Jeff Rubin, chief economist for CIBC World Markets, predicted today that oil prices will top US$200 per barrel by 2012. Gas? Get ready to pay $2.25 a litre by then.
In a new report, Mr. Rubin forecast a continued run-up in crude prices, despite a slowing world economy and slumping petroleum demand in United States, the world's leading oil consumer.
He said he expects crude prices – now trading at above $116 (U.S.) a barrel - to average $150 by 2010, and more than $200 by 2012. That would translate into pump prices of $7 (U.S.) per gallon in the United States, and $2.25 per litre in Canada, double the current levels.
“Whether we are already at the peak of world oil production remains to be seen, but it increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity,” the economist said.
Rubin mentioned relatively stagnant oil production coupled with growing demand in developing countries like India and China as the reason oil will continue to climb in price.
The good side I didn't see mentioned anywhere is that this could help the fight to reduce greenhouse gas emissions.
A snippet of a CTV.ca story on this week's StatsCan release on the environment:
Here are some key statistics from the 2007 and 2008 edition of StatsCan's Human Activity and the Environment, released to coincide with Earth Day:
- 1990: Canada releases 596 megatonnes of carbon dioxide into the atmosphere.
- 2005: Canada releases 747 megatonnes of carbon dioxide
"One megatonne is equal to one million tonnes. To put this in perspective, driving a mid-size car about 5,000 kilometres results in about one tonne of emissions," the study says. ....
Here's another factoid: 20 cars idling two minutes each a day for a year produces a tonne of emissions.
Here's more factoids from Statistic's Canada's climate report:
Transportation activity is a major source of emissions related to the combustion of fossil fuels, and accounted for 33% of emissions and 37% of growth in energy-related emission sources since 1990. Of particular note was the 109% increase in the emissions from light-duty gasoline trucks (from 21.3 Mt in 1990 to 44.5 Mt in 2005), reflecting the growing popularity of sport-utility vehicles, vans and light trucks. These vehicles, which emit, on average, 40% more GHG emissions per kilometre than gasoline automobiles, increased emissions by 23.2 Mt from 1990 to 2005.
Mining and oil and gas extraction activities accounted for only 2.6% of energy-related emissions in 2005, but their increase from 1990 levels was 152%. From 1990 to 2000 the energy requirements per barrel of conventional light/medium oil extracted nearly doubled. 10 , 11 At the same time, highly energy- and GHG-intensive synthetic oil production from oilsands has become increasingly competitive with conventional oil extraction. These trends contributed significantly to the rapid rise in emissions attributable to mining and oil and gas extraction activities from 1990 to 2005.
In 2008, oilsands producers intend to invest $19.7 billion, up 23% after a 31% hike in 2007. This exceeds the total investment plans of $19.6 billion by all manufacturing industries (Chart 1.6). Oilsands investment has surpassed manufacturing because of its rapid growth, not because manufacturing has been weak. Just a decade ago, oilsands investment was less than one-tenth capital outlays by manufacturers ($1.4 billion versus $21.6 billion in 1998).
In terms of GHGs emitted, the oilsands are even dirtier than coal.
We want to ramp up the oilsands to produce oil to burn in our SUVs, which are themselves much dirtier GHG emitters than cars.
This oil addiction is costing us in many ways.