More good news in the oil and gas industry this week, Faroe Petroleum have made the exciting announcement that they have found oil off Norway. Despire this find, shares in Faroe Petroleum have dropped. This is because it has been suggested that the oil find was less than what the company had hoped for.
The company announced that a drilling activity near the Pil discovery in the Norwegian Sea had struck oil. Faroe Petroleum had hoped that it would find between thirteen and thirty one million barrels of oil.
If the company have found that amount of oil, Faroe is set to gain between three and eight million barrels. This is because Faroe has a twenty five per cent stake. At the beginning of the year, Faroe had close to thirty one million barrels and this new find could be a remarkable addition to its portfolio.
Faroe Petroleum are sure to be celebrating after this find, as they have not been too lucky recently. Two other drilling activities off Norway that Faroe Petroleum conducted unfortunately turned out to be dry.
However, despite this positive announcement, the company’s shares fell. As mentioned it has been suggested that the drop in shares has been put down to the amount of oil found.
Faroe also had a bit of a nightmare with the southern part of the Boomerang well. The company stated that they were unfortunate not to find any gas or oil. But, in April, the company made a find in the Skime East well. This find was less than what they were hoping for, but they did say that the find was showing signs of future success.
Incidents like these show just how risky and challenging drilling work in the oil and gas industry can be. Unfortunately, this isn’t the only thing that oil and gas companies need to worry about. The declining price of oil has been a huge problem for many oil and gas organisations.
The Chief Executive of Faroe Petroleum said: “We are pleased to announce the results from the Boomerang well, which adds further resources to the Pil area from a new reservoir. This appraisal and exploration well has provided a significant amount of important data and again proven how prospective the Pil area is.”
The company is due to start drilling in the Blink well soon. Again, the company have suggested there is huge potential in this well and are excited to see the results
I am sometimes asked if the economy would collapse were we to bring our economy into balance with our natural resources. My answer is no, it will be a more robust system.
An economy that is in sync with the earth’s ecosystem-an eco-economy-will contrast profoundly with the polluting, disruptive, and ultimately self-destructing economy of today-the fossil-fuel-based, automobile-centered, throwaway economy.
First, we will have a stable population rather than an increasingly expanding one putting ever more pressure on the earth to supply its needs. Among the key economic sectors-energy, materials, and food-the most profound changes will be in energy and materials. It is difficult to imagine a more fundamental sectoral restructuring than that in the energy sector as it shifts from oil, coal, and natural gas to wind, solar cells, and geothermal energy. With materials, the change is not so much in the materials used as in the structure of the sector itself as it shifts from the linear economic model, where materials go from the mine or forest to the landfill, to the reuse/recycle model. In this closed loop system, which emulates nature, recycling industries will largely replace extraction industries. The materials loop will be closed, yielding no waste and nothing for the landfills. In the food sector, the challenge is to better manage natural capital: stabilizing aquifers by increasing water productivity, conserving topsoil by altering agricultural practices, and raising land productivity to avoid clearing more forests for food production.
Harvests from oceanic fisheries, a major source of animal protein in the human diet, will be reduced to the sustainable yield. Additional demand will be satisfied by fish farming. This is, in effect, an aquatic version of the same shift that occurred during the transition from hunting and gathering to farming.
Instead of being run on fossil fuels, the eco-economy will be powered by sources of energy that derive from the Sun, such as wind and sunlight, and by geothermal energy from within the earth. Cars and buses will run on electricity derived from wind and possibly fuel cells powered by hydrogen. Atmospheric CO2 levels will be stable. In contrast to today’s energy economy, where the world’s reserves of oil and coal are concentrated in a handful of countries, energy sources will be as widely distributed as sunlight and wind. The heavy dependence of the entire world on one geographic region-the Middle East-for much of its energy will decline as the new climate-benign energy sources take over.
The transport systems of cities will change. Instead of the noisy, congested, polluting, auto-centered transport systems of today, cities will have rail-centered transport systems and they will be bicycle- and pedestrian-friendly, offering more mobility, more exercise, cleaner air, and less frustration. Urban personal mobility will increase as automobile use and traffic congestion decline.
New Industries, New Jobs
Building an eco-economy represents one of the greatest investment opportunities of all time. Restructuring the global economy will create not only new industries, but also new jobs-indeed, whole new professions and new specialties within professions. For example, as wind becomes an increasingly prominent energy source, there will be a need for wind meteorologists to analyze potential wind sites, monitor wind speeds, and select the best sites for wind farms. The better the data on wind resources, the more efficient the industry will become. Closely related to this new profession will be engineers to design and supply wind turbines.
