In the early 20th century, massive oil fields were discovered in the Middle East. This discovery quickly gave birth to a century of new technological advancements and modernized the patterns of the society. The discovery of oil significantly shifter the global balance of power.
Everything meets an inevitable end and so will fossil fuels. Their nature restricts their unlimited use, and they will eventually diminish. For most of the 20th century, running out of oil was never a discussion, as most of the world's oil was still undiscovered.
With the advent of modern oil-fueled technological advancements, such as fighter jets, tanks, automobiles, the concerns arose regarding the overuse of oil. With the continuous and unwarranted consumption of oil, the oil prices are expected to explode. Furthermore, if the oil dries up, all the modern technologies will become obsolete and unusable.
'Peak oil' theory was first introduced in the 1970s. This theory calculates the point where half of the world's known oil reserves would have been pumped. This theory predicts the future of oil consumption, extinction and the point where we will all run out of the "precious oil."
The Elemental Factors Behind "Peak Oil"
There are three important figures analysts need to allow for project future oil production:
1. A total of oil extracted to date, also known as "cumulative production".
2. The second is estimate of reserves, the total amount companies can extract from known fields before being forced to abandon them.
3. An estimate of how much exploitable conventional oil remains to be discovered.
The then are totally to give the total number of barrels extracted when production finally ceases in some decades time.
The Current State of Oil Sources
The easiest way to understand peak dates is to consider whether oil production has outstripped oil discoveries.
Compelling evidence for this suggests oil discoveries actually peaked in the 1960s. The most recently discovered large oil field was in Mexico back in 1985, whilst most fields currently in operation were discovered in the 1950s.
The world is consuming around four times the quantity of discovered oil. Whilst oil companies are investing heavily in discovering new oil reserves, new fields are much smaller, producing far less oil.
With diminishing discoveries, current oil production is depleting remaining reserves.
Estimated Future of Oil Production
Whilst some optimistic predictions argue peak dates up to 2060, the consensus between world leaders and analysis is between 2015 and 2030, with a significant change it is around 2020.
An Oxford University and a separate Kuwait University study in 2010 predicted production would peak around 2014-2015. A 2014 validation of a significant 2004 study in the journal Energy suggested conventional oil production peaked between 2005 and 2011.
Phibro statistics show major oil companies hit peak production in 2005. In 2011, Fatih Birol, the chief economist at the International Energy Agency, stated, "crude oil production for the world has already peaked in 2006."
If production is meant to start diminishing worldwide very soon, then we should already see countries that have reached their peaks or are just about to reach their peak.
Of the top seven oil producers, six are in decline or near peak production. The USA peaked in 1971, Norway peaked 2001 and the UK peaked in 1998 whilst Russia, Mexico and China are estimated to peak in 2008. It is likely Saudi Arabia peaked in 2005. Iran is the only top seven producer having the capacity to increase production.
There are several other factors supporting the early peak argument. Major oil companies are struggling to replace reserves and fulfil previous over-estimates.
Consolidation in the oil industry conceals reserve shortages by combining existing reserves. Oil companies like BP have resorted to replacing reserves through production agreements on old fields rather than pure exploration so investment in exploration is falling.
Technical feedback from the state of major Saudi Arabian oil fields indicates a high level of depletion. US foreign policy across the Middle East, Afghanistan, CIS, India, China and Asian states indicates frantic scouring for oil and gas.
It is for these reasons peak oil enters mainstream discussion. The world running out of oil is becoming a geopolitical headache for the world's powers.
This argument however masks a number of deeper political issues. The world running out of oil is a convenient excuse for the West's over-consumption, since to reduce consumption is considered the ultimate taboo, As more and more nations scramble for an ever-dwindling supply. The Western world consumes 50% of the 21st century's most important resource but produces less than a quarter. It is over-consumption rather than depletion that is the cause.
The US produces 8% of the world's oil but consumes 25%. Such consumption is never sustainable; the West has relied on a small number of large fields for their daily intake. Though the world possesses tens of thousands of operating fields, only 116 produce more than 100,000 barrels per day, accounting for 50% of global output. Of these, all but a handful were discovered more than a quarter of a century ago, most showing signs of diminished capacity. Indeed, some of the world's largest fields – including Ghawar in Saudi Arabia, Burgan in Kuwait, Cantarell in Mexico, and Samotlor in Russia – are now in decline.
The decline of these giant fields matters greatly. Compensating for their lost output will take increased yield at thousands of smaller fields, and there is no evidence
that this is even remotely possible. As consumption continues to rise, the competition for dwindling energy sources will intensifies.
Although oil is running out, it is Western consumption patterns driving the crisis rather insufficient oil.
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