Using a highly sophisticated model, Ibrahim Sami Nashawi, Adel Malallah and Mohammed Al-Bisharah (working for Department of Petroleum Engineering, College of Engineering and Petroleum, Kuwait University, Kuwait and Kuwait Oil Company) evaluate oil production and depletion rates for 47 major oil producing nations.

Here’s their main conclusion (full report):

The analysis of 47 major oil producing countries estimates the world’s ultimate crude oil reserve by 2140 BSTB and the remaining recoverable oil by 1161 BSTB. The world production is estimated to peak in 2014 at a rate of 79 MMSTB/D. OPEC has remaining reserve of 909 BSTB, which is about 78% of the world reserves. OPEC production is expected to peak in 2026 at a rate of 53 MMSTB/D. On the basis of 2005 world crude oil production and current recovery techniques, the world oil reserves are being depleted at an annual rate of 2.1%.

While I agree with their conclusion on non-OPEC production, which is already mostly in decline, I wonder about their conclusion on OPEC production. The researchers forecast OPEC production to grow at significant rates until around 2026, which seems unlikely given the experience during 2005-2008.

From 2005-2008 oil prices skyrocketed, but OPEC production barely budged. Spare capacity was maxed-out. So where are the production increases coming from?

I’m not a geologist, so I could be wrong about OPEC production. Regardless, even with these suspiciously optimistic OPEC growth rates, peak global production is still forecast to occur by 2014.

Time to sell your Hummer.

Breaking News: Some Bullshit Happening Somewhere

Despite what the marketing machines at financial services companies tell you, retirement will not include golf, health, laughter and clean white shirts.

Here’s the reality for the children of many baby-boomers:

- Your parents can’t afford healthcare or to live in a nursing home, so they’ll probably move in with you.
- Your parents have spent every penny, don’t own a house and can’t afford rent. Many may even be in debt.
- Your parents are slowly falling to pieces as years of poor lifestyle add up.

The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009, according to the Employee Benefit Research Institute’s annual Retirement Confidence Survey. This did not include primary residences, so there is some hope. But for 43% of workers to have less than $10k in liquid assets is scary.

LINK

During the early 1990s, America was hit by a new kind of recession – one that targeted middle-office workers. “Downsizing” became part of our vocabulary and for the first time many white collared workers felt vulnerable. However, the corporate re-alignment that came with downsizing helped trigger the start of a massive bull market. Arguably, the 1990s was the last period of real economic growth for America.

Moral of the story: consumer sentiment is backward-looking and has a poor track record predicting economic activity.

Full ABC News Press Release

Enough from me…Mohamed El-Erian (Chief Executive of PIMCO) published an Op-Ed in the Times on the major shifts occurring in the world right now:

“Today, we should all be paying attention to a new theme: the simultaneous and significant deterioration in the public finances of many advanced economies. At present this is being viewed primarily – and excessively – through the narrow prism of Greece. Down the road, it will be recognised for what it is: a significant regime shift in advanced economies with consequential and long-lasting effects. To stay ahead of the process, we should keep the following six points in mind.”

Source: Financial Times

A recent Guardian article highlights this growing trend:

The 1,000 hectares of land which contain the Awassa greenhouses are leased for 99 years to a Saudi billionaire businessman, Ethiopian-born Sheikh Mohammed al-Amoudi, one of the 50 richest men in the world. His Saudi Star company plans to spend up to $2bn acquiring and developing 500,000 hectares of land in Ethiopia in the next few years. So far, it has bought four farms and is already growing wheat, rice, vegetables and flowers for the Saudi market. It expects eventually to employ more than 10,000 people.

But Ethiopia is only one of 20 or more African countries where land is being bought or leased for intensive agriculture on an immense scale in what may be the greatest change of ownership since the colonial era.

http://www.guardian.co.uk/environment/2010/mar/07/food-water-africa-land-grab