Tech Talk - Predictions

From time to time I have written about the dubious assumptions that lie behind some of the predictions made by Energy Agencies and some of the larger oil producing companies as they predict the energy supplies and demands of the next few years.

It is relatively simple to make those criticisms given that one has only to compare ongoing reality with the assumptions to be able to judge that the future is unlikely to be as rosy as any of these folk imagine.

However there is this strong tradition of making the odd prediction at the start of the New Year. Yet having just spent about 2 hours digging snow out of my drive (an hour and a half for the first session which moved most of the snow and then thirty minutes to remove all the snow shifted back into the drive when the snowplow came by clearing the center of the road) my creative buds are a little slow this evening, but I would suspect that it is not hard to make one or two suggestions, and then go back and so how they panned out.

Last year I was quite pessimistic about the future, given the pull back in Arctic drilling following the grounding of the Shell drillship and had some question on the stability of the domestic production levels. Well a year later the situation in the Arctic has perhaps grown a little less encouraging for those who would anticipate early development of those resources, but on the other hand domestic production has continued to increase.

For next year I suspect that the situation with China, in terms of its attitude to acquiring sufficient energy reserves, will not improve. There are already suggestions that China will adjust its position in regard to the importation of Iranian oil and may increase purchases, despite the ongoing sanctions. Similarly it is refusing to recognize arbitration in its dispute over ownership of the China Seas (East and South). To keep the projection vague (and thus less likely to be too far off) I would expect that this will get worse over the next year, and the steps China is willing to take to ensure future energy supplies will become more obvious.

In this regard I suspect China will continue to beat out India in the pursuit of available resources around the world, though the consequences for this in India won’t likely become evident for a couple of years yet.

There will likely continue to be enough available crude to meet demand through next year (depending on how the various conflicts in the different countries of the Middle East develop) but it may be the last year in which this holds true. With the Kingdom of Saudi Arabia determined to hold production at a maximum of around 10 mbd, with Iraq increasingly troubled by growing sectarian violence and with other regional countries similarly destabilizing there are only a few places where increased production can be brought on line to meet demand – and that problem may become evident in 2015.

So having made a couple of relatively obvious suggestions let’s see how 2014 turns out for us all – though I hope it brings you Prosperity and Success!