Peak Oil Is Finally Here
By Morgan House
August 5, 2013
Peak oil is here, writes The Economist.
But not the peak oil you're thinking of, where supplies dwindle and prices march inevitably higher. That's so 2008. This is peak oil demand, and it could hit in the next few years.
We believe that demand, not supply, could decline. In the rich world oil demand has already peaked: it has fallen since 2005. Even allowing for all those new drivers in Beijing and Delhi, two revolutions in technology will dampen the world's thirst for the black stuff.
The first revolution was led by a Texan who has just died (see article). George Mitchell championed "fracking" as a way to release huge supplies of "unconventional" gas from shale beds.
... The other great change is in automotive technology. Rapid advances in engine and vehicle design also threaten oil's dominance. Foremost is the efficiency of the internal-combustion engine itself.
Petrol and diesel engines are becoming ever more frugal. The materials used to make cars are getting lighter and stronger. The growing popularity of electric and hybrid cars, as well as vehicles powered by natural gas or hydrogen fuel cells, will also have an effect on demand for oil.
The last time domestic oil production was as high as it was in May (about 7.5 million barrels per day), current college seniors weren't yet alive:
|Source: Energy Information Agency. Assumes 30 days per month.|