Plotting the coming oil shock

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Peak Generation

A study based on the Hubbert model of peak oil suggests a coming global oil shock may begin as early as 2014 – which ties in with the timeline suggested in a variety of other reports and statements.

Peak oil, the concept that geological constraints dictate a time must come when oil production reaches its natural limit, makes it clear a diminishing supply will soon be on a collision course with soaring demand. Despite getting a showing online, and in the occasional business report, it’s yet to break into the mainstream media.

I recently considered three major energy reports published so far in 2010 which take a number of different views on the issue:
• The Oil Crunch: a Wake-up Call for the UK Economy (published by UK Industry Taskforce on Peak Oil & Energy Security in February) that suggests oil is currently at or near peak and so output “cannot rise significantly above 92 million barrels per day;”
• The Joint Operating Environment 2010 (United States Joint Forces Command, published a little later in February), stating the world has vast reserves but has not invested enough to keep increasing supplies;
• Sustainable Energy Security: Strategic Risks and Opportunities for Business (published by insurers Lloyds with Chatham House, June), which manages to take both sides, stating: “Even before we reach peak oil, we could witness an oil supply crunch because of increased Asian demand.”

Three independent reports, one consistent prediction – the world will be entering into a period of oil supply turmoil sometime between the beginning of 2011 or 2013. These findings are based on subtlety different assumptions about oil production: it’s at peak, it’s underinvested, or that both are true. (There’s more about this in my original post, of course.)

Read more, plus graphs and links at Peak Generation