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"The End of Cheap Oil"

by Colin J. Campbell and Jean H. Laherrère, Scientific American, March 1998, pp. 78-85.

Jean H. Laherrère provides detailed information at http://www.oilcrisis.com/laherrere Also check out the home page, http://www.oilcrisis.com/

Colin Campbell has recently written a book, The Coming Oil Crisis,
1999, Multi-Science Publishing Co. Ltd, Essex, U.K., softcover, 210 pages.

This fascinating article forecasts that the decline of oil production will happen sooner than most people think. The authors draw upon their experience and data from Petroconsultants in Geneva.

Their "analysis of the discovery and production of oil fields around the world suggests that within the next decade, the supply of conventional oil will be unable to keep up with demand." This is in contrast the reports sustaining reserve additions. The two key factors are:

Most reserve additions are due to improved recovery from new technology. Newer technologies will be important to recovering new oil from old fields. However, these reserve additions are most often more expensive.
In the 1990s oil companies discovered about 7 billion barrels of oil each year.
In 1997 we produced about three times as much.

This is, I think, a very important idea. Low-cost fossil fuels have been feeding the engine of the economy. So long as greenhouse effect concerns to not lead to burning restrictions, diminishing resources should be bullish for oil prices.

"Unless alternatives to crude oil quickly prove themselves, the market share of the OPEC states in the Middle East will rise rapidly. Within two years, these nations' share of the global oil business will pass 30 percent, nearing the level reached during the oil-price shocks of the 1970s."

Other articles in the "Preventing the Next Oil Crunch" Special Report in this issue of SA include:

"Mining for Oil"
"Oil Production in the 21st Century," and
"Liquid Fuels from Natural Gas."

—John Schuyler, March 1998. Revised June 1999