




Thanksgiving marked the day that some analysts thought global oil production would have reached its peak, ushering in a new era of fuel shortages.
These petro-pessimists were using the same formula as the one that accurately predicted the apex of U.S. oil production in 1970.
Matthew Simmons, author of “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy,” is one of them. He thinks Saudi Arabia has pumped much of its usable reserves and will start to experience production declines.
Even analysts who are more optimistic warn that chronically high prices and occasional supply crunches are likely in the years ahead. The world’s consumers are using up nearly all the oil being produced today, and the outlook for growth of supplies is uncertain.
“In terms of prices, I think the risk is … it’s going to explode,” Fatih Birol, chief economist at the International Energy Agency, told the Council on Foreign Relations in New York last week.
Mr. Birol thinks plenty of cheap oil remains to be discovered, but it lies mostly in politically volatile nations of the Middle East. He is hopeful that those countries will spend the billions of dollars needed to increase their supplies and satisfy the growing appetite for fuel.
“The bulk of the growth needs to come from very few … countries in the future, namely Saudi Arabia, Iran, Iraq, Kuwait” and the United Arab Emirates — the countries where the lion’s share of the world’s remaining oil reserves lie, he said.
Two of the top four producers — Iraq and Iran — are not expected to increase supplies any time soon.
Persistent sabotage of oil facilities in Iraq has cut production below the 2.5 million barrels per day produced before the U.S. invasion in March 2003. Meanwhile, a U.S.-led economic embargo has reduced investment in new oil facilities in Iran.
Saudi Arabia, the largest producer with the biggest reserves, plans to increase production to 12.5 million barrels a day from about 11 million today. Smaller Persian Gulf states also seek to expand output.
Mr. Birol said he is not sure these increases will satisfy rising world demand, especially as oil consumption grows rapidly in China, India and other developing nations.
The United States, the world’s biggest consumer, has done little to increase the fuel efficiency of its auto fleet, Mr. Birol said, and efforts to curb demand in other major consuming countries also has been elusive. This puts consuming countries on a collision course with supplier nations, he said.
Consumers are becoming more resistant to higher oil prices, he said, because they are increasingly dependent on cars, airplanes and other forms of petroleum-fueled transportation.
“There are no easy and economic alternatives,” he said. “This is a new era from the consuming countries’ point of view.”
Mr. Birol said the share of oil from the Middle East will increase to 44 percent from 35 percent by 2030 if countries in the region make all the investments needed to increase supplies.
View Entire StoryBy Julia A. Seymour
Planned Parenthood flap preceded by assault from anti-chemical activists

By Geir Moulson - Associated Press
updated 0 minutes ago
Germany’s president resigned Friday in a scandal over favors he allegedly received before becoming head ...

By Rich Campbell - The Washington Times
Imagine this: Peyton Manning coming out of the tunnel at FedEx Field this September, poised ...

By Rowan Scarborough - The Washington Times
When Lt. j.g. Timothy W. Dorsey fired his fighter jet’s missile at an Air Force ...
Independent voices from the TWT Communities

A politically conservative and morally liberal Hebrew alpha male hunts left-wing vipers.

You don’t have to be a super-parent to make baby happy. Get pointers on parenting tips to make life easier.

An inside look at the world highlighting not only green issues affecting us all, but everything from green travel to green technology.