World oil production peaked in 2006 and will start falling some 7% per year, falling by 50% by 2030 says a German report, while famed Texas oil man T. Boone Pickens agrees.
According to Bloomberg: last Friday, Pickens, in an interview held in Houston at the Association for the Study of Peak Oil & Gas, a non-profit think tank noted, "Global production has peaked at 85 million barrels a day, Pickens, 79, said in an interview today at a Houston conference sponsored by the Association for the Study of Peak Oil & Gas, a non-profit think tank. Oil will rise to $100 a barrel before falling to $80 again, he said. Earlier this week, he said crude would reach $100 by year's end."
Pickens added several sobering thoughts: '``As this unfolds, you're going to have to find alternatives that are going to do the job that oil is doing. `Everyone is going to have to come to grips with this in the next two or three years. People are going to have to figure it out.'''
Crude oil prices fell slightly overnight, but if the conclusions reached by the German based Energy Watch Group is correct, we might see prices move significantly higher at some point in the future.
And he's not alone. According to the U.K.'s Guardian, in a report released on Monday, the Energy Watch Group summarized its findings, thus: "World oil production has already peaked and will fall by half as soon as 2030, according to a report which also warns that extreme shortages of fossil fuels will lead to wars and social breakdown."
The report is the total opposite of the view put forth by the International Energy Agency, a group which is supported by the governments of the OECD, a group of developed nations.
According to the Guardian, the author of the report, Joerg Schindler, "said its most alarming finding was the steep decline in oil production after its peak, which he says is now behind us."
What makes the study interesting is that it is based on actual oil production data, "which, it says, are more reliable than estimates of reserves still in the ground. The group says official industry estimates put global reserves at about 1.255 gigabarrels - equivalent to 42 years' supply at current consumption rates. But it thinks the figure is only about two thirds of that."
Putting some numbers on the big picture, the Guardian added: "Global oil production is currently about 81m barrels a day - EWG expects that to fall to 39m by 2030. It also predicts significant falls in gas, coal and uranium production as those energy sources are used up."
In the past several years, we have seen significant data supporting that the report is likely to be at least regionally correct. For one thing, the U.K.'s oil production peaked in 1999. Recently Mexico's largest field, Cantorral, has been shown to be headed toward drying, and has been projected to be depleted over the next 7 to 10 years, according to some estimates.
Venezuela's oil production numbers are widely seen as being a lot less than the government reports, even though the country has huge heavy crude supplies in the Orinoco river basin.
And Indonesia and Iran, both OPEC countries, import much of their own domestic consumption of oil and gasoline respectively.
The report is being seized upon by environmentalists and supporters of renewable fuel supplies as a battle cry.
Yet, renewable fuels are by no means a panacea, given the still present inefficiency of solar cells, and the environmental damage caused by ethanon production, at least when it is produced by corn, as it is in the United States.
Ethanol's other problem is that, at least in the U.S., there is still no significant infrastructure to move the fuel around the country economically, while there are still very few gas stations that are set up with ethanol pumps.
Conclusion
Peak oil, off the radar screen for a while is making a strong comeback. And the situation at the current time makes the concept ripe for exploitation.
There is little doubt about it, the easy oil has been found, and much of it has been extracted.
Yet, the devil is, for us, in the details. Is oil production falling because the Earth is running out of oil, or is the problem one of oil companies not being willing or able to go and find new sources and efficiently extract them.
The problem is complex, and is at least partially influenced by nationalism and politics.
Russia, Venezuela, and Nigeria, to name a few, are perfect examples of the politics involved. The former two have essentially kicked out foreign oil companies and have installed their own, often technologically inferior and inefficient government companies as the centerpieces of their oil industry.
Saudi Arabia's Aramco, is a model of a fairly efficient government run oil company, although it has gathered criticism of late, from Mathew Simmons, about neglecting its biggest oil field Ghawar.
Finally, the real question is whether the current technology is efficient enough to find new sources economically, and then assuming that the politics can be ironed out, get the oil that's still left out of the ground.
If the geopolitics don't get smoothed out, though, it doesn't really matter how much oil is in the ground because Exxon and Chevron won't be able to get inside the new age Iron Curtains to get it out.
In that case, Peak Oil would be an artificial construct. But for consumers, and the global economy, it really wouldn't matter. |
