cuts for the rich.

The Pickens family of Dallas--which recently squabbled over its oil inheritance--had two members who raised more than $100,000 for Bush's campaigns. Three other family members took the 2000 Pioneer pledge but failed to reach their $100,000 target (John T., Michael K. and William C. Pickens). A T. Boone Pickens spokesperson says that he is not related to this Pickens family.

link

CORNWALL, Conn. – The son of billionaire oil tycoon T. Boone Pickens was charged with burglary after he was found hiding under a table in a fly fishing shop, authorities said.

Michael Pickens, 51, spent three days in jail following his arraignment Monday in Bantam Superior Court.

link

Michael O. Pickens, the son of the oil tycoon Boone Pickens, pleaded guilty yesterday to three counts of securities fraud.

The younger Mr. Pickens, 52, of Nocona, Tex., entered the plea in United States District Court in Manhattan after signing an agreement calling for a prison sentence of up to 5 years and 11 months. Sentencing was scheduled for Jan. 30.

Mr. Pickens was arrested July 18, 2005, and accused of sending hundreds of thousands of fraudulent faxes to induce investors to buy three stocks.

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