Even though I have mentioned Peak Oil as part of the Perfect Storm, and in other posts, I have not really given it the attention that it deserves.
Peak Oil has become the most popular phrase to describe the intersection of supply and oil demand curves in the world economy. Its premise states that most of the World's large oil fields have been discovered and that many are now in decline. This is certainly true for Texas, the US, the North Sea, and Russia according to these numbers from the Association for the Study of Peak Oil. This European group even shows the Mid East production to be flat at 20 million barrels a day until 2020 when, it too, begins to decline.
According to these figures and many more, Peak Oil, or the time in which demand will outstrip the ability to supply, will occur around 2007. There are some who say it happened in 2004. Others say this year. Even the Oil Industry says 2017, so that tells you something.
The data show that the average delivery for 2004 was 82 million.
The number is closer to 84 million as of last month.
As the economies of China and India continue to grow, their demand places stress on the oil infrastructure. Yet, according to these projections, supply will be less in 2010 at 80 million per day, and only 70 million barrels a day in 2020. By 2050, as the barrel truly begins to empty, the industry will only provide 35 million barrels a day. Under normal growth, the World would need 160 million a day.
The shortfall is nothing short of staggering.
It is instructive to note that at the beginning of the 90s during the Clinton administration, oil demand was 62 million barrels a day.
A simple google search reveals an enormous growth of sites dealing with the issue.
One of the leaders in the Peak Oil movement has been Colin Campbell. He was a follower of the now famous M King Hubbert, the geologist that developed the famous curve named after him.
Hubbert predicted that the American oil fields would decline in the early 1970s and everyone laughed.
They are not laughing now.
When I wrote a book 3 years ago for the Department of Energy, I brought the Peak Oil issue up. At that time it was outside of the bell curve of acceptable thought. Today, it is totally inside. And even though the Energy Information administration does not publish it, that certainly doesn't mean that they have plausible alternatives. Most Oil analyst point to deep oil, polar oil, and heavy oil as replacements for the existing fields.
Ironically enough, polar oil becomes more and more realistic as the the polar ice cap grows thinner and thinner from climate change.
Large oil deposits in the tar sands of Alberta have been suggested as replacements, but they require large amounts of free natural gas to separate the tar from the sand. They have been around for a long time. And 2 million barrels a day would double their present contribution.
Some oil folks simply discount the facts and proudly exclaim that there is no shortage of oil at all. The facts they often discount is the energy requirements in separating shale oil or tar sands. The above story leans heavily on USGS figures, which are unfortunately, politically biased.
This leads me to the discussion of oil reserves in general.
There are two types of estimates of reserves on Oil.
One is technical, the other is political.
When OPEC changed its quota system to a percent of reserves, reserves in OPEC doubled in two years. Those estimates are therefore political estimations.
For tax reasons, some reserves are often underestimated. In these cases, you have so called reserve growth, because the reserves were underestimated to begin with.
So, reserves, actual technical reserves, are often held very close and are most often confidential. This is not good news for planners. Planners need real data, not political data.
So what does this mean?
It means that the World does not really know how much oil there is.
But if you look at the discovery curve versus the production curve, you see that most of the oil was discovered in four peaks during the 30s, late 40s, early 60s, and late 70s.
No one, no where, has made giant discoveries in the last 20 years.
It is this discovery production curve intersection which should give anyone cause for concern.
That is why we need to unify the electric system with the transportation system.
Then, we can power our transportation appliances, be they plug in hybrids, Segways, or all- electric lithium ion vehicles with wind power and solar power.
Peak Oil will lead to the Solar/Hydrogen Age.
One way or another.
I prefer another.