World demand for oil is rising, and we will reach a point when oil supply will peak, and oil demand outstrips the annual supply. Whether that peak occurs in 2007, 2008, 2014, or the optimists version, 2020, it will happen. And our society is dependent upon oil (petrol, plastic gloves in hospitals, oil-based paint, oil-based fertiliser for agriculture).
Conventional oil reserves are now declining about 4-6% a year worldwide.
18 large oil-producing countries, including Britain, and 32 smaller ones, have declining production; Denmark, Malaysia, Brunei, China, Mexico and India will all reach their peak in the next few years. World oil demand is surging. Oil demand rose faster in 2004 than in any year since 1976. If world demand continues to grow at 2% a year, then almost 160m barrels a day will need to be extracted in 2035, twice as much as today.
According to industry consultants IHS Energy, 90% of all known reserves are now in production, suggesting that few major discoveries remain to be made. Oil supply is increasingly limited to a few giant fields, with 10% of all production coming from just four fields and 80% from fields discovered before 1970. Even finding a field the size of Ghawar in Saudi Arabia, by far the world's largest, would only meet world demand for about 10 years.
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