Fri, November 16, 2007
Ringing alarm of peak oil
'Fault line of world economic history,' report warns
By VIVIAN SONG, SUN MEDIA
World oil production may have reached its peak and will affect everything from cheap airfares, grocery lists and the auto industry, according to a new report released yesterday.
Momentum in global oil production is slowing with aging oil fields and fewer discoveries, since the world has been "seismically searched and picked over," the report from the Earth Policy Institute, an environmental think tank, claims.
"Whenever peak oil comes, it's going to be a seismic event," president Lester R. Brown said from Washington, D.C.
"I think future historians looking back will probably use the terms BPO, Before Peak Oil, and APO, After Peak Oil, because this could be one of the great fault lines in economic history."
Global oil discoveries peaked in the 1960s. Since 1984, world oil production has exceeded new discoveries: Last year, 31 billion barrels of oil were extracted while nine billion barrels were discovered, the report said.
According to the International Energy Agency, oil production has lagged since 2005, when it climbed to 84.15 barrels per day from 82.9 million barrels in 2004.
"(Peak oil) will also introduce a new era," said Brown, a recipient of the United Nations Environment Prize. "No country can get more oil unless another country gets less."
Ten-dollar airfares between European cities will be remembered as the heyday of air travel, while the 4,000 km Caesar salad -- in which Romaine lettuce comes from California -- will be scarce, he said.
"We're going to see changes in long distance travelling. It may not end abruptly, but it will certainly be squeezed."
A former senior Saudi oil official reports the annual output from the world's 20 largest and oldest oil fields is falling by four million barrels a day.
While the U.S. peaked in 1970, Canada has "substantial potential for increasing output" with its oil sands and is among a small group of pre-peak countries, the report says.
But it's not a viable solution to offset cheap oil since it takes two units of energy to produce three units of oil, Brown said.
Because oil is a globally priced commodity, Canada isn't immune to fallout, added Calgary-based geologist David Hughes.
"Canada will be able to look after our domestic needs but we won't be shielded from high oil prices," he said.
Over the past two years, oil prices have doubled from $50 to $100 a barrel. But the world has undergone multiple oil scares, critics note, and technology is always evolving.
The difference, Brown said, is politics.
"In the 1970s, oil price rises were entirely politically driven ... But today the rise in prices is driven by geological forces."
http://torontosun.com/News/World/2007/11/16/4659971-sun.html
