August 3, 2009

Report: Oil reserves less than estimated

World oil supplies will pass their peak production sooner than expected, creating conditions for a global energy catastrophe, a French energy economist says.

Higher crude prices brought on by sharply growing demand, coupled with a stagnation or decline in supply, could shove any recovery off-course, said Fatih Birol, chief economist at the International Energy Agency in Paris.

Birol told The Independent that the public and many governments are ignoring reports that the oil is running out faster than predicted. Birol said global production likely will peak in about a decade, 10 years sooner than most governments have estimated.

In an assessment of more than 800 oil fields in the world, Birol found most of the biggest fields already have peaked, and the rate of decline in oil production is running at nearly twice the pace calculated just two years ago, the newspaper said.

In addition, chronic under-investment by oil-producing countries likely will result in an oil crunch within the next five years, jeopardizing any hope of a recovery from the global economic recession, Birol said.

One day we will run out of oil. It is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day, Birol said. The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously.