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| When will oil peak? |
HomepageSam Wilberforce
With BP annnouncing massive oil finds in the gulf of Mexico, and with a government committee, chaired by Malcolm Wicks, assuring us that oil has many more decades to come, we might feel reassured – about as reassured as we were two years ago when told that high risk derivatives and hedge funds formed a stable basis for our ever growing economy.
However last year several major companies in the UK commissioned a working group, UK Industry Taskforce on Peak Oil and Energy Security (ITPOES) to look at the risks of oil running out. They came to the conclusion that with hugely increasing demand from major developing countries like China and India, the increasing difficulty of getting cheap oil (the new fields are deeper than any before, and in deep water) and the massive investment needed to exploit the remaining reserves (of the order to trillions of dollars) that oil supply would peak in 2013 and then rapidly be overtaken by demand. Prices of oil would surge above $200 /barrel. This has been put off a couple of years by the recession.
As Lord Oxburgh, a former chairman of Shell, said “Today’s high prices are sending a message to the world that words alone have failed to convey, namely that not only are we leaving the era of cheap energy but that we have to wean ourselves off fossil fuels. For once what is right is also what is expedient - we know that we have to stop burning fossil fuels because of the irreversible environmental damage they cause, and now it may be cheaper to do so as well! The problem is that in the developed world our power and transport infrastructure is based almost entirely on fossil fuels. With the best will and the best technology in the world this will take decades to change.”
Peak Oil – how big is the risk?
Some interesting articles:
“Oil still has us over a barrel”
“Do not discount the threat of peak oil” ( you have to register with FT but it is free)
Peak Oil task force Full report ( first 7 pages summarise the report)
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