Oil won't hit peak production for 25 years, historian says
WASHINGTON -- Far from being a nearly exhausted resource, the world's oil reserves are three times bigger than what some popular estimates state, and peak global oil production still is about a quarter-century away, according to a new study by Pu...
WASHINGTON -- Far from being a nearly exhausted resource, the world's oil reserves are three times bigger than what some popular estimates state, and peak global oil production still is about a quarter-century away, according to a new study by Pulitzer Prize-winning oil historian Daniel Yergin.
The remaining oil resource base is about 3.74 trillion barrels, according to a report released Tuesday by Cambridge Energy Research Associates, which Yergin runs. That's more than three times the 1.2 trillion barrels that "peak-oil" theorists suggest.
The report, titled "Why the Peak Oil Theory Falls Down," challenges an increasingly popular view that the world is about to run out of oil. On the contrary, the report argues that the world is likely to begin running out of oil between 2030 and the middle of the century. Even so, the report says, efforts are needed to push that date back, such as new oil field discoveries, new technologies, energy conservation and alternative energy sources.
Peak-oil theorists warn that the world is on the cusp of a disastrous and rapid decline in oil production. A leading proponent of the theory is oil banker Matthew Simmons, who in the popular book "Twilight in the Desert" suggested that the world's top producer, Saudi Arabia, has entered an oil-production decline and will take the world down with it. Last month, Simmons told a forum that the world might have reached peak oil production in December 2005.
The peak-oil theory has gained supporters since late 2004, when surging global demand for oil began tightening up available supplies and driving up world oil prices. The price hit $78.40 a barrel in July, but has fallen to less than $60 a barrel in recent months.
"This is really the fifth time we've 'run out of oil,' " Yergin said in a teleconference with journalists Tuesday. He recalled past predictions dating back to 1880 of an end to oil or gasoline production.
Yergin's views carry weight because he won the Pulitzer for his 1991 book "The Prize," an exhaustive history of oil economics.
Another source of optimism for this energy-hungry world emerged from another report this week, this one a technical paper from the Los Angeles-based think tank Rand Corp. It ran 1,500 simulations of varied energy prices and technology costs to estimate future supplies of renewable and nonrenewable fuels.
It concluded that up to one-quarter of the electricity and motor fuels consumed in the United States in 2025 could be produced from renewable sources, up from 6 percent today. For that to happen, the price of fossil fuels must remain high and the costs of producing alternative energy must keep falling.
"The renewables case could displace about 2.5 million barrels a day of petroleum products in the United States in 2025, or 20 percent of total consumption," the Rand report said.