Thursday, June 04, 2009

current events

Princeton | In a few years, there will be an abundance of non-geological explanations for peak oil: OPEC cut back production to support the price. Investment in new oil sources was interrupted by the drop in the oil price. The Hubbert prediction did not involve the minutiae of the oil markets. It could well be that the oil-supply tail is wagging the world economic dog.

One of the available data sources is the Baker-Hughes count of the number of drilling rigs actively digging for oil or natural gas. The Hughes rig count dates back to 1944, when salesmen from Hughes Tool Company went to the active rigs to sell drill bits. Here are some recent counts for North America:

September 12, 2008 - 2031 rigs running

May 22, 2009 - 900 rigs running

The rig count was cut in half in 8 months. That's not the "drill, baby, drill" chant from the Republican National Convention.

A speculative news story says that the major international oil companies are eager to re-enter the oil business in Iraq. I have been in denial for 5 years, not wanting to admit that the principle reason for the Iraq War was getting the major oil companies back in business. But there they are, lining up, even before there is internal legislation in Iraq dividing up oil responsibilities and before the American Army pulls out. (No one is going to like my idea for staffing the residual US "advisory" force in Iraq. I would limit it to volunteer officers; no enlisted men at risk.)