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Last week a report from the Peal Oil Group, a recently established industrial taskforce, received broad attention in Britain where it was run in at least 130 newspapers. The report warns that the declining availability of oil will hit the UK earlier than generally expected, possibly as early as 2011.
In a Guardian OpEd discussing the report, the Group’s Chairman, Jeremy Leggett, said “Today, eight British companies are warning of a ruinous oil crunch five years from now. We warn that the global peak of oil production will arrive unexpectedly early, resulting in not just a global energy crisis, but potentially the withholding of exports by oil producers and energy famine in oil-importing countries. Previously unimaginable policy interventions in financial markets have suddenly become imperative, and similar interventions in energy markets today may be worth their weight in gold tomorrow, in terms of economic and social damage avoided, especially as this would also help tackle climate change.”
“The prevailing oil industry view, echoed by the government, is that there are well over a trillion barrels of proved reserves, and several trillions more in tar sands. In a world burning just over 30 billion barrels a year that means decades of supply before we need worry. But peak oil happens when flow-rate capacity coming on-stream from oil discoveries fails to exceed declining flow-rate capacity from depletion of existing reserves. Peak oil is as much a problem of flow rates as it is of reserves. In our report, the consulting editor of Petroleum Review – a flagship oil-industry journal – shows how the flow rates from reported discoveries will drop below depletion rates no later than 2013, and possibly a good deal earlier.”