Is the World heading for a major Murphy's Law Event?
Just a few statistics:
- Petroleum (tar sands, oil and gas etc) supplies 62% of the world' s energy and supply capacities are being challenged.
- Coal supplies 27% of the world's energy with some 50% of that used in the chemical reduction of mineral (metal) ores to produce metals and other elements. Few alternatives exist for the chemical reduction of ores.
- Nuclear energy supplies 6% of the world energy and both the reserves and supply of Uranium are also challenged.
- Renew-able energy supplies 6% of the world's energy, and almost all of that is hydro-electric and fully exploited, there are small and increasing annual gains in wind power. (BP 2005)
Demand for oil to challenge supply capacity
A comment from Chip Goodyear puts us in the picture, a little: "There are a number of new oil fields coming into production in 2006 and 2007. With the flush of their initial production oil prices may go down to the low to mid fifties US$ per barrel." (Chip Goodyear, CEO BHP-Billiton, radio interview 2005)
What Chip Goodyear didn't say was that there is little new production coming on-line after 2007.
This quote from a Lehman Brothers report tells the rest of the story:
“Beyond 2007, the supply/demand balance (for oil) looks increasingly tight and we conclude that there is more risk of a supply shortfall than a surplus toward 2010.” (Lehman Brothers 2006)
Claude Mandril (Executive Director of the International Energy Agency) confirms this view:
“Oil markets will remain tight over the next three years with little hope that additional capacity in both upstream and downstream will be enough.” (Tenth International Energy Forum in Doha April 2006, Platt's news service)
When will world oil production decline?
Many petroleum geologists consider that the world production of conventional crude oil has already peaked and that the total world petroleum production peak is near.
The following quote expresses the view of a very large number of highly respected petroleum geologists and energy economists:
“The mathematical peak falls at the year 2004.7; call it 2005. However, I'm not betting the farm that the actual year is 2005 and not 2003 or 2006. The top of the mathematical distribution is smoothly curved, and there is a fair amount of jitter in the year-to-year production. Remember, the center of the best-fit U.S. curve was 1975 and the actual single peak year was 1970. There is nothing plausible that could postpone the peak until 2009. Get used to it.” (Deffeyes 2001)
The United States and Australian Federal Governments are increasing our dependence on oil by allocating large sums of money toward building more roads instead of the much more fuel-efficient rail, shipping and human-power transport.
Happy Murphy's Law Event!
BP Statistical Review of World Energy 2005
Lehman Brothers, Global Equity Research, Integrated Oil 03/04/06 pp14)
p158 "Hubbert's Peak - The Impending World Oil Shortage" Kenneth Deffeyes, Emeritus Professor of (Petroleum) Geology, Princeton University, Princeton University Press 2001[an error occurred while processing this directive]