With Oil Production Near Peak, Analysts Worry About Meeting Growing Demand
Most people in the oil and gas industry believe prices will come back down in the months ahead as new production comes online and economic growth cools. But what would happen if oil production were not able to keep pace with demand? What if, in fact, worldwide production were to peak soon, meaning that less-and-less oil would be produced every year even as demand soars?
These are the questions that haunt people like Matt Simmons, a Houston-based investment banker who has spent 30 years working with the energy sector.
"I am increasingly convinced that we must be at a level now where it is going to become really difficult to get any significant increases in supply and, conversely, demand has become a runaway train," he said.
In a VOA interview, Mr. Simmons expressed concern that very little is being done to prepare for a possible peak in production and that there is, as yet, no alternative form of energy available that can even come close to replacing oil.
"We do not have a plan B," he said. "We literally do not have any kind of workable solution for what we would do in a world that is basically geared up to use more and more non-renewable energy, and if that day finally comes when we are going to have to get along next year with only 98 percent of what we had this year and the year after that it is going to be 95 percent and then the year after that it is going to be 90 percent? What do we do? And the answer is that we do not have any idea."