Future of Petroleum
Olduvai Theory
Our century-old industrial civilization and its luxurious standard
of living may be about to end. The energy prime mover of this
civilization, oil, is about to drastically dwindle in supply.This dwindling oil supply in the face of escalating demand has
rocketed up the price of oil. Ted Trainer (1997) predicted large and
permanent increases in oil prices after the year 2000 due to increasing
scarcity. In fact in March 2008, oil broke through the psychological
ceiling of $100 a barrel, and later in early June rose to around $140
on the way to $150. Even the president of OPEC (Organization of
Petroleum Exporting Countries) has warned of oil reaching $200 a barrel
(Robertson, 2008). Goldman Sachs has announced that the $200 barrier
could be hit any time within the next two years (Foroohar, 2008).
Alexey Miller, head of the world’s largest energy company, the
Kremlin-owned gas giant Gazprom, has predicted that oil will reach $250
a barrel “in the foreseeable future” (Fortson, 2008). Ferris-Lay (2008)
has forecast that the black liquid gold could climb to an incredible
$300 a barrel in the foreseeable future. In the slightly longer term we
have been warned of an economically lethal price of $380 (Porter,
2005). The major cause for all these price hikes is the dwindling
supplies as oil reaches exhaustion point around the world.
It is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. The concept is based on the observed production rates of individual oil wells, and the combined production rate of a field of related