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Oil Experts: 80 dollars per barrel is just the beginning

The world is headed towards a long period of high oil prices. That was the singular message of oil industry insiders today at the yearly conference of the Association for the Study of Peak Oil & Gas in Cork, Ireland.

James Schlesinger, former Energy Secretary of the United States told the audience that : "Increasing the supply of oil is becoming increasingly difficult. In the large oil fields of the world, such as Cantarell in Mexico and Burgan in Kuwait, oil production is rapidly decreasing. Even the heads of large oil companies, united together in the American National Petroleum Council, agree that we should decrease our consumption of crude oil rapidly by reducing our consumption and change to renewable energy sources."

His message, that the world is headed for a a long period with higher oil prices, was confirmed in speeches by amongst others Ray Leonard, Vice-President of Kuwait Energy Company, James Buckee, the CEO of independent oil company Talisman Energy and Jeff Rubin, chief economist of the Canadian Imperial Bank of Commerce. Jeff Rubin's speech was concerned with the consumption of oil in producing countries (Russia, Mexico, OPEC) which is increasing so fast that the west should start to worry about their oil-imports. In the words of Rubin: "*OPEC is cannibalizing it's own exports, in the coming years OPEC exports will decline because of increasing consumption*." According to Rubin the combination of lower than expected increases in production and higher
consumption in OPEC will lead to triple digit oil prices. The situation will worsen because hardly any Western oil company has access to the remaining oil reserves. "90 percent of the total reserves in the portfolio of Western
oil companies is residing in areas were production in the next 10 years will drop with 33 percent. Because of a lack of access to OPEC countries and the Formal Soviet Union, oil production of the western oil majors can only

Also striking was the presentation of Ray Leonard. The former Vice-President of Yukos was one of the participants of a private conference, off limits to the press in 2006 in Heidelberg, Germany. There, representatives of the major oil companies and governments, as well as the OPEC members in all openness discussed their estimates for worldwide oil reserves. Suprisingly they were much lower then much used estimates of governmental agencies such as the United States Geological Survey (USGS) and the International Energy
Agency. Where the USGS gives numbers in the order of 700 billion barrels for yet to find oil reserves, the industrial consensus of the Heidelberg Conference was 250 billion barrels.

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