|World oil and gas supplies are headed for a "production crunch" sometime
between 2010 and 2020 when they cannot meet supply, because global reserves
are 80 per cent smaller than had been thought, new forecasts show.
An analysis presented this week at the University of Uppsala in Sweden
suggests that oil supplies will peak soon after 2010, and gas supplies not
long afterwards. That will make the price of petrol and other fuels rocket,
with potentially disastrous economic consequences unless people have shifted
to non-oil-based supplies.
While forecasters have known that such a date lies ahead, they have always
put it around 2050, and reckoned there is time to shift energy use over to
renewables and other non-fossil sources.
But now Kjell Aleklett, one of a team of geologists who prepared the
estimate, said that earlier estimates that the world's entire reserve
amounts to 18,000 billion barrels of oil and gas - of which about 1,000
billion has been used up so far - are "completely unrealistic".
Instead, he and Anders Sivertsson and Colin Campbell told New Scientist
magazine that they reckon that less than 3,500 billion barrels of oil and
gas remain in total.
Commenting on the work, Dr James McKenzie, senior assistant on the climate
change program at the World Resources Institute in Washington, DC, said: "We
won't run out of oil - but what will happen is that production will decline,
and that's when all hell will break loose."
Present oil consumption is about 25 billion barrels of oil annually and
shows no signs of slowing down. That would suggest a "production crunch" -
where consumption grows to meet the maximum output - within the next couple
Dr McKenzie said that on this topic the argument splits between economists
and geologists: "The economists think that it will just force the price of
oil up, which will mean that it will become economic to extract it from all
sorts of unusual places, such as tarry sands or deposits which are 90 per
cent rock and 10 per cent oil.
But the geologists say - you tell us where the deposits are and we'll find
them. But we've looked and we can't."
One side-effect of having lower oil reserves might be that the worst
predictions of climate change would be forestalled - because there would be
less fuel to burn and put the greenhouse gas carbon dioxide into the
In fact, the Uppsala team's estimates are lower than any considered by the
International Panel on Climate Change (IPCC), whose minimum estiimate for
the total reserves was 5,000 billion barrels.
But Nebojsa Nakicenovic, an energy economist at the University of Vienna in
Austria, who headed the IPCC team that produced the reserves forecasts, said
that the Swedish group were "conservative", and that his team had taken into
account a wider range of estimates. And, Dr Nakicenovic pointed out, if oil
and gas begin to run out, "there's a huge amount of coal underground that
could be exploited".
However Dr McKenzie said: "We have to accept the fact of oil and gas
production peaking, and get concerned with substitutes. It's not when will
we run out, it's when will production be unable to meet demand. And 97 or 98
per cent of transport depends on it. You can use coal to make methanol to
power your cars or buses. But the reality is that it's all about where the
The Persian Gulf countries - Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi
Arabia, and the United Arab Emirates - produce about 25 per cent of the
world's oil, and hold 65 per cent of the world's oil reserves.
"That's why we went to war in Iraq," said Dr McKenzie. "Gas might have
comparable reserves to oil, but it's not in the right place and we don't
really have the infrastructure to transport it."