This is a concept I have touched on before from the demand side. Here are a couple of nuggets about the supply side from Felix Zulauf and Scott Black in Barron's.
Zulauf: There are about two trillion to 2.5 trillion barrels of oil in the world. We have lifted a little over one trillion, the first half-trillion between 1859 and 1982 and the second half trillion since. The theory behind Hubbard's peak is that once you have lifted half of the oil out of the field, you cannot increase production. We are running up against those technical difficulties, and oil's long-term trend is up. This year, due to the slowdown I expect in the U.S. and maybe in China, oil will stay between $50 and $70, plus or minus $5. Eventually, it will go a lot higher.
Black: At the end of 2005, the world produced about 84 million barrels a day. By 2010, production is projected to rise to 94.4 million barrels a day. At the end of '05 China represented 8% of world oil demand, or 6.7 million barrels a day. Over the next five years, that will climb to 10.7 million barrels a day. India is at roughly 2.5 million barrels, going to 3.5 million.
Might I suggest looking at uranium, coal and oil sands.
Wikinvest Wire
10 comments:
First of all, it is Hubbert's Peak, not Hubbard's Peak. It was named after Dr. M. King Hubbert. He discussed it in his paper titled "Nuclear Energy and the Fossil Fuels". He presented it in 1956 and it makes an interesting read. However, it doesn't make for sound bites.
Check out CCJ...
To Waker,
If it wasn't clear I pasted this from Barron's. You should take it up wuth them. I will take your word about Hubbert versus Hubbard.
You are not alone.
http://www.financialsense.com/editorials/gue/2006/0113.html
BHP Billiton fits nicely into your natural resources, uranium, and Australian themes.
The Financial Sense article was great. According to it, CCJ has 60% of the worlds Uranium reserves. Hello?
Not only BHP but Rio Tinto has exposure to uranium. For disclosure, I own EWA which has both names.
I am unsure has how much oil is left in the ground, it is most likely more than we think, long before that date the world will have to switch to alternate energy sources. Uranium will never be important source of energy, because of safety concerns. Alternate sources of energy could be a good investment, but only in the very long term. In the meantime we will have to live with volatility in the world of oil
To Bernie,
I am in no posiion to knowledgably disagree with any geologist. You are probably right about needing to live with volatile oil as the primary source.
I have to respectfully disagree about the future utility of other energy sources.
If the French can get 80% of their electricity from Uranium, it can't be too hard. When its time to put up money, I'll take Nuclear Energy.
OG
The EU appears committed to nuclear energy for now but it appears the region is also increasingly committed to pursuing renewable resources. One of the more interesting plays (cf. Jim Jubak) in that area is Conergy AG (http://www.conergy.com/). The company is expanding globally at a respectable pace (Australia, Mexico, USA); photovoltaic and solar-thermal technologies have come a long way in the last ten years w/ greater potential for improved efficiency and benefit per unit cost than wind or hydro IMHO although the jury may still be out on fuel cells.
That said, I think natural gas, coal and tar sand plays will do well at current prices. Barring geopolitical catastrophe such as an Iran blowup I don't believe current elevated oil prices are sustainable in the intermediate term but I also see no evidence that the price of energy is going to decline much either. Hubbert's peak may be somewhat indeterminate in time but we punked out on nuclear in the US and failed to compensate by pursuing alternative resources with sufficient vigor; TANSTAAFL.
RW
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