Europe: Oil’s Brave New World

If you want to see the future of oil, look at Europe.

Since 1999, Europe has increased oil imports more than 20%–just slightly less than the amount consumed by Germany in 2007–to compensate for declining domestic production. In other words, Europe is running out of oil and scrambling to secure new supplies to fill the losses.


And those losses are coming more quickly than predicted, primarily in the once-prodigious oil fields of the North Sea. After peaking in 2001, production in the North Sea, Europe’s largest reserve of oil and gas, plunged. In 2006, after six years of consecutive declines, the North Sea produced nearly 2 million barrels of oil per day less than it had six years earlier, roughly equivalent to the amount France consumes annually.

Disruptions in supply are more critical to Europe than to the United States. Having already eliminated the most obvious inefficiencies that cost the least to change, Europeans will find it harder to reduce oil dependence though curbing consumption. They already drive small, fuel efficient cars and use public transportation. There’s not a Suburban in sight. European governments might reduce taxes on fuel, but that would actually increase demand for crude rather than decrease it.

Forbes