Will We Ever Run Out Of Oil?
Forget about running out of oil. A Deutsche Bank analyst wrote: “The world will never run out of oil.” You are probably wondering why the analyst was able to make this prediction. The foremost reason is that we are becoming more efficient. This should keep prices in check at about $65.00 per barrel, down from this year’s $80.00 per barrel. The next question is how do you know that the world is becoming more efficient. The Energy Information Administration uses a metric called: “energy intensity.” Energy intensity measures the amount of oil used in relation to the size of the economy. US energy intensity dropped 2% a year, every year since the early 1980’s. Deutsche Bank expects it to drop to 3% as people buy more fuel efficient cars. This, coupled with only 2.5% growth, is keeping demand low. Actually, the US demand may have already peaked. US oil consumption peaked at 21 million barrels per day in 2005. Since then it dropped to 19 million bpd. The last time we saw such a big drop was 1979 — 1982. The US will not consume 21 million bpd until 2029. As for the Chinese economy, Addison Armstrong of Tradition Energy says that Chinese growth will slow in coming years, reducing oil demand. Add to this electric cars in China and oil demand will slack off instead of rising. Last year, spare oil supplies hit a low of 1 million bpd. Now that has jumped to 4 million bpd and will probably rise to 4.5 million bpd next year. Do you expect gas prices to fall next year? ((03 DEC 2009))
The gypsy woman employed at this blog says we will NEVER run out of oil.
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- January 25, 2011 / 5:05 pm