Entering the Tough Oil Era | EnergyBulletin.net | Peak Oil News Clearinghouse

Entering the Tough Oil Era | EnergyBulletin.net | Peak Oil News Clearinghouse

oil output in the United States and most other non-members of the Organization of Petroleum-Exporting Countries (OPEC) has peaked, or is about to do so, which means that the net contribution of non-OPEC suppliers will only diminish between now and 2012. That, in turn, means that the burden of providing the required additional oil will have to fall on the OPEC countries, most of which are located in unstable areas of the Middle East and Africa.

The numbers are actually staggering. Just to satisfy a demand for an extra 10 million or so barrels per day between now and 2012, two million barrels per day in new oil would have to be added to global stocks yearly. But even this calculation is misleading, as Eagles of the IEA made clear. In fact, the world would initially need "more than 3 million barrels per day of new oil each year [just] to offset the falling production in the mature fields outside of OPEC" -- and that's before you even get near that additional two million barrels.

In other words, what's actually needed is five million barrels of new oil each year, a truly daunting challenge since almost all of this oil will have to be found in Iran, Iraq, Kuwait, Saudi Arabia, Algeria, Angola, Libya, Nigeria, Venezuela, and one or two other countries. These are not places that exactly inspire investor confidence of a sort that could attract the many billions of dollars needed to ramp up production enough to satisfy global requirements.

Read between the lines and one quickly perceives a worst-case scenario in which the necessary investment is not forthcoming; OPEC production does not grow by five million barrels per day year after year; ethanol and other substitute-fuel production, along with alternate fuels of various sorts, do not grow fast enough to fill the gap; and, in the not-too-distant future, a substantial shortage of oil leads to a global economic meltdown.