The Coming Oil Plateau
A piece in tomorrow's Wall Street Journal by my former colleagues Russell Gold and Ann Davis deliver the cold truth about the state of global oil: We may not be technically near a peak in terms of actual world oil supplies, but we are near an effective peak, because there simply isn't the technical capacity to produce much more.
The world consumes around 87 million barrels of oil a day. At an OPEC conference I attended in Vienna last year, a European oil executive told me that the industry was capable of producing only about 10 or 15 million barrels of oil more than that -- or a maximum of about 100 million barrels a day. Those are the limits of rigs and other equipment, technical staff, and the limits of actual drilling, he said. In addition, the industry simply isn't find any more big fields that can provide big scale production.
The Journal piece says the same thing, and suggests that in the next few years that ceiling could produce some real friction in the world as it struggles for a suddenly finite resource.
The good news, I think, is that this will accelerate the ingenuity of laboratories around the world seeking both more efficient ways to use the carbon molecule, and alternative ways to fuel the world economy.
Yet given this reality, Italy's Eni, negotiating on behalf of many of the world's largest oil companies with Kazakhstan, will try to satisfy Kazakhstan and proceed with the development of Kashagan, which contains a minimum of 13 billion barrels of recoverable oil. That could turn into production of another 1.5 million barrels of oil a day into this tightening world market.
Photo: Kittymaduk
Rights: Creative Commons
Labels: caspian oil, kazakhstan oil, oil book, russia oil



4 Comments:
Dang guys.... seriously this is getting kinda scary, I'm a U.S citizen and I see my government going out of control, going to the middle east to secure our place with the oil. I know that this has a very good chance of starting a world war :( and than I can't help but think of revelations.
Hi Anonymous. What continues to distract attention is high oil prices and oil company profits. They make the current energy world seem enduringly high-flying. It's not. However, I wouldn't despair. As you see in the recent months' issues of all the major magazines, in the papers and in the blogosphere, there's a race on to innovate out of the coming crunch. (I wrote about this last week in
The New Republic.) Only, Big Oil as we know it will not survive. Thanks for the comment and best, Steve
Sorry, here is the link.
That is the term I have been looking for "technical capacity" when trying to communicate to doubters that peak oil is upon us.
Looks like a great read, I will be purchasing it immediately!
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