Business Trends

Peak Oil Reality: Industry Experts Warn About Looming World Oil Supply Constraints

In Uncategorized on November 24, 2009 at 9:48 pm

Groups and individuals speaking out about forthcoming world oil supply challenges are frequently stereotyped as a fringe element with little knowledge about the oil industry. But their warnings are increasingly supported by some surprising allies: senior petroleum industry officials, consultants and analysts. Call these serious-minded critics the Harsh Realists.

Most prominent are CEO’s from several large oil companies. Christophe de Margerie, CEO of France’s Total SA, said earlier this year, “world oil production may plateau below 90 million barrels a day (mb/day)” — marginally more supply than today’s 85 mb/day rate. Last month, CEO’s James Mulva (ConocoPhillips) and John Hess (Hess Corp.), sounded similar warnings, though with less specificity about the numbers, at the Oil & Money Conference in London. At ASPO-USA’s October conference in Denver, Ray Leonard, CEO of Hyperdynamics Corp., said, “world oil was nearing peak oil at 90 mb/day, and that isn’t changed by recent events.”

During September, ASPO-USA representatives interviewed numerous oil industry experts from the UK, Ireland and the Middle East. Links to those online videos are below. Featured is Sadad al Husseini, former exploration and production VP with Saudi Aramco and currently a consultant. Said Husseini, “There is not enough new capacity coming on line, within say the next five to six years, to make up for global declines. And that’s assuming a very moderate level of declines.” For groups that remain in fundamental denial about upcoming world oil supply constraints, Husseini said, ” these centers of information or knowledge that try to pacify people — telling them there is no challenge, with good intentions — are probably compromising the solutions. They’re not helping.”

Talisman Energy’s former CEO James Buckee wonders why major oil companies “aren’t more forthcoming on the peak oil issue.” He then opines, “if Exxon were to come out [about peak oil], it would be world-shaking, and political, and maybe they don’t want to go there.”

Jeremy Gilbert, former Chief Petroleum Engineer with BP and now a consultant, stated “I find it hard to believe that the [oil] companies cannot see that the exploration record suggests that there’s a real problem with new discoveries.”

Jeremy Leggett, former petroleum geologist and lead author of the UK’s Industry Task Force on Peak Oil and Energy Security, worries that “we’re dealing with dysfunctional culture in the energy industry in the same way the world had to deal with the really dysfunctional culture in the investment banking community. It’s different [from the financial crisis] in that this time, there are many people warning. Many people in and around the oil industry…But most governments are not listening.”

Related links

IBISWorld industry reports:

Oil Drilling & Gas Extraction in the U.S.
Global Oil and Gas Exploration and Production
Mining, Oil & Gas Machinery Manufacturing
World Production – Oil
World Price – Energy – Crude Oil

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