Peak Oil News: Oil's Slippery Slope

Wednesday, August 25, 2004

Oil's Slippery Slope

Asia Times

Welcome to peak oil

According to HSBC, oil is now 136% - and counting - more expensive than before September 11, 2001. The United States - with 5% of the world's population - gobbles up no less than 26% of the world's oil production.

The world currently consumes 81.2 million barrels of oil a day (1 barrel = 159 liters), according to the International Energy Agency (IEA), the energy forum for 26 industrialized consumer nations. But the really alarming figure is 84 million barrels of oil a day: according to the IEA, this will be the global demand by 2005.

A few months ago, the same IEA was saying that demand in 2005 would be of only 82.6 million barrels a day. And more than a year ago, the IEA said we would reach 84 million barrels a day only by 2007 or 2008. This is leading analysts in Dubai to predict that demand - on a very optimistic scenario - will reach 120 million barrels a day in 2020. Additionally, this should mean that if demand continues to grow at the current frenetic level, all proven oil reserves in the world - at the best-estimate level - will be extinguished by 2054.

Way before that happens, of course, we will reach what experts define as "peak oil". The oil-supply bell curve inexorably will be going down - with no return in sight - while the price curve will be going up, toward $100 a barrel and beyond.


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