The Rude Awakening about The Next Trillion Barrels

The Next Trillion Barrels

The Rude Awakening
Dubai, UAE
Thursday, October 18, 2007

• Grab your lab coats...welcome to the next generation of the oil biz,
• Record highs for black goo spur innovation,
• Carbon sequestration, 4D seismic imaging and other breakthroughs
  ahead...

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Joel Bowman, reporting from the Arabian Peninsula...

Yesterday crude closed at US$87.57. That leaves us about three-dollars off the $90.46-per-barrel inflation-adjusted peak of 1980. Again, political instability in the Middle East is a major driver for higher prices.

When we broke through the US$90 mark, some quarter of a century ago, the Iranian revolution was about a year old and the Iran-Iraq war was just getting underway.

Today, we have an increasingly volatile situation between Turkey and the Kurdish rebels inside northern Iraq contributing to skyrocketing prices. That's on top of the ongoing situation in the rest of Iraq.

Throw in the depleting supply of the world's finite reserves, a few other testy arenas where the gooey stuff is inconveniently located (Venezuela, Nigeria, Russia) and our unwavering insatiability for carbon-based energy consumption and it's not hard to imagine oil topping one-hundred bucks.

Then we also have the diminishing value of the greenback, which oil is almost universally priced in, to contend with.

With the added price incentive for procuring the world's favorite liquid, those jostling for poll position in the extraction business are leaping over each other to get at the prize.

As resident oil and energy expert, Byron King, explains below, the methodologies of the future are sure to excite and intrigue. So, grab your lab coats and your hard hats as we take a look at the great global grab for the next trillion barrels. Enjoy...