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The recent sharp increases in petrol prices highlight the fact that the demand for oil is starting to exceed supply. Some experts say that global production of oil has already peaked whilst most others say it will peak in the next 10-20 years.
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Peak oil
‘Peak oil’ is a term that denotes the point in time when half of all the world’s oil reserves will have been used. At that point in time production and supply will decrease and demand and prices will increase.
Oil discoveries peaked in the USA in the 1930’s and US oil production peaked in 1970 and has halved since then.
Global oil discoveries peaked in 1963. Experts can’t agree on when global peak oil production will occur – there are some who believe it already has – but it is likely to be in the next few decades.
It might seem that running out of oil will be a good thing for the environment but the fact is there is more than enough oil left to push global temperatures into the greenhouse danger zone.
Also the current alternatives to oil – from hydrogen fuel cells to home heating and cooking – will require the production of an enormous amount of electricity. For this the world would need to look to a mix of coal, nuclear and renewable electricity generation. The relative investment in each of these options will be a critical factor in combating climate change.
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