Oil is a resource in finite supply; no major oil fields have been found since 1976, and experts suspect that there are no more to find. Some analysts argue that world production is already at or near its peak, although most say that technological progress, which allows the further exploitation of known sources like the Canadian tar sands, will allow output to rise for another decade or two. But the date of the physical peak in production isn't the really crucial question.
The question, instead, is when the trend in oil prices will turn decisively upward. That upward turn is inevitable as a growing world economy confronts a resource in limited supply. But when will it happen? Maybe it already has.
I know, of course, that such predictions have been made before, during the energy crisis of the 1970's. But the end of that crisis has been widely misunderstood: prices went down not because the world found new sources of oil, but because it found ways to make do with less.
http://www.fromthewilderness.com/free/ww3/050704_NYT_op_ed.html
At 10:39 am -0700 28/6/04, Dwayne Monroe wrote:
Now the theory this Wiki author describes is rather modest - focused on the specific prospects for U.S. domestic oil production. The more broadly targeted theory now known as 'peak oil', which claims the world as its model, is less successful - to date.
So here's where the confusion apparently lies - as the Wiki author crisply describes, it works very well for predicting the North American situation because we have a solid idea of where the reserves are and how much crude remains. But it runs into trouble when applied to the planet as a whole because we can't be certain we've found all the major petroleum reserve sites.
IIRC, Deffeyes argument is that the geology of petroleum is well established science and he suggests that if there are any unknown major reserves, the only likely place is the S China Sea. His guestimates are subject to this assumption.
As for the industry's interest in arguing depletion for tax breaks and fewer regulations, there's also the interest -- recently exhibited by Shell -- to exaggerate reserves in the interest of stock prices and what-not. It doesn't all go just one way, although the interest to downplay is probably much greater than the interest to hype it up.
But leaving aside the technicalities, my original question was whether the policy people buy this. Is there any evidence of this, any scenario building they have done as with global warming, or a coming war with China? And, if indeed, the only likely unknown reserves are in the S China Sea, what then can we expect to see re the global geo-politics of this region, other than what we already see in terms of intra-regional competition over the tiny pieces of rock dotting the place?
None of this has to be malthusian. Indeed, that may be a misapplied label: petroleum, unlike say, human beings or food output, is not humanly produced, subject to fairly rapid shifts. Sure, there can be substitutes for petroleum -- but if indeed we are looking at peak oil, with neither China nor India anywhere near their potential demand, then it would also seem evident that, with the exception of nuclear, there is no feasible technology in sight that can kick in sufficiently rapidly. What then would be the socio-political consequences, both intra- and inter-country? Also, isn't one of the peak-oil analyses not that there will be a sustained rise in prices in the near- to medium-term, but of oscillations -- which, going by what happens even in the relative short-term of financial crises, can wreck considerable havoc?
kj khoo