Peak in Global Oil Production
By Douglas Low, Scotland
Al-Jazeerah, February 3, 2005
aljazeerah.info
I do not understand why anyone can believe that global oil production will not peak (‘Peak Oil’) for another 10 years — never mind 30 years. And yet, so many do. I would like to call such people ‘theorists’, because they are not basing their opinions on facts and current trends. On the contrary, they rarely say explicitly where the new oil is going to come from to continually increase supplies — and we will need a lot of it.
The plain truth of the matter is that most oil producing countries have peaked in oil production already and their output is declining, although till now these have been mainly the smaller producers.
The USA is the third largest producer of oil and it peaked in 1970. The UK and Norway peaked in 1999/2000. China and Mexico (5th and 6th largest) are both expected to peak soon, if they have not already. Russia, which produces about as much oil as Saudi Arabia, (they are by far the two biggest producers) announced last year that it expects production to peak no later than 2007.
And then there is Saudi Arabia. It announces categorically that its production will rise for another 30 years at least. Unfortunately, an increasing number of oil experts both inside (retired employees) and outside of Saudi Arabia are now suggesting that the prospects for substantially increased Saudi production are dim and it will struggle to exceed current levels on a sustainable basis.
What does all this mean, more and more countries' oil production peaking then declining?
According to the Association for the Study of Peak Oil, a loose network of scientists who study the subject, it means that global oil production will likely peak within the next couple of years. There quite simply are not enough new big oil projects coming on stream any more to replace the old oil fields that are running low. It takes an average of 6 years from finding new oil to pumping it out, and the known new fields are not kept secret. In 2000, there were 16 major discoveries; in 2001 - eight; 2002 - three; and in 2003 - zero.
Moreover, total new discoveries have been steadily declining for 40 years, and world consumption has outpaced new-found reserves for nearly a quarter of a century. We now use more than four barrels of oil for every new one we discover. The writing is on the wall.
It is no coincidence that oil prices are currently high, and up and down like a yo-yo. It is a sure sign that global oil supplies are tight, and that we are very close to the crossover point where oil demand outstrips oil supply.
There are two conditions that virtually guarantee this crossover will happen soon - the physical limits of production growth (‘Peak Oil’ as described above), and the continuing rise in demand from China and India in particular, with their huge populations and fast-paced industrialisation, and from elsewhere too. As a result, we should soon expect to see even more rapidly escalating oil prices. This could easily bring on hyper inflation and high interest rates, as it did after the Iranian oil crisis of 1979.
With both the USA and the UK in debt up to their eyeballs funding property booms, there is mounting concern that we are in grave danger of bringing on "the mother of all depressions" and repeating the Crash of '29. If so, ironically, the price of oil will certainly drop again, but only until the next crossover — a vicious, destructive cycle that will repeat itself until we learn to use a lot less oil and adopt more sustainable energy systems.
Depletion Scotland is holding a one-day conference on global oil depletion in Edinburgh on April 25, 2005. Visit depletion-scotland.org.uk for further information.
Douglas Low has written this article in response to the Wendy Campell article, "The Secret Relationship Between Israel and Oil: What the US Media Hides." (Al-Jazeerah, October 6, 2004).
Douglas Low, Depletion, Scotland |
