Newsletter, Second Quarter 2006

Published by the Energy Economics Education Foundation, Inc.
Editor: David L. Williams Contributing Editors: Paul McArdle, Tony Scanlan and Marshall Thomas

Second Quarter 2006

Download Entire Newsletter Editor's Notes

Read "Global Oil and Gas Depletion - A Letter to the Energy Modelling Community" By Roger W. Bentley
Page 6 Roger Bentley writes that geology and ‘P50’ discovery data indicate that many countries are past resource-limited peak of conventional oil production, and that the global conventional oil peak is close. Analysts often rely on proved reserves data, but these are very misleading and poor analysis has resulted. The world contains large quantities of non-conventional oil and oil substitutes, but all detailed current models show that these are unlikely to come on-stream fast enough to offset conventionals' decline.

Read "Oil Supply and Demand" By Olivier Rech
Page 15 Olivier Rech traces oil supply and demand from late 2003 to the present arguing that a new oil market paradigm has occurred. He notes that the strength in oil demand stemming from world economic growth has been augmented by an increasing need for mobility for passengers and freight. On the supply side, the rate of non-OPEC production growth has slowed considerably while OPEC’s excess supply capacity had virtually disappeared. While new production capacity is expected to come onstream by 2008, the oil market is expected to remain extremely vulnerable at least until then.

Read "The Environmentalists Struggle with Energy Security Or: If Maslow Were in Energy Politics" By Christoph Frei
Page 20 History suggests that energy policy priorities can be stratified similarly to the way Maslow structured his famous pyramid of human needs. Christoph Frei claims that access to energy, supply security, energy costs, environmental issues and social acceptance are not subject to trade-off, but to a hierarchy that underlies the importance of satisfying lower order needs before addressing the higher order ones.

Read "Evidence on Risk Preferences in E&P Operations: Examining the Decision to Evacuate" By Christopher Jablonowski
Page 24 Christopher Jablonowski examines the decision to evacuate offshore oil and gas facilities for hurricanes to identify the variables that drive these decisions. While most analysis of risk preferences in E&P has focused on financial decisions (e.g., auctions, hedging), this article summarizes research on the role of risk preferences in an real operational setting with life and death payoffs.

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Download Entire Newsletter	Editor's Notes

Read "Global Oil and Gas Depletion - A Letter to the Energy Modelling Community" By Roger W. Bentley Page 6	Roger Bentley writes that geology and ‘P50’ discovery data indicate that many countries are past resource-limited peak of conventional oil production, and that the global conventional oil peak is close. Analysts often rely on proved reserves data, but these are very misleading and poor analysis has resulted. The world contains large quantities of non-conventional oil and oil substitutes, but all detailed current models show that these are unlikely to come on-stream fast enough to offset conventionals' decline.
Read "Oil Supply and Demand" By Olivier Rech Page 15	Olivier Rech traces oil supply and demand from late 2003 to the present arguing that a new oil market paradigm has occurred. He notes that the strength in oil demand stemming from world economic growth has been augmented by an increasing need for mobility for passengers and freight. On the supply side, the rate of non-OPEC production growth has slowed considerably while OPEC’s excess supply capacity had virtually disappeared. While new production capacity is expected to come onstream by 2008, the oil market is expected to remain extremely vulnerable at least until then.
Read "The Environmentalists Struggle with Energy Security Or: If Maslow Were in Energy Politics" By Christoph Frei Page 20	History suggests that energy policy priorities can be stratified similarly to the way Maslow structured his famous pyramid of human needs. Christoph Frei claims that access to energy, supply security, energy costs, environmental issues and social acceptance are not subject to trade-off, but to a hierarchy that underlies the importance of satisfying lower order needs before addressing the higher order ones.
Read "Evidence on Risk Preferences in E&P Operations: Examining the Decision to Evacuate" By Christopher Jablonowski Page 24	Christopher Jablonowski examines the decision to evacuate offshore oil and gas facilities for hurricanes to identify the variables that drive these decisions. While most analysis of risk preferences in E&P has focused on financial decisions (e.g., auctions, hedging), this article summarizes research on the role of risk preferences in an real operational setting with life and death payoffs.