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Page added on June 22, 2015

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Peak Oil in Latin America

Peak Oil in Latin America thumbnail

Today, I want to focus on black gold production south of the Rio Grande. Latin America’s political leaders believe (or claim to believe) that the economic future of the region is promising.

They avail themselves of every summit, every conference or bilateral gathering to express their full confidence in growth, progress and development (today called “sustainable,” even when the Amazons continue to suffer). The Cuban president and his minister for the economy, for instance, insisted that this year we would grow like doped-up champions, by no less than 4 %.

I think this is magnificent, charming. The one, tiny problem is that, in order to grow like that, exponentially, one has to burn oil at the same pace. So, what legs do we have to stand on?

See country graphs below.

Does Latin America have the fuel needed to reach such an ambitious goal? Might this not be another “white lie”, of the kind used by leaders to prevent riots and keep investors in orbit?

Graph 2 was prepared by Mazama Science on the basis of data supplied by British Petroleum.

Black gold production in the region has been stagnant for about a decade. Large discoveries are conspicuously absent and mature wells have been spitting out nothing by mud. The definitive fall will begin soon, if it hasn’t already.

The heavyweights (Brazil, Venezuela and Mexico) have already reached the peak. Ecuador and Colombia are roughing it, but won’t be able to for much longer. Over the past decade, this group of countries have made important investments, but at the cost of selling all future production to the big oil-eaters: China, India and the US.

3

At this point, many of you are probably chewing on a rather dirty word: fracking. This black prince that “saved” the US economy, could it not bring economies further south to their feet?

As a business, fracking has failed in most countries where it was used, and not precisely because of harassment by ecologists. The United States was able to take on the immense and risky initial investment, but less “fortunate” countries, even those that have juicy and technically adequate reserves, haven’t had the same success.

4

In Latin America, Argentina and Mexico, people opened their hearts to fracking (it is said fracking is carried out under the table in Venezuela), but the results to date have been unimpressive.

Not even the International Energy Agency (which highly praised the virtues of hydraulic fracturing methods) sees much future in it. Its most recent report (WEO 2014) makes this evident.

 

The last official statistical information was made available in 2012.  I wonder what the change has been  since.

CUBA

Energy consumption goes down year after year in Cuba. Do we have enough to grow by 4%? In the middle of the year, the National Assembly will gather and give us a report. I’m dying to see what they’ll try and sell us this time.

The resources we destine to dress up for a party that won’t take place will be literally flushed down the toilet. But, so what? The bill will always be paid by the ever-docile, forgetful and credulous idiot of old, and the environment, which doesn’t put up a fight.

 

 

 

 

 

 

HAVANA TIMES



5 Comments on "Peak Oil in Latin America"

  1. Makati1 on Mon, 22nd Jun 2015 10:29 pm 

    Fraking…the devil in disguise.

  2. dolanbaker on Tue, 23rd Jun 2015 2:22 am 

    If those trends continue, the whole region will be a nett importer in a couple of years.

  3. BobInget on Tue, 23rd Jun 2015 12:03 pm 

    Venezuela, Ecuador and Argentina could supply the entire continent.. if permitted.
    From here on out, what ever not used domestically goes to Asia… NOT the US.

    Venezuela has the biggest stash of oil in the
    ‘Orinoco Belt’ 265 Billon barrels. Big problem. For Venezuela’s oil-sands to become viable, Ven will need more then the 15 billion just fronted by Russia.

    Argentina’s shale is getting attention from most multi-nationals . Shell, Exxon all the usual suspects.

    Mexico was left off for Geographical reasons.
    I suspect Mexico is already a net oil importer.
    It’s uncertain if recent discoveries will pan.

    Ecuador’s diesel and gasoline prices are only moderately subsidized. Not like Venezuela’s
    .02 cents a liter.

    Brazil’s promised bonanza of ultra deep water drilling turned disappointing.
    I fully expect technology to overcome..
    Don’t hold collective breaths.

    US State Department in ‘patch-up’ talks with Venezuela. It’s a bit late, I fear, for talking. Unless the US invades Venezuela on some pretext, (and even then, like Iraq) we ain’t gettin much oil there anymore.

  4. Kohl Haas on Tue, 23rd Jun 2015 12:07 pm 

    Hydraulic fracturing has been around a long time and could help these countries alleviate a lot of their problems if the economies were not so mis-managed and corrupt. What are these allegations about fracturing? Black Prince? Devil in Disguise? Why? Because it works? What is this need to bad-mouth things that succeed? Where is the objective cost/benefit analysis?

  5. BobInget on Tue, 23rd Jun 2015 12:16 pm 

    One of my trading buddies came up with this:

    http://www.investorvillage.com/groups.asp?mb=16343&mn=26876&pt=msg&mid=15047199

    I happen to agree with a caveat. Were it not for Iran, Russia vs USA, KSA around a Syrian civil war, oil would not have peaked this 2015.

    Because these oil wars have decades remaining, what remains of precious will be squandered on population control.

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