Peak oil — the writing is on the wall
From Lewis L. Smith
There is no longer any doubt that world production of crude oil [however defined] is going to peak within everybody’s planning horizons, if it hasn’t done so already. The only argument is over when.
The turning point in discussions of this subject came in 2008 when the Saudis stopped talking about producing 10 to 25 million barrels per day for the next 50 years and admitted that their production was going to peak at 12 million barrels per day within a few years and then begin to decline, until all their wells are capped.
Today the forecasts range from 2004 [Dr. Rafael Sandrea — conventional crude] to 2032 [Exxon/Mobil — all crudes] , with a preferred range of 2010 — 2015.
Needless to say, for strategic and electric-utility planners, these dates are “just around the corner”.
We call attention here to three news items re peak oil which we think to be of great importance.
 Department of Energy [USA] —
Traditionally an optimist which echoed the “party line” of “Big Oil”, at a recent but poorly publicized meeting in Paris, DOE admitted for the first time in its history that a peak is possible [though not probable] by 2011.
The implied best estimate for a peak, based on the latest long-term forecast of DOE’s Energy Information Administration, is soon after 2020. This puts EIA in line with the UK Energy Research Centre report of 2009 which says peak oil is highly probable by 2020 and almost certain by 2030.
 Joint Forces Command, a logistical unit of the US armed forces —
In a report, “Joint Operating Environment”, February 198, 2010, the JFC makes the following forecast [p. 29] —
[a] Peak oil by 2012.
[b] A production shortfall of 10 million barrels of crude per day by 2015.
[c] Political and military disturbances thereafter.
We believe that this forecast should be taken very seriously, for two reasons. First of all collectively, the US armed forces are the largest consumers of gasoline in the world. If they are worried about their supply, you should be too ! Secondly, by making this forecast public, the JFC is openly defying DOE in a country with a strong tradition of civilian supremacy over the military.
For the report itself, go to —
 Lloyd’s of London —
In a new report, “Sustainable energy security” [no date] , Lloyd’s, the insurance giant of London, gives a number of warnings to everyone concerned with energy. They include the following —
“This report, jointly produced by Lloyd’s “360 Risk Insight” program and Chatham House, should cause all risk managers to pause.
“What it outlines, in stark detail, is that we have entered a period of deep uncertainty in how we will source energy for power, heat and mobility, and how much we will have to pay for it.
“Is this any different from the normal volatility of the oil or gas markets? Yes, it is.
“Today, a number of pressures are combining : constraints on ‘easy access’ to oil; the environmental and political urgency of reducing carbon dioxide emissions; and a sharp rise in energy demand from the Asian economies, particularly China. [p. 3]
Over reliance on fossil fuels is driving companies to take unnecessary environmental risks as typified by the recent oil disaster in the Gulf Of Mexico. [pp. 24+]
For a copy of the report, go to —
Whether or not you agree with these forecasts and warnings, they should be taken very, very seriously, especially considering the source. At the very least, you should start working on your “Plan B”, if you haven’t done so already.
As a prophet said to a king, long, long ago, the writing is on the wall !