Anurag Jain's Blog on Bangalore Events, Travel, IIM Bangalore, IIM, IIMB, Management

Thursday, April 14, 2005

Posted 7:04 AM by Anurag

The Energy Crisis: 2005 is the top of Production bell curve!

We've been hearing about the impending Oil/Energy Doom scenario for sometime now. But here's an article that paints a particularly grim picture and puts the date on the crisis. Scary to see that the date is so close! Apparently, the peak of global oil production will be reached in 2005! Welcome to the nightmare at The Long Emergency (from the magazine Rolling Stone).

Excerpts:

# The United States passed its own oil peak -- about 11 million barrels a day -- in 1970, and since then production has dropped steadily. In 2004 it ran just above 5 million barrels a day (we get a tad more from natural-gas condensates). Yet we consume roughly 20 million barrels a day now.

# The U.S. peak in 1970 brought on a portentous change in geoeconomic power. Within a few years, foreign producers, chiefly OPEC, were setting the price of oil, and this in turn led to the oil crises of the 1970s. In response, frantic development of non-OPEC oil, especially the North Sea fields of England and Norway, essentially saved the West's ass for about two decades. Since 1999, these fields have entered depletion. Meanwhile, worldwide discovery of new oil has steadily declined to insignificant levels in 2003 and 2004.

# Some "cornucopians" claim that the Earth has something like a creamy nougat center of "abiotic" oil that will naturally replenish the great oil fields of the world. The facts speak differently. There has been no replacement whatsoever of oil already extracted from the fields of America or any other place.

# Now we are faced with the global oil-production peak. The best estimates of when this will actually happen have been somewhere between now and 2010. In 2004, however, after demand from burgeoning China and India shot up, and revelations that Shell Oil wildly misstated its reserves, and Saudi Arabia proved incapable of goosing up its production despite promises to do so, the most knowledgeable experts revised their predictions and now concur that 2005 is apt to be the year of all-time global peak production.

1 comments

Comments:

The article is mostly true. However, the world is researching and mostly moving to newer forms of energy such as Natural Gas. Additionally, alternative forms of sustainable energy (such as solar energy) as well as creative extraction of energy from existing sources (For example, harnessing methane from garbage dumps) is no longer fashionable; it is a necessity :-).

Regards
Rakesh

# posted by

Anonymous : April 20, 2005 5:31 PM