A recent article from the Independent was forwarded to me with the headline “Oil shortage a myth, says industry insider“. I was wondering why someone in a prominent position (Richard Pike was the CEO of the Royal Society of Chemists) with little to gain from either supporting or criticizing the oil industry would make such a statement.
Well, a little more investigative work led me to the original article published in the Petroleum Review in June 2006 with a title “Have we underestimated the environmental challenge?” The title seemed like a far cry from the dramatic newspaper headline – I had to find out why.
My interpretation of Dr Pike’s original article was that it made a case for how to account for CO2 sequestration (presumably as a counter to global warming and to meet Kyoto Protocol obligations) – how environmentalists and policy makers must use the larger value (proven + probably) estimates of oil reserves, instead of just the “proven” estimates. The quote “the world is understating the environmental challenge facing generations to come” actually refers to the challenge of actually removing or mitigating the effects of greenhouse gas emissions – and not of producing sufficient oil to meet current demands.
That’s why I found it strange that the Steve Connor (the Science editor of the Independent) picked up on this article and made the connection with Peak Oil, which was not the original intent of the article. Since the article was published in June 2006, oil prices has risen from $63.44 to $135 – it’s more than 100% over two years – so my guess is that there’ll be no shortage of articles trying to explain either (1) why prices are so high and should go higher OR (2) why prices are so high and should collapse.
I don’t think there’s any contradiction with the article’s findings and Peak Oil theory – the problems anticipated by the Peak Oil theory is not one of whether there is sufficient proven or probable reserves but that the production of oil will peak and decline and this prediction is not based on assessments of reserves, but on the amount of oil discovered each year (which peaked in the 1960’s at about 55Gb/year).
The only question is: when is Peak Oil? Latest EIA statistics (http://www.eia.doe.gov/emeu/ipsr/t21.xls ) indicate that world oil production has not increased since 2005 – where the average production plateaued at a little less than 85 mil barrels/day. There is increased public awareness that oil is a finite resource – witness the number of headline stories in the New York Times and bold pronouncements of $200 / barrel and $150 / barrel prices by Goldman Sachs and Deutsche Bank analysts.
But the unfortunate fact of peak oil is that it can only be recognised after it happens.
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