Debunking the Energy Myths - By Tony Hayward (BP's CEO)

[OKIsItJustMe]

http://www.times.spb.ru/index.php?action_id=2&story_id=26304

Debunking the Energy Myths

By Tony Hayward

When I became BP chief executive just over a year ago, I warned that the supply and demand balance for energy was very tight. But, like most people, I never expected to see the oil price go quite as high quite as rapidly as it has in the past few months.

Unsurprisingly, with consumers and businesses everywhere facing much higher fuel costs, emotions are running high. I understand those feelings. Governments and the energy industry are urgently looking for solutions. But if we are to act sensibly, we must start with the facts. We must accept the world as it is, not as we hope for it to be.

Last week, BP launched the latest edition of the BP Statistical Review of World Energy, which exposes some myths that need to be put to rest if we are to find the right solutions to big global problems, such as energy security and climate change.

Myth No. 1 is that high prices are caused by technical factors, such as speculation. While these factors may have an impact on the margins, the data clearly show that high prices are really caused by economic fundamentals.

...

[rurallib]

1. Myth #1 - thanks to a backroom deal with the Bush administr----

oopsie, that one is true I guess.

[1Hippiechick]

2. Well, it's like this...I have to look at the author of the piece and be a little skeptical...

[kgrandia]

3. Not reassuring

"Myth No. 2 is that the world is running out of hydrocarbons. Not so. The world has ample resources, with more than 40 years of proven oil reserves, 60 years of natural gas and 130 years of coal. The problems in bringing on new production are not so much below ground as above it, and not geological but political."

Only 40 years of proven oil reserves in not very reassuring - all the more reason to start investing in renewable right now!

[JFreitas]

4. Crap

Jeremy Leggett did a good job of saying eaxctly what was wrong with BPs numbers, namely that they continue to use the same old reserves numbers given by the OPEC companies (you know, the ones that don't change since the early 80's), in a recent issue of The Guardian. Also, BP's review comes with a HUGE caveat in the form of a disclaimer over the figures used in it.


Spoiling the barrel
BP's review of global reserves is tainted by 'political' oil, and distorts our view of future supply.

(...)

But that statement, as with so much about today's oil industry, demands closer inspection. Tiny printing on the inside cover of the document reveals a catch-all caveat. The information presented comes not from primary BP research but from "official sources and third-party data" and "does not necessarily represent BP's view of proved reserves by country". This astonishing get-out clause has been inserted in the BP review every year since Shell was caught lying about its reserves in 2004.

At the seminar releasing the review, I asked BP's lead author whether he could put an uncertainty range on the data in the report, since it came with a health warning in the small print. He wasn't able to, other than to confess that there were certainly "some good apples and some bad apples" in among the data from the official sources and the third parties. Those of us who worry about peak oil know about a few of these bad apples. That is one of the many reasons we are worried.

(...)

Many in and around the oil industry believe that the 300 billion barrels of Opec reserves additions from the 1980s are - let us put it politely - political oil. Among those who have spoken out about this overstatement is the former head of production at Saudi Aramco, Sadad al-Husseini. Hayward's reliable source for energy data would not pass the first hour in a court of inquiry were people like al-Husseini summoned as witnesse

[tinrobot]

5. Myth #1 busted.

Myth No. 1 is that high prices are caused by technical factors, such as speculation.

George Soros: rocketing oil price is a bubble
In an interview with The Daily Telegraph, Mr Soros said that although the weak dollar, ebbing Middle Eastern supply and record Chinese demand could explain some of the increase in energy prices, the crude oil market had been significantly affected by speculation.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnsoros126.xml

Are Pension Funds Fueling High Oil?
f you're wondering why driving to work has gotten so expensive, you might want to peruse your pension fund's investments. That's because speculation by institutional investors pouring money into the commodities market may be largely to blame for spiking oil prices, according to testimony on May 20 before the Senate Committee on Homeland Security & Governmental Affairs.
http://www.businessweek.com/bwdaily/dnflash/content/may2008/db20080520_524455.htm

OPEC chief blames speculation, weak U.S. dollar for rocketing oil prices
"When we see there is a shortage of supply, we will act," he said. But in the present situation, "even if we increase output tomorrow, the prices will not come down because of speculation and because of a weak dollar."
http://news.xinhuanet.com/english/2008-05/23/content_8235386.htm

Speculators, not OPEC, 'causing oil price spike'
A former Iraqi oil minister says record high oil prices are more to do with speculators, including central banks, than supply and demand.
http://www.abc.net.au/news/stories/2008/06/10/2269901.htm

----

For some reason I find these stories a little more believable than the stories of the CEO of a company reaping huge profits off the high price of oil.