Oil shortage a myth, says industry insider

There is more than twice as much oil in the ground as major producers say, according to a former industry adviser who claims there is widespread misunderstanding of the way proven reserves are calculated.

Although it is widely assumed that the world has reached a point where oil production has peaked and proven reserves have sunk to roughly half of original amounts, this idea is based on flawed thinking, said Richard Pike, a former oil industry man who is now chief executive of the Royal Society of Chemistry.

Current estimates suggest there are 1,200 billion barrels of proven global reserves, but the industry's internal figures suggest this amounts to less than half of what actually exists.

The misconception has helped boost oil prices to an all-time high, sending jitters through the market and prompting calls for oil-producing nations to increase supply to push down costs.

Flying into Japan for a summit two days after prices reached a record $139 a barrel, energy ministers from the G8 countries yesterday discussed an action plan to ease the crisis.

Explaining why the published estimates of proven global reserves are less than half the true amount, Dr Pike said there was anecdotal evidence that big oil producers were glad to go along with under-reporting of proven reserves to help maintain oil's high price. "Part of the oil industry is perfectly familiar with the way oil reserves are underestimated, but the decision makers in both the companies and the countries are not exposed to the reasons why proven oil reserves are bigger than they are said to be," he said. Read more..
http://www.independent.co.uk/environment/climate-change/oil-shortage-a-myth-says-industry-insider-842778.html

Every $10 oil rise ups US Air Force costs $610 mln

WASHINGTON, May 22 (Reuters) - The U.S. Air Force operates the "world's largest airline" and every $10-per-barrel increase in crude oil boosts its annual operating costs by $610 million, Air Force Secretary Michael Wynne said on Thursday.

The Air Force's bill for aviation fuel was about $6 billion in fiscal 2007, Wynne told a defense industry group. He declined to predict what the total would be for 2008. Read more..
http://uk.reuters.com/article/oilRpt/idUKN2252728920080522

Shell CEO says record oil not due to shortage

LONDON (Reuters) - Oil prices at a record high above $135 a barrel are rising due to market sentiment rather than a shortage of supply, Royal Dutch Shell's chief executive said on Thursday.

U.S. crude oil hit an all-time peak on Thursday, climbing to $135.09, lifted by concern about long-term supply and a host of predictions of further rises from influential investment banks and investors.

"What we say and what we see is there are no physical shortages," Shell's Jeroen van der Veer told Reuters television. He runs the world's second-largest fully publicly traded oil firm by market value.

"There are no tankers waiting in the Middle East, there are no cars waiting at gasoline stations because they are out of stock. This has to do with psychology in the markets and you cannot forecast psychology".

His view that there are no shortages chimes with that of other oil producers, such as members of the Organization of the Petroleum Exporting Countries. Others, such as the U.S. government, say supply is tight. Read more..
http://uk.reuters.com/article/oilRpt/idUKL2232289720080522

Venezuela warns U.S. over applying terrorism label

Venezuela warned the United States on Thursday against listing the OPEC nation as a state sponsor of terrorism, citing a potential for lost exports and jobs and noting the importance of Venezuelan oil exports.

The United States has said it is investigating Colombian allegations that leftist Venezuelan President Hugo Chavez offered the Revolutionary Armed Forces of Colombia, or FARC, guerrillas in Colombia $300 million.

In March a senior U.S. official said new information about possible links between Venezuela and FARC were disturbing but Washington was far from a decision to declare Caracas a state sponsor of terrorism. Washington classifies FARC as a terrorist group.

"There have been recent indications that the Bush administration and its congressional allies want to designate Venezuela a state sponsor of terrorism," Bernardo Alvarez, Venezuela's Ambassador to the United States said in a speech to lawyers and investors in New York.

"There will be very grave economic consequences if a politically driven measure like this is taken. Just think about the $10.2 billion lost U.S. exports to Venezuela, 230,000 manufacturing jobs tied to exports and 1.58 million barrels of oil a day from Venezuela," he said.

Five countries are now on Washington's terrorism blacklist: Cuba, Iran, North Korea, Sudan and Syria.

Alvarez also noted the terrorism designation, which could lead to sanctions on Venezuela, would increase commercial costs and place a number of restrictions on U.S. businesses looking to invest in Venezuela.

"Any action like this would have economic and political consequences, not only for the U.S.-Venezuela relationship as a whole, but also within the region. This would be seen as an effort to breed instability in the region," he said.

Oil Crisis As Barrels Go Missing, According to Audit

How do you not notice when 308,000 barrels of oil go missing?

That's the question government auditors were asking after they looked into the Department of Energy's management of oil received for the Strategic Petroleum Reserve, a critical program to assure energy stability in the U.S. in case of an oil crisis.

To help add to the reserve, DOE receives a portion of the royalty oil that the Department of the Interior gets in return for allowing petroleum companies to drill on government lands and waters. Read more..
http://blogs.abcnews.com/theblotter/2008/01/oil-crisis-as-b.html

Bush urges OPEC to pump more oil

RIYADH, Saudi Arabia - President Bush warned Tuesday that surging oil prices threaten the U.S. economy and urged OPEC nations to boost their output. His plea drew little sympathy from oil-rich Saudi Arabia, which said production levels appear normal.
Read more...
http://news.yahoo.com/s/ap/20080115/ap_on_re_mi_ea/bush_mideast

Iraqis see hope drain away

Jobs gone and schools closed. Marriages delayed and children mourned. Markets bombed and clean water in short supply. Speaking freely now a dangerous act.

And hope lost.

Four years after the U.S.-led invasion of Iraq, Iraqis describe daily lives that have been torn apart by spiraling violence and a faltering economy. The bursts of optimism reported in a 2004 public-opinion survey taken a year after the invasion and another in 2005 before landmark legislative elections have nearly vanished.

Face-to-face interviews with 2,212 Iraqis — a survey sponsored jointly by USA TODAY, ABC News, the British Broadcasting Corp. and ARD, a German TV network — find a nation that in large measure has fragmented into fear. Six in 10 Iraqis say their lives are going badly. Only one-third expect things to improve in the next year.

http://www.usatoday.com/news/world/iraq/2007-03-18-poll-cover_N.htm

Senate drills Bush official over oil prices

NEW YORK (CNNMoney.com) -- A Senate panel grilled a key government energy expert Tuesday over why the Bush administration plans to continue adding to the nation's oil reserve as the price of crude spikes near $100 a barrel.

Lawmakers also accused the administration of turning a blind eye to the role that oil speculators are playing in driving up prices.

The Department of Energy is planning to spend nearly $1 billion in 2008 to boost the amount of oil the nation holds in its 750 million barrel Strategic Petroleum Reserve.

http://money.cnn.com/2007/12/11/news/economy/oil_speculation/index.htm?postversion=2007121117