Björn Lindahl has published an article on activities and investment on the world’s seas. (20120108 in Swedish in the edition of Svenska Dagbladet Industry [the business section of one of Sweden’s major broadsheet newspapers].) He states that 59,000 freight ships ply the world’s oceans and that the world’s shipping turns over $183 billion per year. He also asserts that only half of the fish that we eat are caught wild at sea, the rest being cultured in large cages or on land in dams/ponds. We know that Norway is a large producer of fish. Naturally, he also writes about the offshore oil industry and asserts that a third of all oil production, 24 million barrels per day, is produced offshore (NGL is excluded). At a price of $100 per barrel that is oil worth $860 billion, nearly five times as much as all sea traffic. 17,000 fixed or floating oil production platforms have been built and 400 new platforms are built every year if one includes those installations built directly on the seafloor.
With this in mind, it is amazing that there are no further accidents at sea. It is estimated that investments in offshore oil production increased by $213 billion in the last year, i.e. approximately 25% of the income during the year (or $25 per barrel) was reinvested in new installations. The greatest investments involved production at depths of over 1000 meters. If one considers these production costs then one can see that the era of cheap oil is a thing of the past. I would just like to remind the reader that ten years ago the world’s collective economic expertise considered that the price of oil in 2020 would be under $30 per barrel. The quest for oil at sea is now moving into areas of contested sovereignty, the most serious conflict of which is the dispute between China and Japan. In connection with this, I would just like to mention that the volume of oil currently produced by fracking is 1 million barrels per year (1 Mb/d) and the most optimistic estimates put this volume at 2-4 Mb/d by 2020. So you certainly can understand how the “fracking bubble” of oil optimism that is currently being inflated by the oil industry will soon “fracture”.