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Dave O'Reilly, chief executive of Chevron, said the oil-rich countries that erected barriers to international oil companies amid the run-up in commodity prices were now seeking their expertise in managing the drastic fall. "They're back now looking for [our] investment,'' Mr O'Reilly told Chevron's annual analysts' meeting. The high prices had led countries such as Venezuela and Russia to raise barriers to the international oil companies, which have gone from control of 85 per cent of the world's oil reserves in 1970 to less than 10 per cent now. With prices on the rise, these countries did not feel they had to be as careful with their resources; some began managing their own oil and gas and failed to reinvest adequate profits to maintain production.

Although volatility in most assets is sharply lower than it was in November, oil price volatility has continued to climb. This rise in volatility, and resulting near $30-a-barrel oil price, is reflecting the same imbalances in the energy market that $147 oil did last summer: namely inadequate investment in basic infrastructure to produce, deliver, store and distribute energy. Last summer, attention focused on shortages in production capacity. However, present underlying shortages in storage and transportation are creating massive price distortions across the energy complex. Storage and transportation capacity provides the system with a buffer to supply-and-demand shocks by allowing it to run surpluses and deficits that smooth the normal cyclical swings in prices. As global storage capacity has failed to keep pace with growth in global demand over the past three decades, this buffer has shrunk relative to the size of the market, resulting in chronically higher than normal price volatility. Once infrastructure begins to constrain the ability of the market to run imbalances, prices have to create more of the adjustment process. Electricity markets are an extreme case of this. As power cannot be stored, supply must always equal demand, leaving price as the only mechanism to force the adjustment process. Accordingly, electricity is the most volatile of all assets. Due to inadequate infrastructure investment over the past several decades, oil is looking more like the electricity markets.

"Donald Sadoway: The missing link to renewable energy Tweet this talk! (we'll add the headline and the URL) Post to: Share on Twitter Email This Favorite Download inShare Share on StumbleUpon Share on Reddit Share on Facebook TED Conversations Got an idea, question, or debate inspired by this talk? Start a TED Conversation, or join one of these: Green Home Energy=Hydrogen Generators-alternative sources Started by Kathleen Gilligan-Smith 1 Comment What is the real missing link in renewable energy? Started by Enrico Petrucco 8 Comments Comment on this Talk 60 total comments Sign in to add comments or Join (It's free and fast!) Sort By: smily raichel 0 Reply Less than 5 minutes ago: Nice smily raichel 0 Reply Less than 5 minutes ago: Good David Mackey 0 Reply 3 hours ago: Superb invention, but I would suggest one more standard mantra that they should move on from and that is the idea of power being supplied by a centralised grid. This technology seems to me to be much more beneficial on a local scale, what if every home had its own battery, then home power generation becomes economically more viable for everyone. If you could show that a system like this could pay for itself in say 5 years then every home would want one. Plus for this to be implemented on a large scale requires massive investment that could be decades away. Share the technology and lets get it in homes by next year. Great ted talk. Jon Senior 0 Reply 1 hour ago: I agree 100%. Localised energy production would also make energy consumers more conscious of their consumption and encourage efforts to reduce it. We can invent and invent all we want, but the fast solution to allowing renewable energies to take centre stage is to reduce the base energy draw. With lower baseline consumption, smaller "always on" generators are required to keep the grid operational. Town and house-l

The commodity super-cycle is not over, it is just pausing. For the world economy to resume growth of 5 per cent, energy supply must expand by a similar rate. But with lower oil prices and a credit crunch, energy investment is plummeting, suggesting global energy demand will eventually pick up more rapidly than productive energy capacity. Assuming the ongoing global recession does not turn into a multi-year event that pushes energy demand down structurally, steep decline rates could again put upward pressure on oil prices as soon as 2010 or 2011. In particular, if the low oil price/high cost of money environment persists for most of this year and next, our base case scenario for non-OPEC production could prove optimistic, exacerbating the second leg of the commodity super-cycle. If and when the global economy starts to recover, too many dollars chasing too few barrels will only lead to much higher oil prices.

