Can We Be Honest About Energy That Will Last?

Over the last several decades, the general assumption has been that enough oil could be found and produced to meet what was expected to be continuously growing demand. The relationship took on the sheen of the world’s most obnoxious economic booster, flogging the idea of growth while angrily shouting down anyone who suggested that there are limits.

That has included shouting down the growing voice that warns we will get to where demand outstrips supply. No problem, the booster would tell you, because that would drive up prices which would then reduce demand to meet supply. If oil were not the blood of the globe’s economy, that would be fine. But higher gas prices in the past have prompted recessions, and reduced demand and is a sign of an economy either stagnating or in recession. The price of oil, creeping up even as we speak, is beginning to cause worry that it might derail economic recovery
The decline of American oil production is a reminder that even the world’s blood has its limits. But there has always been another assumption – that there is enough supply to last for a long time. Just as conveniently as the supply-demand relationship suggests that demand for energy will never rise above supply, it has always been supposed that there is enough oil to last. How much? Who knows – but it’s enough to last through the immediate future, which is all anyone really cares about.

The latest Energy Information Administration report suggests that peak oil, the end of cheap and reliable energy, may be a bit closer at hand than previously believed. The report scaled back expected production from previous reports, and in 2030, expects the output of conventional fuels to be about 93.1 million barrels a day. Although that’s still higher than current production, it’s 14.1 percent lower than what previous reports have predicted.

When you consider that demand for energy – especially for transportation – is generally expected to rise, a drop in projected production should raise eyebrows. Although the report corrects a supply-demand discrepancy by projecting declining demand, that is predicated on slowed growth in India and China (combined, those countries are soon expected to surpass the United States as the world’s chief consumer of liquid energy). When those two countries recover from the global recession, which could happen this year or next, it could eventually prompt cut-throat energy competition.

Nort Star Writers