Tuesday, April 19, 2005

Oil depletion explained

Oil depletion is not a very sexy topic. But it is the basis for peak oil theory. It also shines a light on why major government energy forecasters such as the U. S. Energy Information Administration and the International Energy Agency have failed to forecast world demand for oil properly. Basically, it comes down to this, according Chris Skrebowski, editor of Britain's Petroleum Review: No oil company or oil producing country is eager to publicize that they are running low on oil. They focus on their successes and on new fields opening up. But, when a country can no longer supply its own oil needs, it must turn to the world market. The reason for the lack of internal supply is most often depletion.

Energy forecasters, however, often fail to take account of that depletion and the demands it places on the international oil markets. With time this type of depletion will become greater and greater. It's the kind that leads ultimately to a worldwide decline in oil production.

Skrebowski who compiles the Oilfield Megaprojects Report for Petroleum Review is not sanguine about future supplies of oil.

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