Peak Oil is here

I’ve been reading about peak oil for a few years, and I know that in the US, we reached peak oil production in the early 1970’s, but I was curious about global peak oil production so I looked at some hard numbers.  Here’s an Excel spreadsheet with the latest numbers I could find:

oil-prod-by-year

The information in the spreadsheet is from the US Department of Energy, and I imported it into Excel so I could create some line charts to make the trend easier to view. 

There are two tabs in the sheet, one is the total world production of crude oil, the other includes other petroleum products such as natural gas.  But both show the same trend – global petroleum production has at least plateaued in the past 3 years, and it may actually be declining.

In other words, if we haven’t seen “peak oil” in the past year, we’re most likely at peak oil right now.

Here’s another way to look at it – we will (most likely) produce less oil worldwide in 2008 than we did in 2007.  Since worldwide demand is still rising fast (mainly due to growth in China and India) what do you think is going to happen to the price?

Hint – no one has managed to repeal the law of supply and demand.  Demand is still rising (even at these rediculous prices) while the supply is falling.  If more people want the same thing, the price is bid up. 

Assuming the data from the Department of Energy is correct, those who are looking for the price of oil to fall long term might as well be looking for a free lunch.  It aint gonna happen.

The price of oil will still fluctuate, but overall the trend will be up.  It might even drop 50% from today, but I don’t think there’s anyway oil will be cheaper 10 years from now than it is today.

Anyone disagree?

gk

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  1. […] “peak oil” which is a totally different subject – but I happen to agree with him.  I wrote about it a few months […]

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