When will the world start running out of oil?
The Manila Times Internet Edition
By George Jahn, Associated Press Writer
VIENNA, Austria: Fact: The world will someday start running out of oil. Up for debate: When—in months, years, decades?
Despite rapidly growing demand, crude will be plentiful for at least another generation, according to top producer Saudi Arabia, major oil companies and others in the oil industry. But some experts argue that OPEC’s reserves are overstated, recovery technologies have serious limitations and the day that demand starts to outpace supply may soon be upon us.
Most bearish is Princeton professor, geologist and oil maverick Kenneth S. Deffeyes, who uses a formula based on known reserves and production figures that predicted 1970 as the start of oil production decline in The United States. It actually occurred shortly afterward in 1971, and Deffeyes sees the same situation in global production occurring this year.
Deffeyes’ prediction is clearly controversial. Still, dozens of energy experts and academics are taking the “peak-oil” theory increasingly seriously.
The US Geological Survey has predicted that a peak in recoverable oil production won’t come until 2037, and Saudi Oil Minister Ali Naimi, in a speech this year in Washington to industry experts, declared that “technological innovation will allow us to find and extract more oil around the world” for the foreseeable future.
The Paris-based International Energy Agency predicts that present demand, at around 83 million barrels a day, will jump to 90 million barrels in five years. Projections from other groups are different—but all point to increasing consumption over the coming years fueled by growing energy hunger from China, India and other Asian economic powerhouses.
Believers in plentiful oil say there is nothing to worry about because the world’s proven reserves amount to 1,277 billion barrels and expected technological advances will soon open up supplies now impossible or unprofitable to exploit.
Wrong, say the critics.
Today’s “proven reserves” are computed on the basis of the rate of production in 2004—a rate that already has been exceeded this year. As the world’s hunger for oil grows and the pace of production increases, so will the rate of reserves depletion.
More worrisome is what they claim is inflated reporting by Saudi Arabia, Iran and most other OPEC members. The Saudis, Iranians and other OPEC nations deny padding their figures. But energy consultant Matthew Simmons says that except for Libya, Algeria and Nigeria, “all of the [OPEC] countries tripled their [reserve] data without any data” to support such increases in the 1980s.
Simmons argues Middle East proven reserves are very likely only a third of the approximately 700 billion barrels being claimed.
Simmons also dismisses claims that improvements in technology will extend the petroleum age by increasing oil recovery from reserves above the 40 percent now possible. He points to North Sea oil, saying production there peaked six years ago, despite all out oil-industry attempts to increase output by tapping unexploitable reserves through new means.
Of course, if demand sags, the petroleum era will last longer. So, when is oil going to peak?
Simmons suggests it could be sooner than later.
“The difference between peak oil happening and [oil] running out completely is the difference between me saying ‘I’m getting slightly hungry’ and ‘I’m starving to death.”