[PRCo]

[Fred Schneider]

Bill Vigrass also forwarded this item.   Nice isn't it.   Oil  
supplies peaking at the same time 1.3 billion Indians and 1.0 billion  
Chinese want automobiles.



Oil industry 'sleepwalking into crisis'
Former Shell chairman says that diminishing resources could push  
price of crude to $150 a barrel
By David Strahan and Andrew Murray-Watson
Published: 17 September 2007
Lord Oxburgh, the former chairman of Shell, has issued a stark  
warning that the price of oil could hit $150 per barrel, with oil  
production peaking within the next 20 years.

He accused the industry of having its head "in the sand" about the  
depletion of supplies, and warned: "We may be sleepwalking into a  
problem which is actually going to be very serious and it may be too  
late to do anything about it by the time we are fully aware."

In an interview with The Independent on Sunday ahead of his address  
to the Association for the Study of Peak Oil in Ireland this week,  
Lord Oxburgh, one of the most respected names in the energy industry,  
said a rapid increase in the price of oil was inevitable as demand  
continued to outstrip supply. He said: "We c an probably go on  
extracting oil from the ground for a very long time, but it is going  
to get very expensive indeed.

"And once you see oil prices in excess of $100 or $150 a barrel, the  
alternatives simply become more attractive on price grounds if on no  
others."

Lord Oxburgh added that oil majors must invest more heavily in  
developing viable alternatives to oil and gas. "If you look at it  
from oil companies' point of view, effectively what they're doing at  
the moment is continuing business as usual, and sticking their toes  
in the water in a number of areas which might become important in  
future.

"But at present there is a relatively poor business case for making  
significantly greater investment in these new areas."

Commenting on whether "peak oil" - the point when global oil  
production goes into terminal decline - was likely to be reached in  
the near future, he said: "In a way it scarcely matters; what really  
matters is the gap between production and de mand. I don't know  
whether there is going to be a peak in world oil production, whether  
it's going to plateau and then slowly come down.

"It could well plateau within the next 20 years, and I guess I would  
be surprised if it hadn't."

The price of crude oil closed above $80 a barrel for the first time  
on Thursday, as a hurricane in Texas raised supply concerns.

US light crude hit $80.20, two cents higher than the price it touched  
on Wednesday. Oil prices have risen 30 per cent since the start of  
this year and are four times higher than their 2002 level.

The latest figures from the US Energy Information Administration show  
that global liquid fuels production in August was almost a million  
barrels per day lower than the same period in 2006.

The International Energy Agency has forecast what it calls an oil  
"supply crunch" by 2012, a prediction that Lord Oxburgh said could  
possibly come to pass. Lord Oxburgh is currently chairman of D1 Oils,  
a biodiese l company listed on the AIM market.

Tony Bailey