The Outlook on Oil

[bpilgrim]

Some Experts Worry That Production Will Soon Peak. Others Warn ThatIt Already Has.
by Jim Motavalli
http://www.emagazine.com/view/?3004

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The Great Debate

We�ve reached a dramatic crossroads, with highly credentialed experts coming to diametrically opposite conclusions about the future of the world�s oil supply. With consumers paying $2.50 or more for a gallon of gasoline at the same time ExxonMobil and other oil producers are raking in the largest corporate profits in history, we�re at least finally paying attention. So are we being manipulated by greedy oil companies, or is the shortage very real, demanding an abrupt about-face after more than 100 years of heavy reliance on a constant supply of relatively inexpensive oil?

Unfortunately, the more you talk to experts and immerse yourself in technical data about R/P ratios and constant decline rates, the more confused you become. Unlike the debate over climate change, which the skeptics lost long ago, the war of words over peak oil is still very much raging, with solid science on both sides.

But one conclusion is irrefutable: The age of cheap oil is definitely over, and even as our appetite for it seems insatiable (with world demand likely to grow 50 percent by 2025), petroleum itself will end up downsizing. And it�s unlikely that the high oil prices of 2005 will be a bubble, as was the 1970s fallout from the Arab oil embargo. Today, not only is oil getting harder to find in economically exploitable form, but the use of what remains is contra-indicated by the hard reality of global warming. Even if we had ample oil, in the long run we�d need to switch to renewables, anyway.

When will oil peak? A growing body of oil company geologists, oil executives, and investment bankers, including the influential American geologist L.F. Ivanhoe, see it happening by 2010. The Department of Energy (DOE) has given various estimates, ranging from 2016 to 2037. But many oil companies are skeptical it will ever happen, putting faith in higher prices and new technology (including horizontal drilling and 4-D exploration) spurring ever more productive exploration. Exploration will have to be very productive indeed to keep up with world demand, which the Defense Department�s Energy Information Administration (EIA) believes will grow from 78 million barrels per day in 2002 to 118 million barrels in 2025.

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http://www.emagazine.com/view/?3004

peace

[bemildred]

1. Oil will peak when the human race is wiped out by global warming.

Thus reducing demand.

[Clara T]

2. We are past peak oil

This will be duly noted through the lens of hindsight. Unlike oil the natural gas decline, which is nearing acritical point worldwide, will not be as gently sloped. So much of the world's economy is tied to these two commodities and in ways that are labyrinthine. As the crush becomes more severe people are going to be left to grasp at straws for explanations.