The Oil Drum: Canada

Sands are shifting for oil supply

The world continues to run rapidly out of oil and natural gas, which points to dramatically higher prices in a handful of years.

That was the message from Henry Groppe, a lanky Texan who advises oil companies and investors around the world about the world of prices. His firm, Groppe, Long & Littell, is based in Houston and was founded after he did stints as a chemical engineer for Saudi Arabia's Aramco, Dow Chemical, Monsanto and Texaco.

"The fundamentals always prevail, which is that the minute you start producing, you are depleting your resource," he told an audience of investors last week at a conference sponsored by Calgary's Pengrowth Energy Trust.

He showed production curves in the North Sea and Mexico that are catastrophically sudden in terms of their declines.

"This has a huge impact on the economies of Britain and Mexico," he said. "Britain became an oil importer this year for the first time in decades."

Oil production worldwide peaked months ago, but figures and prices don't reflect that yet because the production of liquids stripped from natural gas has been filling the gap, he said.

Clean up your own backyard, Stelmach tells Gore

Gore was in Calgary speaking at a sold-out Jack Singer Concert Hall about his Academy Award-winning documentary, An Inconvenient Truth, which argues global warming, spurred by the use of carbon-based fuels such as oil and coal, is the biggest threat facing the world.

He has targeted the oilsands, suggesting far too much natural gas is burned processing northern Alberta's bitumen.

But Stelmach, who hasn't seen the documentary, said Monday in Calgary the province is merely feeding Americans' insatiable demand for energy, so perhaps Gore should look closer to home.