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    Friday, May 24, 2024

    Peak oil looms

    As 2009 ended, a report issued by the International Energy Agency (IEA) received scant media attention, but it has huge implications for future U.S. economic growth and national security.Faith Birol, chief economist for the IEA, announced that unless there are major new oil discoveries, something his agency does not expect, the output of conventional oil production will peak in 2020. The agency's official conclusion is that production will reach a plateau sometime before 2030.

    Faith Birol, chief economist for the IEA, announced that unless there are major new oil discoveries, something his agency does not expect, the output of conventional oil production will peak in 2020. The agency's official conclusion is that production will reach a plateau sometime before 2030.The news was startling from an agency that had previously refused to predict when oil supplies might stop growing. In fact, the IEA, closely watched by the world energy markets as an objective analytical source, had previously downplayed the prospects that oil production was reaching a peak.

    The news was startling from an agency that had previously refused to predict when oil supplies might stop growing. In fact, the IEA, closely watched by the world energy markets as an objective analytical source, had previously downplayed the prospects that oil production was reaching a peak.The problem, of course, is that oil demand will keep growing. While the worldwide recession temporarily stalled energy demand, dramatic growth in India and China (now the leading purchaser of motor vehicles) and other emerging markets will ramp up consumption. As demand outstrips production, serious problems will begin - price spikes, shortages and potential international conflicts as nations jockey for access to oil.

    The problem, of course, is that oil demand will keep growing. While the worldwide recession temporarily stalled energy demand, dramatic growth in India and China (now the leading purchaser of motor vehicles) and other emerging markets will ramp up consumption. As demand outstrips production, serious problems will begin - price spikes, shortages and potential international conflicts as nations jockey for access to oil.IEA analyzed 800 oil fields and found significant declines in annual output. Even if oil demand were to remain flat, the world would need to find the equivalent of four new Saudi Arabias to offset that decline.

    IEA analyzed 800 oil fields and found significant declines in annual output. Even if oil demand were to remain flat, the world would need to find the equivalent of four new Saudi Arabias to offset that decline. Most recent oil field discoveries have been comparatively small and more expensive to access, the IEA found. Nonconventional sources such as tar sands can help, but they demand far more energy to produce an equivalent amount of oil, meaning a much smaller net energy gain. They also produce more greenhouse gases.

    Most recent oil field discoveries have been comparatively small and more expensive to access, the IEA found. Nonconventional sources such as tar sands can help, but they demand far more energy to produce an equivalent amount of oil, meaning a much smaller net energy gain. They also produce more greenhouse gases.The report underlines the urgent need for the U.S. to get serious about reducing foreign oil dependence, through conservation, new nuclear plant construction, investment in renewable energy and changes in lifestyle. Peak oil aside, such a national effort will also have economic and environmental advantages.

    The report underlines the urgent need for the U.S. to get serious about reducing foreign oil dependence, through conservation, new nuclear plant construction, investment in renewable energy and changes in lifestyle. Peak oil aside, such a national effort will also have economic and environmental advantages.This is a warning the nation should not choose to ignore.

    This is a warning the nation should not choose to ignore.

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