Plateau

Non-OPEC production of crude oil seems to have stalled, promising even higher prices at the pump.

The theory of peak oil holds that at some point


The obstacles to increased production are many: Drilling costs have climbed. Trained workers are scarce. Production from older fields in the North Sea and Alaska is at 40 percent to 60 percent below their peaks. Most of the world’s oil reserves are controlled by national oil companies and are out of the multinationals’ reach.

Mexico’s national oil company, Pemex, is incapable of developing new fields, but most Mexicans oppose any foreign investment in Mexico’s energy sector. In Venezuela, President Chavez has made a hash of his country’s oil industry, nationalizing some assets and mismanaging others.

The challenge for the multinationals can be seen in Exxon Mobil’s latest production figures. Despite the incentive of oil selling for more than $100 a barrel, the company’s production of crude fell sharply, sparking a tumble in its stock price. If the world’s largest private oil company can’t maintain, much less expand, its production in a climate of growing demand and high prices, the world is almost certainly courting a production shortfall in the arena that has been a consistent source of growth.

Houston Chronicle