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     Ferris_von_bueller |
The Independent UK Warning: Oil supplies are running out fast Catastrophic shortfalls threaten economic recovery, says world's top energy economist By Steve Connor, Science Editor Monday, 3 August 2009 The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned. Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries. Related articles * Jeremy Leggett: Another crunch is coming but will the world act? In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years at least a decade earlier than most governments had estimated. But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said. In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil mostly in the Middle East would increase rapidly as the oil crisis begins to grip after 2010. "One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said. "The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said. There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields. The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong. "If we see a tightness of the markets, people in the street will see it in terms of higher prices, much higher than we see now. It will have an impact on the economy, definitely, especially if we see this tightness in the markets in the next few years," Dr Birol said. "It will be especially important because the global economy will still be very fragile, very vulnerable. Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices," he told The Independent. In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply. Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned. In most fields, oil production has now peaked, which means that other sources of supply have to be found to meet existing demand. Even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030, Dr Birol said. "It's a big challenge in terms of the geology, in terms of the investment and in terms of the geopolitics. So this is a big risk and it's mainly because of the rates of the declining oil fields," he said. "Many governments now are more and more aware that at least the day of cheap and easy oil is over... [however] I'm not very optimistic about governments being aware of the difficulties we may face in the oil supply," he said. Environmentalists fear that as supplies of conventional oil run out, governments will be forced to exploit even dirtier alternatives, such as the massive reserves of tar sands in Alberta, Canada, which would be immensely damaging to the environment because of the amount of energy needed to recover a barrel of tar-sand oil compared to the energy needed to collect the same amount of crude oil. "Just because oil is running out faster than we have collectively assumed, does not mean the pressure is off on climate change," said Jeremy Leggett, a former oil-industry consultant and now a green entrepreneur with Solar Century. "Shell and others want to turn to tar, and extract oil from coal. But these are very carbon-intensive processes, and will deepen the climate problem," Dr Leggett said. "What we need to do is accelerate the mobilisation of renewables, energy efficiency and alternative transport. "We have to do this for global warming reasons anyway, but the imminent energy crisis redoubles the imperative," he said. Oil: An unclear future *Why is oil so important as an energy source? Crude oil has been critical for economic development and the smooth functioning of almost every aspect of society. Agriculture and food production is heavily dependent on oil for fuel and fertilisers. In the US, for instance, it takes the direct and indirect use of about six barrels of oil to raise one beef steer. It is the basis of most transport systems. Oil is also crucial to the drugs and chemicals industries and is a strategic asset for the military. *How are oil reserves estimated? The amount of oil recoverable is always going to be an assessment subject to the vagaries of economics which determines the price of the oil and whether it is worth the costs of pumping it out and technology, which determines how easy it is to discover and recover. Probable reserves have a better than 50 per cent chance of getting oil out. Possible reserves have less than 50 per cent chance. *Why is there such disagreement over oil reserves? All numbers tend to be informed estimates. Different experts make different assumptions so it is under- standable that they can come to different conclusions. Some countries see the size of their oilfields as a national security issue and do not want to provide accurate information. Another problem concerns how fast oil production is declining in fields that are past their peak production. The rate of decline can vary from field to field and this affects calculations on the size of the reserves. A further factor is the expected size of future demand for oil. *What is "peak oil" and when will it be reached? This is the point when the maximum rate at which oil is extracted reaches a peak