Energy Dept downgrades oil production estimates
Heard of “peak oil”? This is the idea that once the amount of oil extracted passes the amount remaining in the ground, prices will ramp drastically upward. US oil production hit peak in the ’70s, as predicted, and over the last few years experts have been saying global peak oil is nigh, if not already upon us.
Well, now the US Department of Energy’s Energy Information Agency, a non-partisan data-collecting and -crunching source that industries and experts rely on for the best available information on energy, has dramatically downgraded its forecast of the global oil production.
As recently as 2007, the [EIA’s] International Energy Outlook (IEO) projected that the global production of conventional oil (the stuff that comes gushing out of the ground in liquid form) would reach 107.2 million barrels per day in 2030, a substantial increase from the 81.5 million barrels produced in 2006. Now, in 2009, the latest edition of the report has grimly dropped that projected 2030 figure to just 93.1 million barrels per day — in future-output terms, an eye-popping decline of 14.1 million expected barrels per day.
What the agency appears to be saying is that the era of peak oil is upon us. There is non-conventional oil such as that derived from tar sands and shale, but it’s much more expensive and polluting to extract. So either way, prices go up.
Suddenly renewable energy isn’t looking so expensive.