Home | Business News | Browse by Publication | W | World Watch

Global oil production about to peak? A recurring myth.

Article Excerpt
Once again, we are hearing that world oil production is "peaking," and that we will face a steadily diminishing oil supply to fuel the global economy. These concerns have been expressed periodically over the years, but have always been at odds with energy and economic realities. Such is the case today.

Let's look at some history: In 1874, the chief geologist of Pennsylvania predicted we would run out of oil in four years--just using it for kerosene. Thirty years ago, groups such as the Club of Rome predicted an end of oil long before the current day. These forecasts were wrong because, nearly every year, we have found more oil than we have used, and oil reserves have continued to grow.

The world consumes approximately 80 million barrels of oil a day. By 2030, world oil demand is estimated to grow about 50 percent, to 121 million barrels a day, even allowing for significant improvements in energy efficiency. The International Energy Agency says there are sufficient oil resources to meet demand for at least the next 30 years.

The key factor here is technology. Revolutionary advances in technology in recent years have dramatically increased the ability of companies to find and extract oil--and, of particular importance, recover more oil from existing reservoirs. Rather than production peaking, existing fields are yielding markedly more oil than in the...