The Rising Influence of Rising Affluence

[old man]

Dew-- The oil forecasts I've seen have demand around 125 to 130 mmbopd and supply around 95mmbopd by year 2030. Even if those numbers are off some, the demand number appears reasonable given economic growth rates in China/India, USA and to lesser extent other countries. While its reasonable to expect the US won't be nearly so dependent on oil to fuel its transportation needs 20 years from now, it's difficult to see a significant reduction in need for oil during the next decade simply because of the 15 years or so to replace the existing inventory of cars, trucks, busses,locomotives, planes even if we stated today which we can't. Alternative fuels such as NG, diesel from coal, electric cars, etc., are still years away from making significant inroads and probably even longer than that in Asia. With Prudhoe Bay, Mexico's Cantatrell (sp), and North Sea in serious decline and questions re S Arabia's Ghawar's reserves it seems clear that major new discoveries will come largely from deep sea and Arctic exploration where production costs will be high.
Assuming demand forces exert continuing pressure on supply, oil prices will rise. Oil services, exploration platforms, floating storage platforms and tankers are needed obviously for deep sea exploration, production, storage and transport.

I suspect that the US will increase its imports derived from Canadian tar sands. Columbia also has some fairly large reserves of bitumen but production costs currently are still high. Petrobank is experimenting with its THAI process which potentially will reduce extraction costs while increasing the amount recoverable. Nevertheless, most experts think we will be very dependent on deep sea and Arctic exploration for new supply. I can't personally see why cos that provide the needed expertise and products won't continue to enjoy the business and profits they've historically had. I suspect also that their stock prices did well during last year's oil price rise. I know day rates went way up and stayed up until recently.
John