“By 2012, surplus (global) oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 MBD (million barrels per day). United States Joint Forces Command document. (p.29)
The bad news: “Fossil fuels will very likely remain the predominate energy source going forward.”
Warnings of significant oil shortages developing over the next five years are growing more urgent. Last year I wrote that an oil shortage depends on the strength of the economy. The stronger the economy, the sooner the crisis, since a recovery depends on a greater use of petroleum. Add to that a lack of investment and no drilling for new oil, then demand will soon overwhelm supply. Thus very high prices and significant shortages.
The result: an economic, social and political crisis much worse than our current situation.
From The Wall Street Journal, Feb. 11, 2010, The Next Crisis: Prepare for Peak Oil:
“A shortage of oil could be a real problem for the world within a fairly short period of time.” And, although the slowdown in the global economy has delayed the oil crisis ” by a couple of years, peak oil – the point at which global production reaches its maximum – is no more than five years away.”
In the Industry Task Force on Peak Oil and Energy Security report:
“It is pretty clear that there is not much chance of finding any significant quantity of new cheap oil. Any new or unconventional oil is going to be expensive.”
“The latest report from the Task Force points out how much modern economies depend on oil, whether for transport, heating or fertilizer. Demand may have peaked in the developed world but any shrinkage there, is likely to be more than outweighed by the developing countries, with their rapidly expanding appetite for energy to fuel industry needs and consumer aspirations.”
These countries include China, India and Brazil. They are a big part of the 2.1 billion people that will be added to the earth’s population by 2050. Their citizens are demanding the same lifestyles as the developed world; meat protein, vehicles, homes, electronics, etc. All of these items require petroleum. It is used to make fertilizer to grow the grain to feed the livestock that feeds the people. It also heats the homes, powers vehicles, is used in the manufacture of computers and 6000 other products, including medical devices and medicines. And there are no substitutes.
“The globe now has more than 1 billion vehicles and some expect it to hit the 2 billion mark within 20 years.” This is a big factor that no one has considered. That’s why 20 years from now all of the things that can go wrong will, creating the perfect storm, according to Britain’s top scientist.
A number of companies and governments are concerned, not only about too many people but the coming shortage of water, food and certainly oil. Sir Richard Branson, founder of the Virgin Group warned “ministers this week (7 Feb. 2010) that the world is running out of oil and faces an oil crunch within five years.”
Other British executives who…support the warning include Ian Marchant, chief executive of Scottish and Southern Energy Group, and Brian Souter, chief executive of transport operator Stagecoach.
“The question of peak oil came to centre stage last November when a whistleblower told the Guardian the figures provided by the IEA (International Energy Agency) – and used by the UK and US governments for much of their planning scenarios – were inaccurate.
“The IEA in 2005 was predicting that oil supplies could rise as high as 120m barrels a day by 2030, although it was forced to reduce this gradually to 116m and then 105m last year.” (IEA source). The 120m figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this.”
However, the U.S. Joint Forces Command (Feb.18, 2010), has another set of numbers:
“During the next twenty-five years, coal, oil, and natural gas will remain indispensable to meet energy requirements. The discovery rate for new petroleum and gas fields over the past two decades (with the possible exception of Brazil) provides little reason for optimism that future efforts will find major new fields.
“At present, investment in oil production is only beginning to pick up, with the result that production could reach a prolonged plateau. By 2030, the world will require production of 118 MBD, but energy producers may only be producing 100MBD unless there are major changes in current investment and drilling capacity.”
News about GCC Gulf Oil Producers:
Gulf Cooperation Council members Bahrain, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates (UAE) are experiencing an “increasing gas shortage in the region..” One of the main reasons is the growing demand for gas and electricity, predicted to rise 50 percent by 2030.
Another reason is that all of these oil producing nations have to deal with depleting oil fields. That means the easy oil has been taken and they need the gas in enhanced oil recovery.
“Depleting oil fields, where natural gas is used for re-injection to maintain reservoir pressure and oil production capacity, are another major source of gas consumption in the GCC. GCC countries currently manage their gas shortage by reducing gas re-injection and directing gas to end consumers.
“As OPEC oil production has waned, so has the region’s gas production, and new sources of non-associated gas are proving difficult to locate. Moreover, as the GCC gas markets are highly subsidized, some countries are finding it difficult to attract and retain IOCs [International Oil Companies] for gas exploration and development activities.” 06/16/2010
As I said before, there are a number of variables that can affect how serious the problem of resource shortages will be globally but the evidence is certainly clear that a problem does exist. For example, with 100 million more people in the United States in less than 30 years (2008 U.S. Census Bureau News), most of them from south of our border, do you think that might hurt America in its plan to be energy independent?
Since our government hasn’t shown much in the way of solutions, individuals should pay attention to events over the next few years and use the time to develop a personal plan.
We have never been here before and I am confident that our leaders will screw it up, as usual. But this time there is no do over.
Latest Oil Forecast: World Oil Demand to Rise 1.6% in 2011, IEA Says, 07/13/10.