Among the signposts of an environmentally sustainable economy are buildings that are in harmony with the environment. Environmental architects will be needed to design buildings that are energy- and materials-efficient and that maximize natural heating, cooling, and lighting.
In a future of water scarcity, watershed hydrologists will be at the center of watershed management regimes. It will be their responsibility to understand the hydrological cycle, including the movement of underground water, and to know the depth of aquifers and determine their sustainable yield. As the world shifts from a throwaway economy, engineers will be needed to design products that can be recycled-from cars to computers. Once products are designed to be disassembled quickly and easily into component parts and materials, comprehensive recycling is relatively easy. It will be the responsibility of the recycling engineers to close the materials loop, converting the linear flow-through economy into a comprehensive recycling economy.
In countries with a wealth of geothermal energy, it will be up to geothermal geologists to locate the best sites either for power plants or for tapping directly to heat buildings. Retraining petroleum geologists to master geothermal technologies is one way of satisfying the likely surge in demand for geothermal geologists.
If the world is to stabilize population sooner rather than later, it will need far more family planning midwives in Third World communities. This growth sector will be concentrated largely in developing countries, where millions of women lack access to family planning.
Another pressing need, particularly in developing countries, is for a new breed of sanitary engineers to design sewage systems not dependent on water, a trend that is already under way in some water-scarce countries. Using water to wash waste away is a reckless use of a scarce resource. Washing waste away is even less acceptable today as marine ecosystems are overwhelmed by nutrient flows. Apart from the ecological disruption of a water-based disposal method, there are also much higher priorities in the use of water, such as drinking, bathing, and irrigation.
Yet another new specialty that is likely to expand rapidly in agriculture as productive farmland becomes scarce is agronomists who specialize in multiple cropping and intercropping. This requires an expertise both in the selection of crops that can fit together well in a tight rotation in various locales and in agricultural practices that facilitate multiple cropping.
No sector of the global economy will be untouched by the Environmental Revolution. In this new economy, some companies will be winners and some will be losers. Those who anticipate the emerging eco-economy and plan for it will be the winners. Those who cling to the past risk becoming part of it.
Lester Brown is President of the Earth Policy Institute. This article adapted from his book Eco-Economy:Building an Economy for the Earth,”The Shape of an Eco-Economy.” See www.earth-policy.org
Berkeley, Aug. 15 , 2005 – Jan Lundberg, veteran petroleum analyst who joined the environmental movement and fought industry expansion, has a different explanation for record gasoline prices than the one provided by his former firm, Lundberg Survey, which on Aug. 14 attributed them only to high crude oil prices.
“The peak of world oil extraction is approximately now, although reserves data from the oil industry and OPEC are notoriously unreliable. Shortage of crude oil has started to make itself felt, as strained production levels of the most useful crudes reflect tight supply. It is true that oil demand has managed to reach record levels (82.2 million barrels a day; source: IEA), but oil fields inevitably peter out,” he told Fox News Radio.
Nearly 20 oil-exporting countries are past their peak in production. Also, Saudi Arabia is showing signs of leveling off. Another sign of dwindling geological resources is when industry does not invest in drilling new wells-despite record profits for oil-and rather buys up oil reserves via corporate mergers. “Refining capacity is almost maxed out, but industry sees little point in building more refineries when crude supply is in doubt,” Lundberg added. World discoveries peaked by 1965, and the trend in declining discovery is unalterable. U.S. production peaked in 1970.
Lundberg stated, “Growth of the economy ends when petroleum is in short supply. When the market really feels the gap between supply and demand widen, the price will go through the roof. Alternative energy sources are not ready. The coming oil shock will signal an historic flip-over from expanding our civilization via petroleum dependence to seeing the commencement -after “petrocollapse”-of a reversion to sustainable living based on local ecological capacity. The short answer to ‘What do we do now?’ is conserve, radically.”
Lundberg also told Fox News that it is erroneous to calculate that the adjusted price for gasoline, including inflation, is under the price of two and a half decades ago. This is because “subsidies-direct, indirect and hidden, such as the War on Iraq-to oil and refined products, if included in the price, would make oil cost perhaps $120 per barrel today. This is one reason people must work longer hours and obtain extra jobs,” he explained.