And you think gas prices are expensive today...
World oil supply may have already peaked
by Lester Brown
Is world oil production peaking? Quite possibly, says Lester Brown from the Earth Policy Institute. Data from the International Energy Agency (IEA) show a pronounced loss of momentum in the growth of oil production during the last few years.
After climbing from 82.90 million barrels per day (mb/d) in 2004 to 84.15 mb/d in 2005, output only increased to 84.93 mb/d in 2006 and then declined very slghtly to 84.93 mb/d in 2007.
The combination of world production levelling out or starting to decline while demand continues to rise rapidly is putting strong upward pressure on prices. Over the past two years, oil prices have climbed from $50 to nearly $100 a barrel. If production growth continues to lag behind the increase in demand, how high will prices go?
There are many ways of assessing the oil production prospect. One is to look at the relationship between oil discoveries and production, a technique pioneered by the legendary US geologist M. King Hubbert. Given the nature of oil production, Hubbert theorized that the time lag between the peaking of new discoveries and that of production was predictable. Noting that the discovery of new reserves in the United States peaked around 1930, he predicted in 1956 that US oil output would peak in 1970. He hit it right on the head.
Globally, oil discoveries peaked in the 1960s. Each year since 1984, world oil production has exceeded new oil discoveries, and by a widening gap. In 2006, the 31 billion barrels of oil extracted far exceeded the discovery of 9 billion barrels.
(The rest is here. Lester R. Brown is President of the Earth Policy Institute and author of Plan B 3.0: Mobilizing to Save Civilization, a book that is required reading for anyone concerned about the planet's future.)
by Lester Brown
Is world oil production peaking? Quite possibly, says Lester Brown from the Earth Policy Institute. Data from the International Energy Agency (IEA) show a pronounced loss of momentum in the growth of oil production during the last few years.
After climbing from 82.90 million barrels per day (mb/d) in 2004 to 84.15 mb/d in 2005, output only increased to 84.93 mb/d in 2006 and then declined very slghtly to 84.93 mb/d in 2007.
The combination of world production levelling out or starting to decline while demand continues to rise rapidly is putting strong upward pressure on prices. Over the past two years, oil prices have climbed from $50 to nearly $100 a barrel. If production growth continues to lag behind the increase in demand, how high will prices go?
There are many ways of assessing the oil production prospect. One is to look at the relationship between oil discoveries and production, a technique pioneered by the legendary US geologist M. King Hubbert. Given the nature of oil production, Hubbert theorized that the time lag between the peaking of new discoveries and that of production was predictable. Noting that the discovery of new reserves in the United States peaked around 1930, he predicted in 1956 that US oil output would peak in 1970. He hit it right on the head.
Globally, oil discoveries peaked in the 1960s. Each year since 1984, world oil production has exceeded new oil discoveries, and by a widening gap. In 2006, the 31 billion barrels of oil extracted far exceeded the discovery of 9 billion barrels.
(The rest is here. Lester R. Brown is President of the Earth Policy Institute and author of Plan B 3.0: Mobilizing to Save Civilization, a book that is required reading for anyone concerned about the planet's future.)
Labels: energy, Lester Brown, peak oil, Plan B 3.0
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