NEW ORLEANS, La. – Shell Oil Company’s latest research, “Signals and Signposts”, asserts compelling evidence for peak oil theory: that we have reached maximum worldwide petroleum extraction. In response to the inferred terminal decline in petroleum production, the report’s authors recommend swift utilization of alternative energy sources.
“The world is entering an era of volatile transitions and intensified economic cycles,” states the Shell Scenario Team, authors of the study. “By the end of the coming decade, growth in the production of easily accessible oil and gas will not match the projected rate of demand growth.”
A 2010 U.S. military report reached a similar conclusion – that “by 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 [million barrels per day].”
If correct, these reports paint a bleak outlook for the 10,000 Louisiana residents employed directly by the oil and gas industry. And the implications of peak oil stretch well beyond the Gulf Coast.
Robert Bradley, founder and chairman of the Institute for Energy Research, dismisses such fears. He believes governmental restrictions account for oil supply problems, not barriers of nature or entrepreneurship. Oil-rich countries such as Saudi Arabia, Venezuela, and Libya typify his caricature.
“As far as reaching physical peak, a lot of times you’re thinking of crude oil, but if you think of oil more broadly, such as unconventional oil found in the Alberta tar sands. Then the resource base becomes much greater,” says Bradley.
Dr. Walter Block, a Loyola University economics professor, laughs off peak oil claims.
“We’ll never run out of anything… When supply of something gets short, prices will rise, which will call forth less demand for whatever it is, such as energy from oil, more money spent on finding oil, digging deeper for it both on land in and the sea, and more use of substitutes such as coal and nuclear energy, and, yes, also, sun, water, wind, etc.”
Karen Matusic, media relations adviser for Exxon Mobil, the worlds largest refiner of oil, says they disagree with the vast majority of peak oil theories. She cites a United States Geological Survey study, which asserts that to date only ⅓ of the Earth’s conventional oil has been extracted.
Shell’s recommendation to embrace alternative energy comes as solar specialists claim industry momentum. For example, Edward Koot, CEO of SolarPlaza, recently said the worldwide solar industry had grown 90 percent in 2010 alone.
Inventor Dr. Ray Kurzweil agrees, claiming the solar industry has experienced exponential growth for the last 20 years, and that in 20 more years solar will be our primary energy source. While he affirms that solar energy is currently more expensive than fossil fuels, “The costs are coming down rapidly — we are only a few years away from parity.“
The trend towards a solar based economy can be seen in recent developments in Saudi Arabia, the world’s largest oil exporter. The Middle East nation has contracted with South Korea’s KCC Corp to build a $1.6 billion facility to manufacture polysilicon, a material that converts sunlight into electricity.
Shell: We have passed maximum global oil production (peak oil)
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