because of technical and geological constraints, with global production going into decline from then on. The UK Government, along with many other governments, has believed that peak oil will not occur until well into the 21st Century, at least not until after 2030. The International Energy Agency believes peak oil will come perhaps by 2020. But it also believes that we are heading for an even earlier "oil crunch" because demand after 2010 is likely to exceed dwindling supplies. *With global warming, why should we be worried about peak oil? There are large reserves of non-conventional oil, such as the tar sands of Canada. But this oil is dirty and will produce vast amounts of carbon dioxide which will make a nonsense of any climate change agreement. Another problem concerns how fast oil production is declining in fields that are past their peak production. The rate of decline can vary from field to field and this affects calculations on the size of the reserves. If we are not adequately prepared for peak oil, global warming could become far worse than expected. | ||
| Toona |
Fear Mongering. "mysteriously" supplies get real low or a refinery goes "off line" every time the price gets low. Low supply ( << artificially made) and high demand drive the price back up. Oil speculators don't help things either. | ||
| Just_ziptab |
What bugs me is the epidemic of 4x4,four door pickups in this area..............with ONE person in it on a work commute. There are several at the plant I work at everyday.........all"higher up brass",of course. I swear,50% of the vehicles I see on my work commute and around town are trucks and most of them are extended or 4 doors.Obviously,fuel is too cheap and wages are too high with disposable income to have wanton waste of oil/resources. Yes,I drive an extended truck,4.3 V6 S-10 and get 26 to 28 mpg most all the time with simple driving habits. Traded my 15 mpg Tahoe for it and never looked back..........that was 11 years ago when gas was 97 cents a gallon and it just didn't make sense to drive a hog for the commute. Too bad gas isn't priced by GVW.............of course with commercial being exempt. I don't get it,I just don't get it with people wasting oil for no logical reason. I guess I'm too conservative..........:-( | ||
| Froggy |
Zip, I support letting people drive what they want, yet I do what I can to minimize my fuel consumption. 35mpg+ in my 3.4L Monte Carlo, 65mpg on my 06 XB12, and soon to be 70mpg+ on my Blast and 50mpg on my 1125CR once I learn those. | ||
| Just_ziptab |
"Zip, I support letting people drive what they want" ......I do too,but being stupid just doesn't get it for me. Sure 4x4 ,four door truck......if you are using it for it's intended purpose. 04 XB12R,65 mpg too! Too bad my Honda wasn't such a buzz bomb at highway speeds for the commute........85 mpg! | ||
| Cityxslicker |
fear monging... remember that the monkeys making and reporting the 'news' are MEAT. | ||
| Ducbsa |
We heard the same poop in 1973. | ||
| Swordsman |
Damn, the media just can't be happy without SOME "new" catastrophe on the horizon, can they? Sounds to me like a rehashing of 20 year old news. Sorry, not impressed. Now, tell me a giant asteroid is on a collision course with Antarctica, and maybe I can spare some concern. ~SM | ||
| Hdbobwithabuell |
"I do too,but being stupid just doesn't get it for me" It's very dangerous when we start deciding that other's action's are "stupid". This concept could be taken a bit further where going for a "joy ride", even at 65 MPG could be considered "stupid" (wasting gas for fun? How dare you!) | ||
| Cudajohn |
What??? That's stupid! lol. J/k. | ||
| Crackhead |
zip just call them soccer moms of the new "minivan" and watch the useless 4x4 drivers get pissed off. I own a 4x4 but get gets shown Subaru love regularity. And with 28mpg average it is twice the mpg compared to the new age minivans | ||
| 2008xb12scg |
If we run out of oil, we grow more corn and put that in the cars. Oh, wait, that would mean we need farmers again... | ||
| Cudajohn |
No need for farmers, just build machines! .......but what happens when the corn machines want sovereignty and the stage an uprising! | ||
| Just_ziptab |
My carbon footprint is a ghost of an image to most other users.I'm saying it's stupid to drive a 4 door pickup as a single passenger commute vehicle. When I'm in a nursing home,cold and miserable with my balls shriveled to a pair of peanuts cause the thermostat is set to 45 degrees in the winter.....I'll laugh to my grave as those previous wanton wasters drive mopeds to work in the dead of winter because they pissed away all the oil and the moped is the only accepted/affordable form of transportation........conservation is the key till somebody invents the magic bullet to it all............or we'll shutter ourselves back to the stone age. | ||
| Unibear12r |
