Report: 'World at peak oil output' - CNN.com
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LONDON, England (CNN) -- The world has reached the point of maximum oil output and production levels will halve by 2030 -- a situation that will eventually lead to war and disaster, a report claims.
The German-based Energy Watch Group released a report Tuesday saying the
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world's oil production peaked in 2006 and from now on will drop by around 3 percent a year.
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It says that by as early as 2030, the global availability of oil will be half of what it was at its peak.
"It's a very serious result," said Hans-Josef Fell, a German lawmaker from the environmentalist Green Party who commissioned the report. "I fear the world will come into a big economic crisis in the coming years."
The report warns that coal, uranium, and other key fossil fuels are also in declining supply. It predicts the fall in fossil fuel production will bring with it the threat of war, humanitarian disaster, and general social unrest.
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But Leo Drollas, who leads oil and gas market analysis and forecasting at the Center for Global Energy Studies in London, said there are plenty of supplies and no looming crisis. He said the report sounds like "scaremongering."
Drollas says production could still slow one day, but only because new reserves will be considered too difficult or expensive to extract.
"Oil could be left in the ground and we could move on to another fuel in the future, not because we're running out of oil but because, economically speaking, it is not worth extracting the oil," Drollas said.
...... Analysts do agree, however, that oil prices could continue to rise, especially if there is further instability .....
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I posted this excerpt to point out that both sides are saying almost exactly the same thing. The only real difference is the spin being applied. Peak oil does not mean the end of oil, only the point at which production reaches its maximum high point. Both sides of the issue agree that there will still be large quantities of oil remaining in the ground for the foreseeable future. When Drollas describes oil becoming so expensive or difficult to extract that it becomes uneconomical, he is unintentionally making the peak oil argument.
Peak oil will not likely be a dramatic event. In fact, it probably will not even be evident until a year or more after it takes place. Oil production normally fluctuates on a short term basis due to numerous factors (price, weather, new fields coming on line, geopolitical influences, etc.). Production figures have to be averaged out over a period of several months or a few years to determine the overall trend. To date, the high point of world petroleum production took place in late 2005 or early 2006.
My reading supports a peak of oil production between 2006 and 2020, with it likely taking place earlier rather than later. However, even if the peak is later there will be difficult times, because demand is climbing much faster than production. As an analogy, if your income is increasing by $5 a month, but your expenses are growing by $10 a month - you are effectively going downhill. When your income is no longer going up but your expenses are still climbing, that is when you will really feel peak income.
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