Oil and Geo-Politics, Oil and Availability

Oil and Geo-Politics: “Iran threatens oil transport route (‘sub‘: Shutdown of Straight of Hormuz would risk military escalation)” post from Joseph Farah’s G2 Bulletin via World Net Daily (wnd.com) this 9/28/09, should give the U.S. and its’ families deep concern. Here’s (some of the) why:

• “With the prospect of Israel bombing Iran’s nuclear facilities looming (just listen to Benjamin Netanyahu’s impassioned speech before the UN last Friday/PH), Tehran has renewed its threat to shut down the strategic Straight of Hormuz, through which up to 40 percent of the world’s oil passes …”
• “While the threat from Iranian authorities isn’t new, the fact that it could be blocked, even temporarily, comes at a bad time for the world economy in which a spike in energy prices, even for a short time, could have a detrimental impact.”

Oil and Availability: From The Oil Drum, at theoildrum.com, on 9/28/09 we have an “Interview with Sadad al Husseini (a geologist, reservoir engineer – production engineer who began work with Aramco in 1970 working in exploration, production and project management and who is now a consultant) – “The Facts Are There”. Here are some of Mr. Husseini’s observations on oil availability in the near and longer term:

“Sadad: I’ve been tracking the number of projects, globally, for a long time in the Middle East and elsewhere — Russia, Brazil, west coast of Africa and others. A lot of this information is in the public domain, so there is no mystery there. The International Energy Agency recently reported on the same numbers. The bottom line is that there are not enough projects. There is not enough new capacity coming on line, within say the next five or six years, to make up for global declines. …”

Even at these modest decline rates, we are basically going to see a shortage of capacity within two to three years. We’re being lulled by the current excess capacity, which has more to do with lower demand than anything to do with supply. So we do have a problem in the near term. In the longer term it’s even worse because in the longer term the lead time to discover, develop and put on line production runs into 10 years. And there isn’t enough being done in the long term as well. So it’s both a short and a long-term problem.“

PH Comment: With all of the foregoing, and knowing that food production is very much related to oil production (quantity produced, processed, transported/distributed, stored, and cost), perhaps it’s time to remind ourselves of those two nagging questions: “Got food storage?” and “Got garden?”

Until next time; keep your eyes on the horizon as the weathers changing fast.