Reaching our peak oil supply

The IEA forecasts world oil supply at 116 million barrels a day by 2030, up from 85 million barrels a day now – enough to meet expected demand. Some top oil company CEOs disagree. Christophe de Margerie, chief of the French oil giant Total, said in late October that a supply level of even 100 million barrels a day – barely enough to cover anticipated growth from China and India alone – is “optimistic.”

“It is not my view. It is the industry view, or the view of those who like to speak clearly, honestly and not … just try to please people,” Mr. de Margerie said.
And ConocoPhilips CEO James Mulva told a financial conference earlier this month: “Demand will be going up, but it will be constrained by supply. I don’t think we are going to see the supply going over 100 million barrels a day, and the reason is: Where is all that going to come from?”

That’s the question adherents to peak-oil theory ask. They argue that the world either has or soon will have reached the maximum output level of its oil reserves and that supply can only decline from here on out – even as demand skyrockets.

Though some dismiss them as crude-oil Cassandras, the peak-oilers are not wild-eyed pessimists. Their number includes men like T. Boone Pickens, the Dallas oil tycoon, and Houston’s Matt Simmons, who founded the world’s largest energy investment banking company. They point to hard data indicating that the world is quite simply running out of oil and doing so quickly (www.theoildrum.com and www.energybulletin.net are two good Web sites compiling peak-oil news, analysis and information).

If they’re right, peak oil poses a far more critical challenge to our civilization than global warming. The modern industrial world cannot function in any recognizable form without cheap and plentiful oil. Stu Hart, a Cornell management professor, warned on public radio recently that “we’re in the midst of the crash of the system” – meaning that absent breakthroughs in the way the world meets its energy needs, we are in for rough times.

Dallas News