AmerCon : Energy / Oil / ASPO 2004 Scenario

Energy / Oil / The ASPO 2004 Scenario

The graphics below (from the Association for the study of Peak Oil&GAS) are updated
annually and reflect the most current (2004) assessments of oil and gas proven reserves, past
and estimated future production rates, and calculated worldwide oil and gas liquids demand.

The world currently consumes 30 billion barrels of oil per year, and this will likely peak at 32
billion barrels per year in 2008. After that, production must decline.

The time to be planning for alternatives to oil and gas is now.

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Note that these graphics are based on the proven reserves estimates reported by individual
nations. The Department of Energy maintains a current file of reported world oil reserves
estimates here.

The accuracy of the ASPO graphics (above) depicting 2008 as the year of PeakOil is
complicated by the possibility that some nations may be over-reporting their proven reserves
(see here). They have considerable incentive to do so.

Note also that the age of aggressive oil exploration is over. In the past decade, the
percentage of major oil companies' exploration-and-production budget that has gone to
exploration has dropped to about 12% from about 30%.

Given the strategic importance of uninterrupted energy supplies in the United States and the
world, I would encourage additional focus of intelligence and engineering assets to this
problem. There's probably no single piece of information that is more important to
the world than knowing how much oil remains under the world's crust -- and how
much time remains before we must have an alternative.

And I would move aggressively to build a nationwide energy infrastructure that would survive a
conservative reading of these graphics. The numbers regarding proven oil reserves and
these graphics merely depict the likely existence of remaining oil and a possible production
rate. They say nothing about anyone's willingness to actually harvest their dwindling reserves,
or sell oil and gas to us, or at what price.

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Oil production is either reaching a plateau or declining in 33 of the 48 major
oil-producing countries, including six of the 11 OPEC countries.

                                        Michael Rodgers, Senior Director
                                        PFC Energy
                                        Paris-based International Energy Agency

Despite the fact that we're in the highest oil-price era, the level of exploration is not
increasing. The reason it's not increasing is that, in so many regions of the world, the
fields have gotten so small that even though you might be able to drill a well and get a
positive rate of return, the incremental value doesn't mean a lot."

                                                 Michael Rodgers, Senior Director
                                                 PFC Energy
                                                 Paris-based International Energy Agency