Email of the day
Comment of the Day

July 24 2012

Commentary by Eoin Treacy

Email of the day

on peak oil:
"Another contribution to the debate started by Maugeri's recent paper predicting an upsurge in oil production over the next decade - - there is no doubt about the recent surge in gas production in the US as witnessed by the price action of natural gas but it would seem that the equivalent case for oil is somewhat more nuanced - probably all one can safely predict is more price volatility until the debate is resolved."

Eoin Treacy's view Thank you for this well argued piece. We have long defined peak oil in terms of the rising cost of production. While tight oil and gas offer wonderful supply growth opportunities globally, the speed with which these wells hit peak production and subsequently decline means there is a constant need for new drilling. This tends to raise the cost of production.

However, given the potential for natural gas to become an important transport fuel over the coming decade, coupled with supply growth from unconventional sources of oil, this could put downward pressure on pricing over the medium term.

Back to top