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Over the past year, American drivers have found themselves longing for the days when two dollars per gallon seemed expensive. Oil prices are rising at an unprecedented rate, and as a result, many are questioning whether the Earth's available oil supply has reached its peak. Are there still oceans of oil awaiting our discovery? How much pain you'll be feeling at the pump in the future depends on the answer.
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EVERYTHING Depends On When And How Fast
IEA Found 9% Decline Rate; the Export Rate Will Fall Faster
The International Energy Agency (IEA, based in Paris) has just lost its rose-colored glasses, and given us an estimate of the global decline rate in their "World Energy Outlook" annual report ( http://www.worldenergyoutlook.org / ): the world's 800 largest oil fields that are in decline have an average physical decline rate of 9%. (The many other fields still in the plateau phase today, may be expected to decline 9%/year also, sooner or later.) The decline rate in quantities available for import/export must be somewhat higher than that. My guess of 10%/year seems too low, now. This unfortunately tips my expectations back into the realm of national disaster (for industrial economies). Compare a 9% decline to your normal economic recession shrinking 2%, and then have that 9% go on for many years... NOW is the time to do something about it, while energy is once again cheap, for what could become the last time.
The current stunning drop in crude oil prices proves to me beyond any shadow of doubt that supply-rate limits had been hit. The curve of price-per-extra-barrel-per-day must have become very, very steep indeed, if a couple % of reduced demand (world-wide) can cause the price to fall from $147 back to $49/barrel!
- Dr Marcel Schoppers
November 24, 2008 10:08PM
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