odac-info.org
Complacency and the Threat of Diminishing Oil Reserves
Oil companies have created a "false sense of security" about future oil supplies, according to a report from Mellon Global Investments. The industry's "healthy supply projections are likely to be proven to be overly ambitious," it says, "meaning that supplies could fall well short of the world’s future demand for oil." Noting that the industry has not replaced production with new discoveries since the early 1980s and the majority of large, higher quality fields have now been found, the report warns that, even with much improved technology, the amount of useable oil found each year is decreasing while global demand is "increasing alarmingly". Consequently, "increasing investment in exploration will not result in appreciable new supplies", as some have suggested. The report also claims that new technologies have already improved extraction rates so much that there is little room left for major increases in ultimate recovery. "With technology unable to solve the problem of diminishing oil supplies, we must seek realistic alternatives to balance energy supply with consumer demand", the report concludes. "Weaning global consumers from their false sense of security will require bold action, most probably in the form of much more restrictive conservation measures (i.e. ever stricter fuel efficiency standards), and fiscal stimuli needed to accelerate the implementation of alternate energy technologies." Otherwise, we could soon face "an unprecedented 'Super Price Spike', with potentially devastating economic disruptions."
[Posted 24 February 2005] |
