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A recent study by the UK Energy Research Centre warns that global oil production will peak in 2020 by the latest and start  declining sharply. 

If Peak Oil were still more than a decade away, we`d be extremely lucky. Global oil reserves are not endless. But there´s still plenty of oil in the ground. The problem, however, is that it´s getting increasingly more difficult and more expensive to drill the remaining oil out of the wells. Other factors that will drive oil prices up shortly is the fact that both private oil companies and national oil companies do not even invest enough to maintain current production rates. The oil infrastructure is rusting away globally…

And even if OPEC, Russia (which recently surpassed Saudi Arabia in terms of daily oil production: http://www.officialwire.com/main.php?action=posted_news&rid=29727&catid=3) and other major oil producers were able to maintain their current production capacities, a new unprecedented peak in demand would outstrip supplies soon.

The report further says that there is consensus that the “era of cheap oil is at an end”. I guess nobody dares to doubt this fact.

Nevertheless, few governments seem to care about the threats to economic stability that will follow Peak Oil.

No matter how close Peak Oil is, we will struggle to meet demand since the vast majority of the world`s major oil fields, which have been supplying us with cheap crude oil for decades, has already passed its peak. Replacing them is quite a challenge. We´d need to discover a few more Saudi Arabias to meet the world´s demand for oil until mid-century.

Deutsche Bank recently issued a report “The Peak Oil Market” in which it says that the end of the oil age is near:

- underinvestments in declining fields as well as exploration will result in a supply crunch

- a global peak in oil demand is ahead

- hybrids, electric cars and renewable energies will increasingly become the more attractive alternative

In 2020 when the British researchers expect Peak Oil, Deutsche Bank expects electric cars and hybrids to account for 25% of car sales in both the U.S. and China.

I am convinced that electric cars will be on the roads in large numbers by 2020 and that green energy technologies will have found their ways into private homes making decentralized energy production possible in addition to huge solar parks that will become commonplace in sunny, arid regions all across the globe. But this does not mean the end of the oil age. Rather it´s a byproduct of the age of energy scarcity which we´re entering. There will be demand for all the energy being generated - be it dirty or green, cheap or expensive, central or decentral….

To prevent climate change from becoming unmanagable, we need to replace many conventional power sources by carbon-free alternatives. Furthermore we have to conserve energy wherever possible and generate a whole lot of energy from convetional sources to meet future energy demand. Renewables will thrive, but so will oil, uranium, coal, and gas. Energy is becoming the most important commodity next to water in this century.  

 Check out my summary of the World Energy Outlook 2008:

http://www.whatmattersweblog.com/energy/

IEA: Oil supply crunch and mega-recession by 2013 

Peak Oil: The End Of the Oil Age is Near, Deutsche Bank Says

http://blogs.wsj.com/environmentalcapital/2009/10/05/peak-oil-the-end-of-the-oil-age-is-near-deutsche-bank-says/

Warning over global oil ‘decline’

http://news.bbc.co.uk/2/hi/science/nature/8296096.stm

This entry was posted on Thursday, October 8th, 2009 at 5:22 PM and is filed under Energy, myVIEW. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.