At the risk someone is missing this vital Associated Press article, here are the key paragraphs:
OPEC signaled it would boost oil production and said it would ask other major oil producers outside the group such as Mexico to do so as well to make up for lost crude exports from sabotaged pipelines in Iraq.
But analysts said pumping the extra oil would strain the world’s limited spare production capacity and leave a wafer-thin cushion with which to absorb any future supply disruptions. [And] Russia and Norway -- the world’s second and third largest exporters after Saudi Arabia -- said they could do little to help.
“We are producing as much as we can,” the director of Russia’s Federal Energy Agency, Sergei Oganesyan, told the Interfax news agency. In Norway, Deputy Oil Minister Oeyvind Haabrekke told the state radio network NRK that his country had “no excess capacity and no possibility of increasing production.”
There was no immediate response from Mexico’s energy department.
The most worrisome aspect of this clip is the disagreement between the Organization of the Petroleum Exporting Countries, independent oil-producing nations and industry analysts. There’s no collusion that fits these facts, no conspiracy to keep prices high or produce an urgency to find more oil instead of energy alternatives. Keeping prices high would have had OPEC claiming inability to produce more oil, not the independents and analysts. And the statements from Russia and Norway are too blunt and alarming to inspire long-term exploration, since it’s widely believed that there’s not much oil left in the Earth.
On that topic, read what Washington, D.C.-based business writer James Srodes had to say on the topic in the Oct. 19, 1998, issue of Barron’s:
It was only last November that two top oil geologists presented papers on the impending oil depletion to a conference of the International Energy Agency of the United Nations in Paris. Colin J. Campbell, an Oxford-trained geologist, and his French counterpart, Jean H. Laherrere, have been senior geologists for firms such as Total, Texaco and Amoco for more than 40 years. Currently they work at the industry think tank Petroconsultants in Geneva.
The two geologists were so convincing that the IEA dropped a generation-old view that held oil discoveries to be merely a function of price -- that is, the higher the price the more oil will be found. Last March, at the Moscow summit of the Group of Eight major industrial nations, the IEA presented its own paper to the national leaders accepting the Campbell-Laherrere view that sometime between 2010 and 2020 the crisis will be upon us full blast. The Campbell-Laherrere analysis also cut the reserve of oil currently known to be in the ground to about 850 billion barrels.
Since then, others have joined in the public debate. Recently, Franco Bernabe, chief executive of the Italian oil company ENI SpA, has given a series of interviews in which he moved the doomsday clock forward to between 2000 and 2005. He forecast that today’s world price for a barrel of oil would soon begin to rise from its $15 base and quickly pass the $30 mark. He forecast that both the British and Norwegian sides of the North Sea will begin to see production declines within three years. The United States passed its peak (even with Alaska) long ago. Left open for argument is the amount of new oil left to be discovered in the Third World.
It’s not too far-fetched to suggest that the planet is hitting that full-blast crisis, especially since oil-producing nations are showing pumping capacity to be barely adequate and inadequate if there are “future supply disruptions” -- a phrase that can be read to mean terrorist attacks like those made yesterday on Iraqi oil facilities.
More attacks are certain. Things are looking grim.
And only now are sales of sport utility vehicles, not just the Hummer, beginning to slow.