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Page added on August 16, 2010
Peak Generation: ‘cheap oil is over’ as demand approaches new record
SUNDAY, AUGUST 15, 2010
Matthew Wild
The International Energy Agency (IEA) is forecasting world oil demand will set a new record next year when is smashes through 2008’s pre-recession high – and warning that the “era of cheap oil is over.”
According to the IEA’s latest Oil Market Report, published August 11, global demand will reach 86.6 million barrels per day in 2010, and then 87.9 million barrels per day in 2011, assuming a continuing global economic recovery. This means demand is set to pass the all-time high of 86.9 million barrels per day established in 2008 before the global economic downturn.
The figure has been given significance by those that say oil peaked midway through 2008. Peak oil refers to the time of maximum production – the high point of the oil output bell chart, after which, as geologist M King Hubbert showed, output will diminish even though much oil remains to be extracted. If oil did peak at 86.9 million barrels per day, then demand would be expected to overtake supply early in 2011. (Personally, I don’t believe oil has peaked – but this will soon be put to the test.)
Another significant figure bandied around relates to oil’s mid-2008 price spike: it traded at $147 a barrel in July of that year. People that believe oil peaked will tell you this was a simple matter of supply and demand, while Opec has all along blamed speculators for pushing the prices up. Another factor, as reported at the time by Reuters, was the then tension between Israel, the US and Iran, including Iranian missile tests and rumoured Israeli air force drills in Iranian airspace that “left the oil markets worried about a potential supply disruption.”
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3 Comments on "Peak Generation: ‘cheap oil is over’ as demand approaches new record"
KenZ300 on Mon, 16th Aug 2010 9:19 pm
We must support the transition to sustainable alternative energy. Economic security and national security demand that we diversify our energy sources and produce local energy with local labor.
Wessman on Tue, 17th Aug 2010 3:37 am
It cares little if oil has peaked or not. What matters is when supply can no longer grow AS FAST as demand. Something I mean has been the case since 2003.
Regarding supply we have had two peaks in 2005 and 2008. We may have one more in 2011/12 somewhere, then we will have to see wich was the highest. Not much will differ, is my bet.
KenZ300 on Tue, 17th Aug 2010 11:27 am
High oil prices contributed the the latest recession. When oil hit $147/barrel and gasoline in the US was over $4.00 consumer transportation budgets were stretched to the breaking point. People that live pay check to pay check were suddenly paying $200 or $300 more for transportation to drive to work. That took money away from everything else and helped to sink the economy.
High oil prices will stall the world economy and take us all into a recession or worse depending on the price.
We need to transition to alternative fuels now for our economic and national security.