A new era for commodities Cheap resources underpinned economic growth for much of the 20th century. The 21st will be different. NOVEMBER 2011 * Richard Dobbs, Jeremy Oppenheim, and Fraser Thompson Source: McKinsey Global Institute, Sustainability & Resource Productivity Practice In This Article Exhibit: In little more than a decade, soaring commodity prices have erased a century of steady declines. About the authors Comments (2) Has the global economy entered an era of persistently high, volatile commodity prices? Our research shows that during the past eight years alone, they have undone the decline of the previous century, rising to levels not seen since the early 1900s (exhibit). In addition, volatility is now greater than at any time since the oil-shocked 1970s because commodity prices increasingly move in lockstep. Our analysis suggests that they will remain high and volatile for at least the next 20 years if current trends hold-barring a major macroeconomic shock-as global resource markets oscillate in response to surging global demand and inelastic supplies. Back to top Demand for energy, food, metals, and water should rise inexorably as three billion new middle-class consumers emerge in the next two decades.1 The global car fleet, for example, is expected almost to double, to 1.7 billion, by 2030. In India, we expect calorie intake per person to rise by 20 percent during that period, while per capita meat consumption in China could increase by 60 percent, to 80 kilograms (176 pounds) a year. Demand for urban infrastructure also will soar. China, for example, could annually add floor space totaling 2.5 times the entire residential and commercial square footage of the city of Chicago, while India could add floor space equal to another Chicago every year. Such dramatic growth in demand for commodities actually isn't unusual. Similar factors were at play throughout the 20th century as the planet's population tripled and demand for various resource

Intraday copper three-month prices on the LME rose by 4.1% to US$ 2,940 per tonne on December 29th compared to the closing price on December 24th, affected by higher oil prices and the weaker US dollar. Increases in oil prices are correlated with increases in copper prices since investors see oil as a barometer for the entire commodity class. Then, the weaker US dollar makes metals cheaper for holders of other currencies. However, analysts remain pessimistic about the red metal due to plunging demand as the ongoing economic slowdown will continue to take its toll on the demand for copper.

Even the environmentalists who addressed the final day of an OPEC seminar acknowledged oil was a fuel for the future, with oil, gas and coal expected to account for around 80 percent of the world's energy until 2030.

But the new technologies-which could help consumers cope with these prices-are unlikely to arrive in large numbers in time for the next oil spike. According to the authors of "The Impact of Plug-in Hybrids on U.S. Oil Use and Greenhouse Gas Emissions," a chapter in the new book Plug-in Electric Vehicles: What Role for Washington, published by the Brookings Institution, cars are durable goods that last well over a decade. "The transformation of the light-vehicle fleet to new internal combustion technologies or to hybrid and plug-in hybrid technologies will take decades from the time such vehicles are widely available at competitive prices," according to the authors, Alan Madian, Lisa Walsh and Kim Simpkins, researchers at consulting firm LECG. They believe it could take another decade from now until the new technologies compete on a price basis, and begin the process of replacing current fleets.

The three pipelines, the Anning-Kunming-Qujing line, the Anning-Chu xiong-Dali-Baoshan line and the Anning-Yuxi-Mengzi-Wenshan line, once complete, will pump oil products to northeastern, northwestern and southern parts of Yunnan province.

The falling oil prices may have varied effects on the investment strategies adopted by the petro-states and also on the various markets being analyzed in this study. The level of petrodollar investments is bound to increase. However, if the trend of falling oil prices continue, the quantum of investments made is also likely to fall. On the whole, dramatic growth is expected in the level of domestic investments in 2009. However, international investments are likely to continue growing in a few key sectors of the economy. The following are the various international sectors that can be expected to attract maximum petrodollar investments in 2009 * Real estate * Healthcare * Industrial The following are the various domestic sectors that can be expected to attract maximum petrodollar investments in 2009 * Banking and financial services * Aerospace and defense * Industrial * Education

US speciality brass mill Ansonia Copper and Brass Inc. has announced that it will lay off 85 of the 102 employees at its Liberty Street, Ansonia, factory in Connecticut. The plant manufactures copper alloy rod and wires. Company President Raymond McGee said "it's a very, very difficult situation". He blamed the redundancies, on top of 76 employees laid off in April 2007, on the company's struggle with escalating costs. Since 2002 electricity costs have soared 239%, natural gas 200%, fuel oil 125%, and copper and nickel 500% apiece. Ansonia's other facility in Waterbury, CT, which manufacturers copper alloy tube is unaffected by the announcement.

