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Peak Oil - 2000-2004

High oil prices defer concerns about oil supply, and thus the major concerns relating to geopolitical competition for oil imports. High prices diminish concerns scenarios of Chinese and Western strategic competition for sources of oil imports. High oil prices enable increases in non-OPEC production capacity, mainly from ultra-deep (greater than 1,400 m deep) underwater exploration in the North Sea, the Caspian Sea, the Gulf of Guinea, and the Gulf of Mexico.

The Energy Information Administration (EIA) is an independent statistical and analytical agency within the Department of Energy. It is charged with providing objective, timely, and relevant data, analysis, and projections for the use of Congress, the Administration, and the public. It does not take positions on policy issues, but produces data, analysis, and forecasts that are meant to assist policy makers in their energy policy deliberations.

Because EIA has an element of statutory independence with respect to the analyses, its views are strictly those of EIA and should not be construed as representing those of the Department of Energy or the Administration. However, EIA's baseline projections on energy trends are widely used by government agencies, the private sector, and academia for their own energy analyses.

In 1956, geophysicist M. King Hubbert -- then working at the Shell research lab in Houston -- predicted that US oil production would reach its highest level in the early 1970s. Though roundly criticized by oil experts and economists, Hubbert's prediction came true in 1971. The hundred-year period during which most of the world's oil was discovered became known as Hubbert's peak.

In 2000 peak production years were estimated by EIA using a relatively simple algorithm. The peak production year estimates ranged from 2021 to 2112 across the 12 scenarios. For example, using the USGS mean (expected) resource base estimate (3,003 billion barrels) and an annual production growth rate of 2 percent (similar to the current rate), the estimated peak production year is 2037.

Some analysts now believe that a peak in world oil production was at hand. Eminent oil geologist Kenneth Deffeyes, for instance, predicted in 2001 that global oil production would peak sometime between 2004 and 2008. Pessimists argue that new exploration and production technologies won't help. While long-term solutions exist in the form of conservation and alternative energy sources, pessimists feared that they may not be enacted in time to evade short-term catastrophe.

The EIA Annual Energy Outlook 2003 predicted business as usual through 2025, with possible peak production in 2037. The European Community in 2001 foresaw no problem through 2025. The CIA in 2002 anticipated a peak in 2025, though this was not widely reported. Although Hubbert's Peak did exibit logistic curve [bell curve] in the US, there is no geophysical or physical reason for production to follow a symetrical logistic curve in declining production. The Annual Energy Outlook 2007, released by the US Energy Information Administration in February 2007, predicted slight declines in total oil production by 2030, contingent on price scenarios and the introduction of non-conventional oil sources.




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