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"The future of oil and peak oil theory"

'Is the worldrunning out of oil?"

Introduction:

To say that an exhaustible resource will be exhausted is not a prediction but, under certain conditions, a tautology. The only qualification is that an exhaustible resource will not be exhausted if,for some reason, production ceases while reserves are still available.

Therefore, many theories were stated to predict the end of "fossil fuels era" and to forecast how fastthe world is turning itsback on oil

The statement that the production of crude oil, an exhaustible resource, will reach a peak will not be entirely a tautology if it also told us something about the production pattern over time; something that is not necessarily implied in the exhaustibility concept. The peak story tells us, indeed, that after rising over years, decades or centuries, production will enter a phase of decline. The peak could take different shapes,however. It could appear as the apex of an acute angle orstretch out over a long period in the form of a plateau oremerge more than once in the shape of a saddle or as a chain of dunes.In short, it is not sufficient to say that an exhaustible resource will be eventually exhausted and that its production will decline until extinction after reaching a peak. These are not predictions. Such statements are of no interest whatsoever unless we are told the dates at which the peak will be reached, and the likely shape of the production curve before and after thepeak a terminal decline is expected.

Recently about 60% of oil is used in transportation, which is also where the biggest technical developments are occurring. The rapid rise of electric carmakers such as Tesla Inc. and China’s BYD could be turbocharged by advances in related fields such as self-driving vehicles and ride-hailing apps, which make it possible for people to switch from owning cars to relying on rides from more efficient fleets.

The culmination of these trends could transform how people travel and prompt more revisions to forecasts for when oil consumption will peak.Even Aramco, which used to downplay the prospect of peak oil demand, cited it as a risk factor in the prospectus for its 2019 initial public offering.

The peak oil concept then:

(the principle peak oil theory-1956)

Peak oil is the year when the maximum rate of extraction of oil is reached, after which it is expected to enter terminal decline.

The concept of peak oil is often credited to the Royal Dutch Shell Plc geologist M. King Hubbert whose 1956 paper first presented a formal theory. Peak coalwas in 2013 and peak oil is forecast to occur before peak gas. when M. King Hubbert, predicted that U.S. oil production would crest in the 1970s and the world would physically run out of oil.

That has not happened, and new discoveries and efficiency gains at existing fields mean oil supplies will abound for a long time to come.

The authors and promoters of the peak oil theory clearly understand that a prediction must relate to the date at which the relevant event –the production peak –will occur. They did indeed stick their necks out and told us once that the peak will be reached in the late 1980s, then in 2000, then in 2005. They proved to be wrong on all occasions. World oil production is still rising year after year.

One major reason for their propensity to bring forward the dreaded event seems to be an eschatological inclination. Consciously or sub-consciously they are inclined to predict the end of a world economy that was fuele dby cheap oil over several decades. They also want to catch the headlines. For these reasons they need to predict an early peak. To tell us, for example, that oil production will peak in 2030 and oil resources be fully exhausted by2080 would have little impact. The prediction has tobe about an imminent event.

The peak oil concept nowadays:

The peak oil that istalked about today is quite different from the concept that emerged in the 1950s, when M. King Hubbert, predicted that U.S. oil production would crest in the 1970s and the world would physically run out of oil.

That has not happened, and new discoveries and efficiency gainsat existing fields mean oil supplies will abound for a long time to come.

The discussion has shifted to peak demand --whether people will simply use less petroleum, and reserves that are considered valuable today will wind up being left in the ground.Forecasts for long-term oil demand have been coming down.The International Energy Agency, which advises countries on policies, now expects that consumption will hit a plateau around 2030 amid the use of more efficient car engines and electric vehicles

Renewable energy is taking off, electric companies are switching to cleaner-burning natural gas, and the cost of solar power has fallen 50% in a decade.That is upending the business model of utilities, which were designed to deliver fossil-fuel energy from large power plants to homes and businesses.

Oil companies’points of view:

Many see a peak around 2040. Others, including Exxon Mobil and Aramco, say their industry will enjoy decades of growth as it feeds the energy needs of the world’s expanding middle class.

But state-owned Saudi Aramco, citing external research from IHS Markit, also acknowledged the possibility of a peak within the next two decades in the prospectus for its IPO, which was expected to be the largest in history.OPEC, the cartel dominated by Middle East producers, projects that consumption will continue to increase for at least another two decades. And when the need for oil does peak, it is likely to plateau rather than fall steeply.The difference in predictions is because there isa lively debate about how rapidly electric vehicles will catch on. Falling costs for batteries could make them as affordable as internal combustion engine cars over the next 10 years, according to Bloomberg New Energy Finance.

Meanwhile, some of the world’s largest auto markets plan to phase out vehicles powered by fossil fuels to clean up dirty air We must also put in our consideration, what will happen to countries that depend on oil revenueas itis a big unknown. Peak oil could cause political turm oil in so-called that rely on oil revenue to keep government finances afloat.

As a conclusion we must accept as evident that unless world oil demand collapses in a significant way a peak of some shape will inevitably obtain, and to realize that only by recognizing the true scope of ongoing challenges and addressing the implications of the industry by offering leadership on solutions it can continue to prosper in an increasingly complex world.