The world will one day run out of oil, but that is of little concern to delegates at the World Petroleum Congress in Doha whose eyes are fixed on more crude discoveries and advances to prolong supplies. "To tell someone that he's going to die is not a prediction, it's a tautology. What he wants to know is when and how," Nasser al-Jaidah, chief executive of Qatar Petroleum International, said at the Congress.
According to calculations, the world's proven oil reserves based on BP figures were 1,383 billion barrels in late 2010, and the world burned 31.9 billion last year, meaning the taps should run dry by 2053. But drawing such a conclusion would be naive based on experience, with the same calculation in the year 2000 indicating that oil depletion would occur in 2040.
Once known reserves have gone, companies expect to be able to draw more oil from untouched parts of the globe including the Arctic, deep waters off Brazil, the Gulf of Mexico, Gulf of Guinea, East Africa and the sands of Canada. "You have to remember that huge parts of the world haven't been explored yet. Even in countries like Iran or Saudi Arabia," said Noe Van Hulst, the secretary general of the International Energy Forum.
In addition, the industry only knows at present how to extract 35 percent of a reservoir, but that could change with technological breakthroughs, he said. "Every percent more, that's two years of consumption." Before venturing to calculate a date for depletion, oil experts, industrialists and environmentalists are looking at the "peak oil" as the time when oil production will climax.
Abdullah El-Badri, the head of the Organisation of Petroleum Exporting Countries, said this was still a long way away. "Peak oil will come, but I don't see it in the foreseeable future," he said at the Congress. In Doha, Total's chief executive Christophe de Margerie said the French energy giant expects crude oil production to peak at 95 million barrels per day during the 2020s, compared with 82 million last year.
After that remains a "question mark," he conceded, while expressing optimism. "We have plenty of resources. The problem is not with resources, it is how to extract them, in an acceptable manner," he said. But as companies search deeper into areas that are increasingly inhospitable, using a technology that is getting more sophisticated, the cost of production shoots up. "It's the end of cheap oil," admitted de Margerie. Claude Landil, former director of the International Energy Agency (IEA), said that instead of "peak oil," people should be talking about "peak money."
"We have oil, we have gas, but we no longer have the money to get them," said the Paris-based expert. The IEA, the energy arm of developed countries, said necessary investments to meet demand for energy from now until 2035 amount to 38,000 billion dollars (27,700 billion euros).
In other words 1,500 billion each year, or 2.5 percent of global wealth. But supply is not the only problem. Driven by developing giants like China, India, Brazil, demand is expected to exceed 99 million barrels per day in 2035, according to the agency. Biofuels or gas turned into fuels should help, but the pressure on crude oil will be strong. Oil and gas, according to widely accepted scenarios, will continue to be the source for most of the world's energy for 20 to 30 years to come, close to their current 54 percent share.
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