The Oil Peaks

Peak oil is approaching.© Getty Images

There is increasing evidence that the world has reached, or will soon reach, the worrisome condition known as peak oil (see "The Outlook on Oil," feature, January/February 2006). As Michael Klare reports in The Nation, such mainstream sources as the National Petroleum Council (NPC) and the International Energy Agency (IEA) are sounding the alarm about the difficulties of meeting the expanding petroleum demand. IEA predicts that world oil consumption will rise from 86 million barrels per day in 2007 to 96 million by 2012, driven in part by the voracious appetites of India and China. That oil will have to come mostly from increasingly unstable parts of the world, where there’s a reluctance to commit large investments. As NPC puts it, in a report co-authored by former ExxonMobil CEO Lee Raymond, "There are accumulating risks to continuing expansion of oil and natural gas production from the conventional sources relied upon historically." Adding to investor unease is the specter of global warming, which even without peak oil is making petroleum a risky long-term proposition. New findings show that the Greenland ice sheet is melting far more rapidly than was initially understood.