Massive new finds of oil in the Western Hemisphere and Africa, unconventional oil reserves in Canada and Venezueala, and new technology's ability to get more oil out of old, depleted fields are just some of the reasons why Peak Oil is now thought to be decades away rather than years.
Daniel Yergin, the author of both The Prize and The Quest, states that 1 trillion barrels of oil have been produced by the oil industry since its birth, that 5 trillion barrels are in the ground, of which 1.4 trillion are recoverable technically and economically at today's prices and with today's technology. He for one predicts an oil "plateau" around mid-century.
Even in the USA oil production since 2008 has been increasing and now is up 10%. This is a major reversal.
Joined with large increases in biofuels and lower oil consumption driven by rising efficiency, the growing US production has driven down net oil imports from 60% of total oil consumed here to 47%, according to the Energy Information Administration. This is big, good and so little discussed news.
We have begun the journey to oil independence and need to finish the trip rapidly.
Just look at the Bakken field in North Dakota for a demonstration of why US oil production is up.
In 2003 Bakken ,000 barrels per day but is now at 400,000 barrels per day. The USA consumes about 19 million barrels per day so Bakken provides 2% of USA consumption.
Another way to measure Bakken alone is to compare it to our oil imports. Net oil imports are a bit more than 9 million barrels per day so that Bakken is equal to about 4% of our imports.
Bakken is not alone by any means in the tight oil field category, and tight oil field production in the USA may reach 2 million barrels per day. Exploration is underway in Ohio as one example of likely new oil production.
Global production capacity is now 92 million barrels per day in 2010 and growing. Fierce debates erupt over how much capacity can or will grow. Yergin believes production grows to over 110 million per day by 2030.
Does the rising world production of oil mean low prices ahead or that the world has inexhaustible supplies? No to both.
Most of the new oil that is being found or produced from unconventional sources is much more expensive than the Saudi oil fields. Generally an oil price of about $80 per barrel is needed to recover costs at the most expensive, deep water finds.
And while world oil production is growing, world oil demand is growing more rapidly. John Hoffmeister, the retired head of Shell North America, believes world oil demand could jump 10 million barrels per day by 2015.
China consumes 9 million barrels of oil per day and may reach 15 million by 2015. India is at 6 million and could be at 9 million by 2015. The rest of the world may add another 1 million barrels per day by 2015. All oil demand growth will likely be outside Europe and North America.
Absent a global recession or depression, world oil markets are going to be tight over the next 5 years, with prices higher than lower. In the modern world, the way to low prices, like the $30 per barrel in December 2008, is ruin or depression.
High oil prices are economically damaging but low prices signal economic collapse because petroleum remains the dominant global energy fuel. Every day America delays moving to natural gas, electrricity, efficiency, and domestic production to replace foreign oil puts America's economy and environment at more risk.