Oil and gas prices continue to rise; figures, facts and forecasts

A glance at the statistics clearly shows that the trend is upwards. The current prices of around $ 70 / barrel (159 litres) take crude oil to a new record level, and, according to the forecasts, even $ 100 / barrel is a possibility.

 
The basic price increase over the last few years can be attributed in part to the explosion in crude oil consumption in the emerging economies of China and India. Over the coming years the unabated rise in industry and mobility in these countries will result in an ever increasing demand for oil.
Furthermore, past and present global events and trends have given and continue to give rise to large price hikes and their incidence, natural disasters included, is more than likely to increase in the future. In the Gulf of Mexico, the hurricanes ‘Ivan’ (2004) and ‘Katrina’ (2005) have brought a large part of the oil extration and processing industry to a standstill for weeks on end. Global changes in the world’s climate will continue to be a trigger for an increase in frequency of extreme weather events.

Another reason for oil price increase is a phenomenon called peak-oil. As oil is extracted from a field, it becomes increasingly difficult to maintain the rate of extraction. When the content of a field reaches half of its initial content, production decreases and some techniques, like water injection, have to be used to maintain a certain production. When this concept is applied to the global oil production, it is obvious that global production has to decrease at some point. Another way to look at it is that the oil industry exploited first the easier to extract and refine, and therefore cheaper, resources. As time advances, exploration switches to harder to reach (deeper, farther,…) resources and lower (heavier, sourer) grades. In this context, oil prices can only increase as production continues. Some major oil producers have already admitted that we are approaching peak-oil, Chevron has even dedicated a website to it: http://www.willyoujoinus.com/

Before the start of the heating season 2006 / 2007 it is quite possible that speculation will bring about a rise in the oil price.

The price of gas is linked to the oil price and currently stands at a similarly high level. The German Federal Statistics Office bases its comparative calculations on a gas energy output of 33540 kilowatt hours, a quantity of energy equivalent to 3000 litres of heating oil. According to figures produced by the German Federal Statistics Office, the cost of this quantity of gas has increased from €1,000 in the year 2000 to €1,600 in 2005. Currently (2006), we now already pay over € 1,800 for the same comparative quantity of gas, i.e. an average increase of 80% compared to 2000!

These alarming trends should provide every incentive to consider alternatives to oil and gas and to incorporate the above-mentioned aspects in our building design and amortisation calculations.
Geothermal heat and solar radiation provide independence from world markets.
Building on these two pillars, IMMOSOLAR designs energy systems that guarantee house owners security and independence.