Pipelines, Biofuels & Reserves
Reflecting on the content of this large Update, three main items jumped out as being especially noteworthy:
Pipelines, Biofuels & Reserves.
Pipelines
In Europe there is currently a frenzy going on to plan and project multiple pipelines to apparently try to secure the
fuels for the future of the continent. Plans are chasing each other and geopolitics seems to be the greatest driver,
more so than the actual need for oil and gas, which might not increase enough to cater for the need for quite some or
most of these pipelines. Whilst Europe is divided in its stance, based on differing perceptions of the apparent
problem, it is increasingly becoming a playfield in the struggle for control, apparently being in need for
“help” from far friends that seem to know so well what is good for it.
A host of articles is covering the subject in the Europe-sections.
Biofuels
Some encouraging news can be found around this theme. Whilst it has become clear that palm-oil is in many ways much
more destructive than hydrocarbon oil, due to the massive clearing of swamps and primary rainforest in the
plantation-region, and that grain-based ethanol and food-crop-replacing bio-fuel monocultures may be one road to
revolution and disaster, it is very encouraging to see that China has understood the danger of this very fast and is
banning grain-based ethanol and is actively searching for a right balance between food-crops and bio-fuel crops. It
is of course somewhat difficult to understand for many that, whilst substantial parts of humanity are starving and
dying from lack of food, others are transforming the main and basic food ingredients into a fuel that is being burnt
to run a car.
This gets an even harder edge when it becomes known that due to climate-change grain- and food production is going
down.
With the example of China a door may be opened to a better and more sustainable balance between the need for
bio-fuels and the long-term need for food. In the end you can”t feed on biodiesel and you can”t eat money
either.
Reserves
In the Middle East sections there are a few articles on a recent report that promised at least 100 bn barrel of oil
in the Western part of Iraq. This report has been given lots of attention, especially in the Western(-controlled)
media but has found much scepticism and some scorn with specialists from the area, who dismissed the report as being
politically motivated. This brings again to the surface that we actually do not know how much is hidden in oil- or
gas fields for real, being completely dependent on a very small club of people and companies that seem (or say) to
know, and almost all major sources of figures and statistics that copy these figures (and from each other).
In this there are two issues: one is the politically motivated stating of reserves, as we have seen with the Caspian, are seeing about the Arctic and now Iraq and in many cases in the Middle East.
The other issue is that reserves are being (over-)stated to help to maximize book-value, to help to maximize
“shareholders value”. This seems to be common practice among oil and gas-companies that are trading on
the “free-markets”. That this may be a practice that one day will back-fire is clear, as we will be
looking at fields that may suddenly be empty much earlier than expected.
That this may add to the speed in which peak oil&gas may be upon us is also clear.
So whilst there is some good news, many critical issues remain.
Not all that is shiny is real gold.
Enjoy the Update.
Alexander
Comments are always welcome at Alexander@gas-oil-power.com
