Friday, 1 July 2011

Demand for Oil - at any cost

I've been preparing a talk about our dependency on oil for a Sciscreen talk introducing the film Syriana (http://www.facebook.com/SciScreen). I thought I knew all about this stuff but I was still  shocked at some of the statistics I found. For example, this graph showing hardly a dent in our inexorable increase in demand, almost entirely independent of the price (data from BP).

Only about 2/3 of the oil is used for transport -- but transport usage is growing, both for personal use and freight. The other worrying figures I found were that from 2003 to 2008 spare capacity was rarely more than 2 million barrels a day, which is less than 3% of demand, and most of that was in Saudi Arabia (EIA). Also, 'discretionary' oil stocks which can be sold onto the markets when supply isn't quite keeping up with demand, amount to only about 1 billion barrels which is only about 11 days worth. No wonder the oil price goes up and down like a yo-yo!

If the price stays high then that makes more oil fields economic to exploit, including deep sea fields, Antarctica, sticky tar sands and shale oil. I hope we remember to count the environmental cost too.


References:
BP: statistical review of world energy 2010 BP
EIA Stocks
EIA What Drives Crude Oil Prices

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