What is peak oil?

Did you know that we will reach a point where world oil production reaches a peak and begins declining?  What impact will the decreasing quantity of oil discovered have while demand continues to rise?  What happens if peak oil is now?  Should Bermudians be concerned?

At one point in time, the United States was a relatively major producer of oil.  That was up until the 1970s when production peaked and began to decline, which coincided with the 1973 oil embargo to create an oil crisis.  Luckily things changed over time and other sources of oil production were ramped up to compensate.  Unfortunately, what we are now reaching is a global peak in oil production.

Production of US 48, Alaska, and North Sea

 

Aren’t we continuing to discover oil?  Well yes, we are.  Though quantity discovered is a major factor.  Each year, less and less oil is being discovered as we reached a peak for oil discoveries back in the 60’s.

Oil Discoveries

 

What of demand from rapidly developing countries like India and China who’s thirst for energy is increasingly growing?   If demand continues to rise but production stalls, what impact will that have?  Will prices skyrocket?

Future world oil production - three possible scenarios

 

Here’s the key question every Bermudian should be asking themselves.  How do we generate our electricity?   The answer?We burn diesel fuel. 

 

Source:

What Is Peak Oil

Gail Tverberg
Our Finite World, 12:41pm AST, Aug 3rd, 2007

http://gailtheactuary.wordpress.com/2007/07/16/what-is-peak-oil/

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