Hofmeister vs Simmons

Shell CEO Hofmeister on Peak Oil & Simmons


Matt Simmons Responds -

Future oil much harder to extract

THE world's extra oil supply is likely to come from expensive and environmentally damaging unconventional sources within 15 years, according to a detailed study.

This will mean increasing reliance on hard-to-develop sources of energy such as the Canadian oil sands and Venezuela's Orinoco tar belt.

A report from Edinburgh-based consultancy Wood Mackenzie calculates that the world holds 3600 billion barrels of "unconventional" oil and gas that need a lot of energy to extract.

Curtailing of oil sands conversion hurts price

In a recent column, I warned that crude oil prices in the mid-$50s per barrel or below would lead to a curtailment of the Canadian oil sands conversion. This 5-year-old alternative energy boom has been making Canada the primary supplier of crude to the United States, reaching a current level of 2 million barrels a day. But with skyrocketing conversion costs getting to the break-even point faster than expected, this expansion may now be delayed.