Five years ago, some oil market speculators became convinced that the world was nearing the limits of oil production. Sometime soon -- the 2010s? the 2020s? -- oil production would begin a long steady decline.
Think again. World oil production continues to rise. Leading the oil renaissance: the United States. The International Energy Agency predicts that the United States will overtake Saudi Arabia and Russia to become (again!) the world's leading oil producer by 2017. If the agency's estimates prove correct, the United States and Canada together will become net energy exporters by about 2030, and the U.S., which uses 20% of the world's energy, will achieve energy self-sufficiency by the mid-2030s.
Predictions that the world would imminently "run out of oil" have been worrying oil consumers since at least the 1920s. They always prove wrong, for reasons explained by the great oil economist M.A. Adelman after the last "oil shortage" in the 1970s:
Oil reserves, Adelman writes, "are no gift of nature. They (are) a growth of knowledge, paid for by heavy investment."
For all practical purposes, the world's supply of oil is not finite. It is more like a supermarket's supply of canned tomatoes. At any given moment, there may be a dozen cases in the store, but that inventory is constantly being replenished with the money the customers pay for the cans they remove, and the more tomatoes that customers buy, the bigger an inventory the store will carry.
~~~~~~~~~~~~~~
Meanwhile, the International Energy Agency is warning oil markets to ready themselves for a "flood" of cheap oil from Iraq. Last year, Iraq for the first time exceeded pre-1990 oil production. The agency expects Iraq eventually to overtake Russia as the world's second-largest oil exporter.
In 1972, the year of the famous "Limits to Growth" report by the Club of Rome, the world produced about 55 million barrels of oil per day. In 2011, the world produced almost 80 million barrels. If today's prices hold, many experts expect production of 90 million barrels by decade's end.
There will always be Peak Oil kooks as long as there is oil production. They just extend their timelines when their previous proclamations are discredited. They work off the same template that the Global Warming alarmists use.
Quote: Frank Cannon wrote in post #2There will always be Peak Oil kooks as long as there is oil production. They just extend their timelines when their previous proclamations are discredited. They work off the same template that the Global Warming alarmists use.
You are so right. Even on The Oil Drum they used to harp on peak oil, and they're the so called experts.
RIGHT'S RIGHT 
Print view
Mon Mar 04, 2013 7:08 pm
reply
