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PeakOil is You

The 40-year cycle of the oil industry

General discussions of the systemic, societal and civilisational effects of depletion.

The 40-year cycle of the oil industry

Unread postby Graeme » Thu 05 Jun 2014, 19:44:22

The 40-year cycle of the oil industry, and where we’re at now

Just hang on: We don’t have much more than nine years to go in the current period of history that is turning the oil world upside down.

Peter Tertzakian, a managing director and chief energy economist of Calgary’s ARC Financial, sees economic upheaval as going through four distinct cycles. There’s a relatively stable period that he calls “growth and dependence.” But various changes occur that result in a “pressure build” that has to give at some point. That’s what he calls the “break point.” The fourth cycle is known as “rebalancing” or “transition” and it is often injected with “magic bullets” that provide a new equilibrium … or in other words, new growth and dependence.

Tertzakian spoke at a lunch presentation at this year’s Benposium meeting in Houston, sponsored by Bentek Energy, a division of Platts. He romped through a 100-year history of lighting, as the world went from candles to gas lighting to kerosene to the electric filament bulb and onto today’s developments in LEDs. As he reviewed each shift, he dryly and repeatedly noted that the proprietors of the entrenched and challenged technology “were concerned.”

So the man who wrote back-to-back books about rapid oil demand growth that the Peak Oil movement loved and another about how oil consumption was waning, laid out how the current cycle is playing out.


But whatever the inning, Tertzakian gave it an end date of 2023. Why? Because that would mark a 15-year run since the break point of 2008. But he hedged a bit and said the end date may not come until 2025.

He said one other thing has happened: the US and Canada have effectively become one energy nation. Producers in those countries have embraced new technology, and for the upstream sector now, it’s all just North America now, north of the Rio Grande.

And with oil companies facing the reality of sanctions (Russia, Iran), the expropriation of assets (Venezuela) and corruption (pick your country), “it’s an integrated oil and gas region that will be progressively more attractive for investment relative to the rest of the world,” he said.


platts
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
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Graeme
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