Sunday, April 18, 2010

Peak Oil

The world's oil supply is finite and many credible sources are counting down to the moment when demand exceeds supply.

As indicated in the CNA report "Powering America's Defense," there is a strong relationship between climate change, energy dependence, and national security. The report clearly states that continued reliance on fossil fuels creates “an unacceptably high threat level from a series of converging risks.” These threats include conflicts over fuel resources, destabilization driven by ongoing climate change, and threats to critical infrastructure. According to the report, dependence on foreign oil weakens international leverage, jeopardizes the military, and entangles the US government with hostile regimes.

In February 2010, the IISS held a workshop on climate change and energy security. Their discussion included a review of some direct threats due to climate change. Although participants were divided, some of those present put forth the idea that we could surpass ‘tipping points’ that could lead to rapid, dangerous changes.

The US Army is the biggest single user of oil in the world and according to a Joint Operating Environment report from the US Joint Forces Command, surplus oil production capacity could disappear within two years. Serious shortages are expected by 2015 with a significant economic and political impact. "By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report.

In February 2010, Ibrahim Sami Nashawi, Adel Malallah and Mohammed Al-Bisharah from the College of Engineering and Petroleum at Kuwait University, published a study on global oil supply using a multi-cycle Hubbert model. The original Hubbert model in 1956, accurately predicted that oil production would peak in the United States around 1970.

Although widely accepted, the Hubbert model has been criticized because it does not consider factors like technological innovation, political events, social tensions and economic considerations. The Kuwait study methodology is a multi-cycle approach that incorporates elements ignored by the Hubbert model.

According to the findings of the Kuwait study, the world production is estimated to peak in 2014 at a rate of 79 million barrels/day. OPEC has a remaining reserve of 909 barrels, which is about 78% of the world reserves. OPEC production is expected to peak in 2026 at a rate of 53 million barrels/day. On the basis of 2005 world crude oil production and current recovery techniques, the world oil reserves are being depleted at an annual rate of 2.1%.

Due to its environmentally harmful effects and dwindling supply we must prepare for a world without oil. Clean energy production is not only a sensible strategy to meet shortfalls in energy demand, it is the most sustainable way to replace existing demand.
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