Eleven years into the
21st century, and the world remains
heavily dependent on the fuel that powered the last 100 years:
crude oil. Concern about the depletion of conventional global oil reserves seems
to have intensified for several reasons, including technological improvements
in geological data gathering and analysis, the increasingly sparse reserves
discovered by new drilling, question marks over the real size of global proven
reserves and concerns that much of the world's conventional oil especially
in the Middle East, is coming from old and overexploited mega-fields that are
becoming less productive. There is no risk that we are running out of oil
but chances of being able to match the projected growth in demand over the
medium-term with a rise in production is being seriously questioned. The
pressure on the oil price will continue unabated in coming years because of
the growing global demand for oil and the dwindling global proven oil
reserves.
Conventional oil production peaked in 2006. My own research, however,
indicates that the peak may have already been reached in 2004 if we factor
in what I describe as "OPEC's inflated proven oil reserves". My research
indicates that OPEC's proven oil reserves are overstated by
some 300 billion barrels (bb).
Eight of the top oil producers in the world have already peaked:
USA peaked in 1971, Canada in 1973, Iran in 1974, Indonesia 1977, Russia in
1987, UK in 1999, Norway in 2001 and Mexico in 2002 while China and
even Saudi Arabia are about to peak. The only one among the top producers
that has clear capability to increase production is Iraq once stability is restored
to the country.
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