Sunday, July 17, 2005

Exxon/Mobil and the oil peak

It's one thing for a bunch of lunatic fringe people to talk about oil production peaking. It's yet another thing for serious minded people like a large oil corporation to talk about it. At least that's the tone of this article in the Bulletin of the Atomic Scientists

Oil: Caveat empty (By Alfred J. Cavallo, May/June 2005 pp. 16-18 (vol. 61, no. 03) © 2005 Bulletin of the Atomic Scientists)

The article discusses this report: The Outlook for Energy: a 2030 view

Basically Exxon/Mobil are admitting, in a very quiet and understated way, that oil production will not be able to meet demand. Their proposed solution? Greater efficiency.

The figures in the Exxon/Mobil presentation are that demand is going to keep growing in all energy sectors ... that the wind and solar alternatives are just beginning to make a measurable amount of energy (that is, make enough energy that they show up as more than an asterisk in a footnote) ... and that efficient automobiles will "produce" enough oil to make up for the shortfalls in production.

That last point is stated a little backwards. This is related to the "negawatt" concept. A negawatt is electricity production that does not have to be built because the customers use less electricity.

Likewise when the customers buy fuel efficient cars, then less oil has to be produced. In Exxon/Mobil-speak, the demand growth curve is flattened some due to efficient cars.