Experts Agree – Oil Supplies Won’t Grow

April 22, 2011 at 11:49 pm Leave a comment

Experts have been debating the existence and timing of “peak oil” for the past decade. “Peak oil” refers to the volume of oil production, number of barrels per year, and not price. The United States passed its peak in 1970. From that point onward, the discovery and development of new U.S. oil fields, including offshore fields like the one involved in last year’s BP Gulf disaster, have failed to make up for declining production in older fields. This explains, in part, why our country has had to import more and more oil each year.

Some experts have said that world-wide production will peak sometime during the first half of this century. Other experts, pointing to a sensible connection between oil prices and oil productions, have asserted that increasing prices will provide a financial incentive to oil companies, encouraging them to explore more and to retrieve harder-to-pump (and, by definition, more expensive) crude.

Although one expects price to drive production, it can’t do that if production is limited by other constraints. An article in the March 25 edition of Science, “Peak Oil Production May Already Be Here,” points out that “despite a near tripling of world oil prices, non-OPEC production, which accounts for 60% of world output, hasn’t increased significantly since 2004.” For the past six years, prices have gone up, but production has stayed flat. According to the experts quoted in the article (including those at ExxonMobil), non-OPEC production may hold steady for “another decade or so”, but it will inevitably start to decline after that. If that’s true, adopting a ‘drill, baby, drill’ policy will have little beneficial effect.

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Entry filed under: In the News.

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