They just "discovered" another oil field here. It's possible it may double the amount of oil here in Kern county. Again. Second time in like 10 years. When they get done with that they can strip mine for oil shale and oil sand for years. | ||
| Rpm4x4 |
Just a thought. If oil was really becoming hard to find, would'nt big oil be investing heavily in alternative fuels? Do you really think they are going to just close up shop and go away when oil is gone? They will be the distributer of the next big thing also because they have the money to do so and the distribution system already in place. We are not doomed. It just means things will change. Mabey for the better, only time will tell. | ||
| Swordsman |
ANNNND we won't simply wake up one day with no oil. There will be a gradual dwindling, which will be reflected in ever climbing prices as it gets harder to come by. As the prices climb, more and more people will be forced to ween themselves from it. There will be a natural progression, not some cataclysmic economic meltdown. ~SM | ||
| Froggy |
Yes, they are. They want to have a vice grip on the next oil. | ||
| Road_thing |
The Swordsman gets it... rt | ||
| Hootowl |
Grow more corn? It takes a gallon of diesel to produce 1.2 gallons of ethanol from corn. The 1 gallon of diesel has more energy than the 1.2 gallons of ethanol. Corn based ethanol is a joke, and we're the punchline. | ||
| Sifo |
Grow more corn? It takes a gallon of diesel to produce 1.2 gallons of ethanol from corn. The 1 gallon of diesel has more energy than the 1.2 gallons of ethanol. Corn based ethanol is a joke, and we're the punchline. To borrow a line from the Cash 4 Clunkers thread... Ethanol as a fuel has been a great success. You can hardly find a gas station that does not use ethanol in the fuel! I knew (passed away a couple months ago) a high level executive at United Oil Products. They engineer pipelines, wells and what not for the oil industry. They had no concerns about running out of oil any time soon. I didn't notice the last paragraph in the OP until now... There are large reserves of non-conventional oil, such as the tar sands of Canada. But this oil is dirty and will produce vast amounts of carbon dioxide which will make a nonsense of any climate change agreement. I knew this oil was rich in sulfur (which can be dealt with quite easily), but higher CO2 content? Isn't CO2 the stuff the fuel is made of? Does that also mean more energy per barrel? I've got to go with scare mongering. Back in the early 70's we were told we would run out of oil in less than 20 years. It was scare mongering back then. The scare mongering has never stopped. P.S. We were also told that we were causing an ice age from burning oil back then. More recently it became global warming to fit the facts of the world. Now that warming has taken a breather they are going to a more universal "climate change". We have been told that a colder climate will destroy the world. We have been told that a warmer climate will destroy the world. Apparently we live in a Goldilocks climate that must be maintained for all eternity or we will all perish. I'm not clear how the world survived climate changes up to now. It must be a divine miracle! | ||
| Blake |
The trick is to convert wind, solar, or coal energy, not diesel into ethanol. | ||
| Swordsman |
AND stop using corn for ethanol. It simply doesn't convert well. The only reason it's being used in the first place is because of the surplus we produce. Gotta cram all that corn somewhere! ~SM | ||
| Slaughter |
YOU'RE ALL WRONG. The trick is to IMPROVE EFFICIENCY - regardless of energy source. | ||
| Sifo |
Gotta cram all that corn somewhere! It would be kind of silly to use it as a cheap food source. | ||
| Buelleaver |
Sounds like liberal truck bashing to me. try towing a boat or getting some real work done with an s-10 | ||
| Froggy |
The fact that nobody mentions is that the corn used in ethanol isn't even edible. Ethanol can be made from just about anything including algae, sugar cane, waste beer, dead bodies and so on. | ||
| Slaughter |
Gotta cram all that corn somewhere OK - am I the FIRST one here to make the suggestion of just WHERE they should cram all those corn cobs? (Message edited by slaughter on August 04, 2009) | ||
| Swordsman |
"It would be kind of silly to use it as a cheap food source." LOL, looked at any ingredients labels lately? I'd be impressed if you could find something that didn't have corn in some form or another. ~SM | ||
| Sifo |
The fact that nobody mentions is that the corn used in ethanol isn't even edible. No it's not the sweet corn that you put on the dinner table, but it is used to make corn flour and other corn products. It is also used as animal feed to grow other sources of food. LOL, looked at any ingredients labels lately? I'd be impressed if you could find something that didn't have corn in some form or another. You are absolutely correct! And the price of all of those things are higher because of the fact that we are running our cars and motorcycles on food. This also raised the price on beef and chicken as well. |
