There’s lots of oil left, just not enough for everyone

Primer: Oil Price Rise Fails to Open Tap

Mother Jones has an interesting read on the future — or lack thereof — of petroleum. The coming crisis isn’t about ‘Peak Oil,’ it’s a simple case of high demand vs. low supply — more people want more oil but less is being found and produced:

Energy of all sorts was once hugely abundant, making possible the worldwide economic expansion of the past six decades. This expansion benefited the United States above all—along with its “First World” allies in Europe and the Pacific. Recently, however, a select group of former “Third World” countries—China and India in particular—have sought to participate in this energy bonanza by industrializing their economies and selling a wide range of goods to international markets. This, in turn, has led to an unprecedented spurt in global energy consumption—a 47% rise in the past 20 years alone, according to the U.S. Department of Energy (DoE).

An increase of this sort would not be a matter of deep anxiety if the world’s primary energy suppliers were capable of producing the needed additional fuels. Instead, we face a frightening reality: a marked slowdown in the expansion of global energy supplies just as demand rises precipitously. These supplies are not exactly disappearing—though that will occur sooner or later—but they are not growing fast enough to satisfy soaring global demand.

If gas prices are $4 right now, I wonder what they’d be in a real supply crunch. No worries says the DoE, we’re not going to face one because future global demand will sync with supply — exactly:

The U.S. Department of Energy claims that world oil demand, expected to reach 117.6 million barrels per day in 2030, will be matched by a supply that—miracle of miracles—will hit exactly 117.7 million barrels (including petroleum liquids derived from allied substances like natural gas and Canadian tar sands) at the same time.

Meanwhile back in the real world:

Most energy professionals, however, consider this estimate highly unrealistic. “One hundred million barrels is now in my view an optimistic case,” the CEO of Total, Christophe de Margerie, typically told a London oil conference in October 2007. “It is not my view; it is the industry view, or the view of those who like to speak clearly, honestly, and [are] not just trying to please people.”

Similarly, the authors of the Medium-Term Oil Market Report, published in July 2007 by the International Energy Agency, an affiliate of the OECD, concluded that world oil output might hit 96 million barrels per day by 2012, but was unlikely to go much beyond that as a dearth of new discoveries made future growth impossible.

Just so we’re all on the same page, the oil industry is telling us, in surprising unison, that there is going to be an increasing gap between supply and demand in the years ahead. I don’t suppose this realization — or the current $4 prices — would serve as some type of impetus towards rolling out alternative fueled vehicles and sophisticated mass transit systems?

See also:

+ Peal oil inbound; watcha gunna do?

+ Oil prices at ‘threshold’ of civil disturbances

+ Cheaper than a latte…for now