I think it's the difference between the short term and long term. I agree that it is confusing. I left out a lot from the posting but in the posting the second to last para says.
The combination of new production in the Western Hemisphere and the still growing production in other parts of the world could lead to a sharp drop in oil prices, Maugeri finds, which if steep enough could lead oil companies to cut back on investment and ultimately slow down oil supplies. But if oil prices remain above about $70 per barrel, sufficient investment will occur to sustain continued growth in production, possibly leading to a stable phenomenon of oil overproduction after 2015. So there might be a sharp drop which if it goes below 70 could lead to cutbacks in production. The interesting part of the article is that the author says we are NOT at peak oil at this time. From: [email protected] [mailto:[email protected]] On Behalf Of Tom Walker Sent: Tuesday, June 26, 2012 1:03 PM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION Subject: Re: [Futurework] A Fresh Look at Oil's Long Goodbye - NYTimes.com To make a long story short: a big increase in unconventional oil production, fueled by high prices may lead to a sharp drop in oil prices. In other words, the production projections are based on price projections that ignore the feedback effect on prices of the production projections. On Tue, Jun 26, 2012 at 9:53 AM, Arthur Cordell <[email protected]> wrote: http://dotearth.blogs.nytimes.com/2012/06/25/a-fresh-look-at-oils-new-boom-t ime/?nl=opinion <http://dotearth.blogs.nytimes.com/2012/06/25/a-fresh-look-at-oils-new-boom- time/?nl=opinion&emc=edit_ty_20120626> &emc=edit_ty_20120626 A Fresh Look at Oil's Long Goodbye By ANDREW C. REVKIN <http://dotearth.blogs.nytimes.com/author/andrew-c-revkin/> My bedtime reading tonight is "Oil: The Next Revolution <http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pd f> - The unprecedented upsurge of oil production capacity and what it means for the world." This mind-bending report points to a prolonged period of rising oil production, particularly in the United States (for reasons laid out below), and a potential collapse in oil prices, with all kinds of implications for security, international politics, the economy and, without doubt, climate. The report is written by Leonardo Maugeri <http://belfercenter.ksg.harvard.edu/experts/2510/leonardo_maugeri.html> , a top oil company executive from Italy who is currently a research fellow at the Geopolitics of Energy Project <http://belfercenter.ksg.harvard.edu/project/68/geopolitics_of_energy_projec t.html> of Harvard's Belfer Center for Science and International Affairs For convenience, here's an excerpt from the Harvard news release on Maugeri's report: ========== Oil production capacity is surging in the United States and several other countries at such a fast pace that global oil output capacity is likely to grow by nearly 20 percent by 2020, which could prompt a plunge or even a collapse in oil prices, according to a new study by a researcher at the Harvard Kennedy School. The findings by Leonardo Maugeri, a former oil industry executive who is now a fellow in the Geopolitics of Energy Project in the Kennedy School's Belfer Center for Science and International Affairs, are based on an original field-by-field analysis of the world's major oil formations and exploration projects. Contrary to some predictions that world oil production has peaked or will soon do so, Maugeri projects that output should grow from the current 93 million barrels per day to 110 million barrels per day by 2020, the biggest jump in any decade since the 1980s. What's more, this increase represents less than 40 percent of the new oil production under development globally: more than 60 percent of the new production will likely reach the market after 2020. Maugeri's analysis finds that the gross additional production from current exploration and development projects in the world could produce an additional 49 million barrels per day by 2020, an increase equivalent to more than half the world's current 93 million bpd. After adjusting that gross output increase for political and technical risk factors as well as the offsetting depletion rates of current fields, the analysis projects the net increase by 2020 to be about 17.5 bpd. His study attributes the expected growth in oil output largely to a combination of high oil prices and new technologies such as hydraulic fracturing that are opening up vast new areas and allowing extraction of "unconventional" oil such as tight oil, oil shale, tar sands and ultra-heavy oil. These increases are projected to be greatest in the United States, Canada, Venezuela and Brazil. Maugeri also predicts a major increase in Iraq's oil output as it regains stability, which will add new production in the Persian Gulf region - potentially destabilizing OPEC's ability to manage output and prices. The combination of new production in the Western Hemisphere and the still growing production in other parts of the world could lead to a sharp drop in oil prices, Maugeri finds, which if steep enough could lead oil companies to cut back on investment and ultimately slow down oil supplies. But if oil prices remain above about $70 per barrel, sufficient investment will occur to sustain continued growth in production, possibly leading to a stable phenomenon of oil overproduction after 2015. "Leonardo's conclusions are not only startling, but his paper provides a transparent explanation for how he reaches them - something lacking in many studies," said Meghan L. O'Sullivan, the Jeane Kirkpatrick Professor of the Practice of International Affairs at the Kennedy School and director of the Geopolitics of Energy Project. "His findings have major implications for geopolitics, suggesting important shifts in how countries interact and wield influence." _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework -- Cheers, Tom Walker (Sandwichman)
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