Depletion of crude supplies from existing oilfields is taking place at more than twice the rate previously predicted and as a result a supply shortage is just around the corner, warned the International Energy Agency (IEA).
According the Agency’s latest assessment of more than 800 of the world’s largest oilfields, global demand is set to peak in 10 years, as opposed to in 20 years as previously thought.
The increasing shortage in tandem with the leading exporting countries failing to invest proportionally in exploration and production, and in alternative energy sources leaves the world facing the reality of oil taps drying up, and fast.
The report by the Paris-based intergovernmental organisation found that in fact production levels at the world’s leading fields has already peaked are now in decline.
The IEA estimates that the decline in crude production in existing fields is now running at 6.7% per annum, compared to the 3.7% per annum forecast back in 2007. The Agency readily acknowledges that its own estimations were wrong.
The combination of depleting levels of supplies and a falling rate of new reserves has the left the industry on a path towards a devastating ‘supply crunch’ that will cause an unprecedented spike in prices, and see a boost in political might of those countries exporting the remaining reserves.
Fatih Birol, lead economist with the IEA said that impending shortages both threaten world economic recovery and should worry western nations whose economies depend upon a higher level of oil than they currently produce
“One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day,” commented Birol – who is charged with the task of assessing future energy supplies by OECD Countries.
In an astonishing analogy Dr Birol said that even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias (the world’ leading producer of oil) to maintain production, and as many as six Saudi Arabia to keep up with the expected increase in demand between now and the year 2030.
So, what is Birol’s answer to this wide-reaching problem? “What we need to do is accelerate the mobilisation of renewables, energy efficiency and alternative transport.
“We have to do this for global warming reasons anyway, but the imminent energy crisis redoubled the imperative,” he said.