Saturday, May 24, 2008
World Oil Shortfall Likely By 2015
On May 22, 2008, the Wall Street Journal reported that the world's premier energy monitor, the International Energy Agency (IEA), is predicting that the world could face an oil shortfall by 2015 of as much as 12.5 million barrels a day, unless there is a sharp drop in expected demand.
The United States Department of Energy's Energy Information Administration has made preliminary findings that daily output of conventional crude oil alone, now about 73 million barrels, will plateau at 84 million barrels, and that it will take a significant uptick in production of nonconventional fuels such as ethanol to push global fuel supplies over 100 million barrels a day by 2030, when global oil demand is predicted by the IEA to be in excess of 116 million barrels a day.
On May 23, 2008, the WSJ reported how mounting concerns about the global energy supply and public outrage over high gasoline prices are increasing pressure on the United States government and Congress to end longstanding bans on domestic drilling in environmentally sensitive areas, such as off the coasts of California and Florida, and the Arctic National Wildlife Refuge. Oil company executives, such as Exxon's President Rex Tillerson, claim to have no doubt there are significant conventional oil resources in the off-limits areas.
However, WSJ admits that little data exist about how much oil and gas might be found under the waters now closed for exploration. I have heard people assert that there is enough oil in the closed areas to supply the U.S. with oil for the next fifty years. Apparently, there is no data to support such an assertion.
Therefore, it is not necessarily the case that increased drilling will lead to lower gasoline prices.