World oil supplies have passed the ‘tipping point’, according to Sir David King writing in today’s edition of peer-reviewed scientific journal Nature.
In the analysis of the oil market, the Oxford University academic and colleague James Murray of the University of Washington, suggest that oil supply reached a ceiling of economically affordable rates in 2005.
Since then, conventional crude oil production has stalled at 72-75 million barrels per day producing “unheralded” price spikes of between $40 and $140 per barrel.
The concept of ‘peak oil’ – that global production will reach or has reached a peak and then declines – is often discussed in terms of assessments of global reserves that can be extracted commercially.
But King and Murray argue that the concept can be misleading and that actual production records are more telling. Even though reported reserves appear to be increasing, the percentage available for production is decreasing.
“We are not running out of oil, but we are running out of oil that can be produced easily and cheaply,” state King and Murray.
The oil market appears increasingly unable to respond to rising demand, say the academics, and other fossil fuel resources don’t seem capable of making up the shortfall.
“There is less available fossil fuel than people think, but what really matters is the production rate,” write King and Murray. “The approaches needed for tackling the economic impacts of resource scarcity and climate change are the same: moving away from a dependence on fossil-fuel energy sources.”
Rising oil prices were a “major contributor” to the 2008 recession, argue the academics, and have added significantly to the Euro zone crisis.
Future oil prices rises are unlikely to be borne by the world economy, making the only option a move away from fossil fuels. That transformation, say the authors, needs to start immediately.
For further information:
J. Murray and D. King. Climate policy: Oil’s tipping point has passed. Nature 481, 433–435 (26 January 2012)
Subsidising fossil fuels costs twice as much as renewables (24-Jan)
Global CO2 emissions reach record levels (5-Dec 2011)
Deployment of renewables must be speeded up, says IEA (28-Nov 2011)
26 January 2012