Peak Oil Overview – July 2009

Most people who have read a little about peak oil have heard that US oil production peaked in 1970. This happened, even though oil companies have been working as hard as they can to keep production up. Oil companies have even applied enhanced oil recovery techniques to wells where it looked like doing so would be profitable. After the US mainland (48 states) peaked in 1970, extra effort was expended to ramp up Alaskan production. It soon peaked as well, in 1988.

The question now is with respect to world production. The price of oil isn’t very high–is there any possibility of a near-term peak in world oil production? Lower prices would seem to suggest there is no problem.

It seems to me that if we look closely at the situation, world oil production has likely peaked, even though prices are not behaving as most had expected. Furthermore, the peaking of world oil production seems to be a major cause of the current financial crisis. The tie of peak oil to recent demand destruction points to a possible continuing destruction in demand in the years ahead, with oil prices fluctuating, but not necessarily rising to great heights.

The Oil Drum