Further evidence of the impact of the North American economic slowdown on copper demand has recently been published by the ABMS and government statistical bodies. North American copper wirerod production plummeted 9.6% year-on-year to 174,000 tonnes in April. Output had been on a downward trend but the magnitude of the deterioration in April has still come as something of a surprise. A year-on-year increase of 2.0% in North American output January had been followed a 1.0% fall in February and a 2.7% drop in March. In April Canadian output was flat year-on-year due to improving export sales to the US, while US production fell 9.8% year-on-year and Mexican shipments slumped by 17.5%. On a year-to-date basis North American wirerod production was 2.9% lower in the four months to April 2008. Weakening demand from the automotive industry, coupled with a resurgance in copper prices and the return of Russian wirerod imports has clearly led to a deteriorating market situation for domestic mills.

Mueller Industries second quarter results highlight the tough times that the US brass mill industry is facing, but that companies can still operate profitably in a challenging market environment. The company's plumbing and refrigeration segment saw sales fall 11% to US$404m, while its operating profits dropped 32% to US$35m. The company blamed lower shipment volumes and lower spreads for the weaker performance. Sales at the company's OEM division, which includes its brass rod activities, rose 10% year-on-year to US$354m, while its operating profits rose 5% to US$19m. The improvement here is due to acquisition of Extruded Metals. Commenting on the results Harvey Karp, Chairman of Mueller Industries said "Mueller's earnings for the first half of 2008 were achieved despite the continuing decline in the housing industry, the sub-prime mortgage meltdown, the turbulence in the financial markets, rising metal costs, sky-high energy prices and a slowing national economy. Considering these adverse circumstances, we are pleased with the results."

I believe this assumption is basically incorrect. The current financial crisis is a direct result of peak oil. There may be oscillations in the economic situation, but generally, we can't expect things to get much better. In fact, there is a very distinct possibility that things may get very much worse in the next few years. In this post, I will put together some of the pieces I see. This post is based on a presentation, so includes more than the usual amount of graphics. The post repeats many things I have said before, but I wanted to bring more of the pieces together into more of an overview article. This is a link to a PDF version of the presentation. This is a link to the Powerpoint version.

Economic Growth, The Financial Crisis, and Peak Oil For several years, a swelling subculture of commentators (which includes the present author) has been forecasting a financial crash, basing this prognosis on the assessment that global oil production was about to peak. (2) Our reasoning went like this: Continual increases in population and consumption cannot continue forever on a finite planet. This is an axiomatic observation with which everyone familiar with the mathematics of compounded arithmetic growth must agree, even if they hedge their agreement with vague references to "substitutability" and "demographic transitions." (3) This axiomatic limit to growth means that the rapid expansion in both population and per-capita consumption of resources that has occurred over the past century or two must cease at some particular time. But when is this likely to occur? The unfairly maligned Limits to Growth studies, published first in 1972 with periodic updates since, have attempted to answer the question with analysis of resource availability and depletion, and multiple scenarios for future population growth and consumption rates. The most pessimistic scenario in 1972 suggested an end of world economic growth around 2015. (4)

Investors piled out of Russian stocks Friday after the abrupt departure from the country of a foreign oil boss and the prime minister's unexpected severe criticism of a large steel firm. MICEX, the exchange where the bulk of trading in Russian stocks takes place, plunged by 4.8 percent as of 12:20 p.m. Russian time, while the RTS, a top stock index, lost 4.4 percent to drop beneath the critical 2000-point barrier for the first time since March. After Prime Minister Vladimir Putin's scathing attack on Mechel late Thursday, heavy trading in New York sent the steel and coal maker's stock down by nearly 40 percent, losses mirrored Friday morning in Russian trading. The premier criticized the company, which is the largest supplier of coal for steelmakers in Russia, for charging much higher prices for raw materials domestically than it does for its exports, and called for an antitrust investigation into its activities.

Copper prices tumbled to a five-week low Thursday on expectations that falling demand from China and a slowdown in the U.S. housing market will lead to a surplus of the metal. Other commodities traded mixed, with crude oil rebounding slightly and gold, silver and soybeans falling. Corn and wheat futures rose. China, the world's biggest buyer of copper, has been importing less of the metal since the completion of most major construction projects heading into the Beijing summer Olympics. Copper imports in June fell 20 percent compared to May, China's custom's agency said this month. As a result, stockpiles of the metal have swelled in Shanghai and London, helping drive down prices.

The search is on for domestic reserves of key resources, such as iron ore and crude oil, to reduce dependence on imports, according to a government plan

China vowed on Monday to downsize some of its outmoded oil refining, steel and metal production plants, as oversupply raised challenges while demand for fuel and industrial products weakened due to its slowing economy.