According to Abdalla Salem El-Badri, Secretary General of OPEC, world demand for oil in 2030 is likely to increase 25% to 106 million bpd from 84.2 million bpd in 2009. At the same time Dr Fatih Birol, the chief economist at the respected and conservative International Energy Agency (IEA) in Paris,warnsthat production from existing oil wells is declining at 6.7% per year so that by 2030 today’s existing wells will be producing only 24 million bpd. The supply-demand gap is therefore potentially huge -- as large as today's total oil consumption!
According to Dr. Birol, “even if demand remained steady, the world would have to find the equivalent of four Saudi Arabias to maintain production, and six Saudi Arabias if it is to keep up with the expected increase in demand between now and 2030.”
The likelihood of suddenly finding six Saudi Arabias worth of oil in the next few years is extremely remote to say the least.The good news is that this demand for energy is likely to drive a major effort in renewables and alternative energy sources. The bad news is that this same gap is also likely to trigger massive use of high intensity carbon-based energy such as coal-to-liquids, shale oil, tar sands, and ethanol -- anything we can get our hands on to burn. Since gThe most likely prospect is that the global economy will begin to stall from lack of energy to fuel its continuous growth, even as it did in 2008, 1990, 1979 and 1973. That economic contraction will dampen oil demand once again, but at the increasing price of national prosperity and social stability. It is already clearly evident that when the economy is hurting governments will ignore everything else, including climate change, to ease the pain of citizens in order to get re-elected.
But since every government in the world has already spent everything it has to try and climb out of this current recession and will be in serious debt for decades to come, when this next decline hits, maybe within the next five years, there there will be no more money for bailouts. Therefore we can expect crash programs around coal and the oil sands. Nuclear is too expensive, wind and solar just aren't scalable, and big hydro projects take too long to complete. Don't expect Russia to back down from the Arctic when the absence of ice makes drilling there feasible. Control of oil and gas will be real power, as the Russians have already demonstrated.
Our economy, our food supply, our very civilization depends on access to vast amounts of oil, by one measure approximately 1cubic mile of oil at today's consumption rates. That amount of energy is hard to fathom and so is the scale of the oil supply gap. Let me re-iterate, based on current estimates of production from existing wells, the supply gap will be larger than all the oil we will consume in 2009. Think about it. Is it really rational to think that we can develop new sources of oil or oil substitutes greater than our total production capacity today in just a few years? We are talking trillions and trillions of development costs. By comparison going to the moon was peanuts!
Talk about an impetus for radical change!