Wednesday, October 29, 2008
oil production falling away faster than forecast
Output from the world’s oilfields is declining faster than previously thought, the first authoritative public study of the biggest fields shows.
Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent, the International Energy Agency says in its annual report, the World Energy Outlook, a draft of which has been obtained by the Financial Times.
The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed. ...
The agency says even with investment, the annual rate of output decline is 6.4 per cent.
The decline will not necessarily be felt in the next few years because demand is slowing down, but with the expected slowdown in investment the eventual effect will be magnified, oil executives say. ...
“The future rate of decline in output from producing oilfields as they mature is the single most important determinant of the amount of new capacity that will need to be built globally to meet demand,” the IEA says.
The watchdog warned that the world needed to make a “significant increase in future investments just to maintain the current level of production”.
oil executives themselves have been commenting on the decline of major oil fields and confirming that oil production has peaked. with rates of discovery fading away in spite of american efforts to secure new avenues of exploration, the likelihood of new major fields to replace the dying is miniscule -- and the fallout for oil importers could be upon us quickly even if depression curbs demand in the west.
in the end, new technologies will be required to sustain energy throughput and transition away from oil. let's hope breakthroughs manifest in spite of what may be a difficult economic period for research and development.