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Future strategy to survive discovering 1 out of every 20 bbls of oil we now use.

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sculpin:
Incredible .We are now only "discovering 1 out of every 20 bbls of oil we use". This fact should be forefront in most people's minds as they think into the future for their living standards, choice of residence, employment & portfolio strategy to allow them to both survive and profit from this trend. Certain energy industry followers already believe current demand is greater than supply with oil being drawn down from non US inventories.

http://oilprice.com/Energy/Crude-Oil/Oil-Price-Spike-Inevitable-As-New-Discoveries-Hit-Seventy-Year-Low.html

Obviously this is not sustainable.  Thoughts on each scenario:

1. This will end very badly for civilization as we now know it. Modern humans are so fossil fuel dependent (& not just transport - heating, electrical related but agriculture, plastics and other modern derived products). Large price spikes will be need to encourage F&D and to curb ever growing WW demand.

2. There will be a renewable solution along with slow draw down on fossil fuels to offset most of a shock to the system.

3. A complete polyanna solution that is coming soon (ie fusion, breakthrough battery tech, EV breakthru etc) or future discoveries (ie shale) will quickly move to a higher replacement level.

Portfolio strategy to profit from potential soaring oil prices in the future? (ie long % allocation to oilsands/shale, short airlines/chemicals etc) Timing and sector allocations both short and long. My bet is currently with the first outcome that we will be going back to an oil price spike situation sometime in the next 2 years.

What is chance of loss of large producer suddenly (ie Saudi with 10.5mm bbls/d) like what has happened to Libya - immediate and devastating black swan type of event on world economy, investments etc. Good use of far out of money LEAP options both bull (energy producer call) and bear (general market put or sector?) as portfolio insurance?   http://oilprice.com/Energy/Energy-General/Yemeni-Rebels-Claim-Unconfirmed-Second-Strike-On-Saudi-Aramco-Oil-Facilities.html


some say supply could fall short by about 4 mb/d by 2018-2020 compared to previous estimates from 2014. For an oil market only suffering from a surplus of less than 1 mb/d currently – and only as much as about 2.5 mb/d at its worst – a supply drop off of that magnitude could be enormous. Sure, crude oil and refined product inventories will take time to get worked off, but once that buffer is gone, the global economy could find itself a little short on crude oil. Prices would subsequently spike because the projects that have been cancelled won’t come back online at a moment’s notice.


sculpin:

https://pbs.twimg.com/media/Crm0xGXUIAELdlH.jpg:large





https://climateequilibrium.wordpress.com/2016/02/26/are-renewables-just-a-dream/#jp-carousel-242

tombgrt:
The article mentions the threat of EVs but I can't see how current infrastucture would be able to carry this electricity demand in the near future unless we seem ridiculous technological advancement in the current renewables? In 10 years a lot can and will happen but in 2-3 years the impact will be small even if they find some breakthrough tomorrow.

Jurgis:
Just making sure: are we talking peak oil/gas again? Fracking taught us nothing?

rkbabang:
"New discoveries hit 70 year low."

It is no coincidence that this is occurring while oil prices are low and have been remaining low for a few years.  If oil prices hit $120/bl again you will see the discovery rate magically improve.  Supply and demand, it is all about incentives. Right now it doesn't make a ton of sense to spend a fortune looking for oil.

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