Global Economy Threatened As World Oil Production Stalls For Seventh Year

ASPO | An array of energy experts gathered in front of the headquarters for the U.S. Department of Energy (DOE) today to criticize the agency for what they called “dangerously unrealistic” oil and natural gas production forecasts. Calling for "truth in energy," they delivered a letter to Secretary of Energy Steven Chu seeking greater transparency in how the agency formulates its energy projections and urging development of a plan to address the growing possibility of near-term oil supply disruptions and persistent, long-term oil shortages.

“Despite rising demand and a large increase in oil prices, world oil supply has been on a plateau; it has stayed relatively constant since 2005,” said Robert L. Hirsch, co-author of The Impending World Energy Mess. “Simultaneously, production from existing world oil fields is declining at a high rate. Both of these developments are unprecedented, yet DOE and EIA [Energy Information Administration] have dismissed them as not being of major concern.”

Hirsch added, “Many oil production analysts believe that in a relatively few years, total world oil production will go into decline. That may sound like we have time to react, but our 2005 study for the DOE clearly demonstrated that we now have essentially no time to effectively react. This is because of the huge amount of oil consumed worldwide and the fact that a relatively few percent oil production decline will be difficult, expensive and time-consuming to make up.”

“The Department of Energy’s optimistic forecasts for future supply are dangerously unrealistic,” said Jim Baldauf, president and co-founder of the Association for the Study of Peak Oil & Gas-USA (ASPO-USA). “The risk/benefit ratio is out of balance. If these exuberant predictions are wrong, the consequences could be catastrophic. We need to be conservative in planning for the future. We can’t bet America’s economy and national security on Pollyanna predictions.” Baldauf added, “We are not running out of oil. But we appear to be running out of oil that we can afford.”