Oil and Gas Aplenty....

The end of Peak Oil!

THREE summers ago, the world’s supertankers were racing across the oceans as fast as they could to deliver oil to markets growing increasingly thirsty for energy. Americans were grumbling about paying as much as $4 a gallon for gasoline, as the price of crude oil leapt to $147 a barrel. Natural gas prices were vaulting too, sending home electricity bills soaring.

A book making the rounds at the time, “Twilight in the Desert,” by Matthew R. Simmons, seemed to sum up the conventional wisdom: the age of cheap, plentiful oil and gas was over. “Sooner or later, the worldwide use of oil must peak,” the book concluded, “because oil, like the other two fossil fuels, coal and natural gas, is nonrenewable.”

But no sooner did the demand-and-supply equation shift out of kilter than it swung back into something more palatable and familiar. Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.

Meanwhile, another wave of natural gas drilling has taken off in shale rock fields across the United States, and more shale gas drilling is just beginning in Europe and Asia. Add to that an increase in liquefied natural gas export terminals around the world that connected gas, which once had to be flared off, to the world market, and gas prices have plummeted.

Energy experts now predict decades of residential and commercial power at reasonable prices. Simply put, the world of energy has once again been turned upside down.

“Oil and gas will continue to be pillars for global energy supply for decades to come,” said James Burkhard, a managing director of IHS CERA, an energy consulting firm. “The competitiveness of oil and gas and the scale at which they are produced mean that there are no readily available substitutes in either one year or 20 years.”