Demand answers 2

This Oil Drum post goes a long way toward explaining why oil prices have risen so sharply over the last couple of years. According to international oil agencies, global oil production has been fairly flat since the middle of 2004, even as economic growth around the globe has boosted demand. The chart below, derived from U.S. Energy Information Administration figures, shows OPEC production only, but world figures are much the same.

"The Oil Drum" OPEC oil production

Of course, the global petroleum system is so huge, and some production poorly enough tracked, that there's a lot of uncertainty in the graph above. But it's hard to escape the notion that high prices are being caused by actual global supply limitations, not by oil-company malfeasance or somesuch.

The potential that we're nearing some sort of production peak or plateau is something state and provincial transportation agencies, in particular, aren't facing squarely. There's still a presumption out there, even in the supposedly eco-friendly Pacific Northwest, that the big highway projects deemed smart in the 1950s will remain smart through 2050 -- a presumption that's harder and harder to justify.

Clark Williams-Derry is research director for the Seattle-based Sightline Institute, a nonprofit sustainability think tank working to promote smart solutions for the Pacific Northwest. He was formerly the webmaster for Grist.

Advertisement
Advertisement

  1. birdboy Posted 12:45 pm
    03 May 2006

    venting steam over oilIt seems that many of you are sick of this entire subject- I too am sick of all the posturing, and sick of all the excuses. But having not had my chance to vent (I've been busy watching Mother Earth- I mean, at my job), I'll take the liberty here- forgive me, or click the 'back' button. First, some truths-
    -supply is low precisely because it keeps prices high- not because of environmental restrictions (the EPA is powerless and the laws are uninforced) or NIMBY (just try to stop them)
    -it is NOT a 'free market' when the product is needed by every person who has a job and a family and when oil companies get huge subsidies, control the government, and are above the law
    -recent price increases are due to 'investor speculation', not the cost of MTBE-ethanol switching or even low supplies. Investors speculate they will get richer if they buy more stock, so prices go up
    I agree that we SHOULD pay more for gas, but the money should go for public transportation so we have some alternative to buying gas- instead, we are giving oil companies record profits.
    Taxing or fining oil companies will not bring prices down, but WOULD put some of that money back in the public domain, to pay for our (their) oil wars (if GOP stays in power) or public transportation (if GOOD people gain power)
    OK, I feel better.

    a liberal in redsville

    Permalink

  2. Mr M Posted 12:25 am
    05 May 2006

    it's America stupidI hate to burst your bubble but oil in America is actually cheap compared to the rest of the world.  In the UK by way of example the price is twice that of the US.  Americans love their oil; their politicians know this, and oil companies welcome it.  No-one in the US will tell you oil is cheap because that would reveal there is scope to INCREASE the price further for sound environmental returns; and no-one in the US is really interested in environmental outcomes at the expense of votes and lifestyle.

    Permalink

Add a Comment

You are not logged in. Thus, you cannot post a comment. If you have an account, log in. If you don't have an account, well, by all means go make one! Meet you back here in five.

Hello, Visitor!    Why not register?

Viewed
More
Commented
More
Advertisement