DEMAND, NOT SUPPLY TO DETERMINE OIL'S PEAK
January 22, 2008
Forecasts that world oil supplies are poised to fall off the edge of a cliff are wide of the mark, according to Cambridge Energy Research Associates (CERA).
According to CERA:
- Oil output, including unconventional oil, such as tar sands, could allow oil to peak at much higher levels of as much as 112 million barrels a day, with average rates of more than 100 million barrels a day.
- Current world oil output is in the region of 85 million barrels a day
- Overall output was declining at a rate of 4.5 percent a year and field decline rates were not increasing.
- That rate of decline is much lower than the 7 to 8 percent average rate that is generally assumed in the industry.
The optimistic view of the world's oil resource was also given support by BP's chief economist, Peter Davies, who dismissed theories of "Peak Oil" as fallacious. Instead, he gave warning that world oil production would peak as demand weakened, because of political constraints, including taxation and government efforts to reduce greenhouse gas emissions.
Source: Carl Mortished, "'Demand, not supply' to determine oil's peak," The Australian, January 19, 2008.
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