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Re.: Oil price: Nine reasons not
to panic, Ebner, Globe and Mail, Sat, May 28
Mr. Ebner's "Nine reasons not to panic" (sidebar in
Saturday's May 28 ROB) misrepresent the coming peak of
world oil production. After the peak, the world's yearly
production of oil will decrease forever, presenting huge
difficulties for the world economy. Surely this fact will
make it a turning point in human history and a valid object
for serious concern and planning, whether it happens in 2005
or 2036. Mr. Ebner uses uncertainty about the date of
occurrence of the peak to imply uncertainty about its
existence. I challenge Mr. Ebner to poll petroleum
geologists respected by their profession. I doubt he will
find any who deny the peak will occur in that range of
dates. I believe most will say it will occur early in the
range.
Mr. Ebner confuses the results of exploration for new fields
with reserve revision in existing fields. Oil discoveries
-- volumes of oil discovered by wildcat drilling for new
fields -- have decreased steadily and dramatically since the
1960s. We now find less than one barrel of oil for each
four barrels we burn. The decrease is not due solely to
reduced exploration. It applies equally to the yield per
wildcat drilled, which accounts for the reluctance of the
oil companies to explore. See the studies by Wood MacKenzie.
Mr. Ebner would like us to believe that large reserves imply
large production. That it's not so is the essence of
Hubbert's contribution. Mr. Ebner's assertion that we have
"sufficient reserves" for four decades at "current rates
of
usage" means the opposite of what Mr. Ebner thinks it means.
>It means that production will be lower than the current
rate of production for most of the next four decades, and
much lower long before the end of the four decades. Hubbert
taught us that it will take forever to produce (extract) the
totality of those "sufficient" reserves.
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