The IHT proposed on December 9th an interesting article on the future of the oil market which brings even more gloomy prospects.
The article strongly reinforces my opinion that we (France, Europe, the entire world…) should work fast on energy efficiency in order to consume less energy.
To the journalist, oil-rich countries like Mexico or Indonesia see their indigenous demand increase rapidly. This leads to a decrease of their exports of fossil fuel.
This phenomenon is due to increase even more in the future, as more oil-exporting countries will see their local demand increase. This will endanger even more our economies.
As the IHT states :
The economies of many big oil-exporting countries are growing so fast that their need for energy within their borders is crimping how much they can sell abroad, adding new strains to the global oil market.
Experts say the sharp growth, if it continues, means that several of the world’s most important suppliers may need to start importing oil within a decade to power all the new cars, houses and businesses they are buying and creating with their oil wealth.
Indonesia has already made this flip. By some projections, the same could happen within five years to Mexico, the No. 2 source of foreign oil for the United States, and soon after that to Iran, the world’s fourth-largest exporter.
In some cases, the governments of these countries subsidize gasoline heavily for their citizens, selling it for as little as 7 cents a gallon, or 2 cents a liter, a practice that industry experts say fosters wasteful habits.
“It is a very serious threat that a lot of major exporters that we count on today for international oil supply are no longer going to be net exporters any more in five to 10 years,” said Amy Myers Jaffe, an oil analyst at Rice University in Texas.
The trend, though increasingly important, does not necessarily mean there will be oil shortages. More likely, experts say, it will mean big market shifts, with the number of exporting countries shrinking and unconventional sources like Canadian tar sands becoming more important, especially for the United States.
And there is likely to be more pressure to open areas now closed to oil production.
Greater political stability and increased drilling in some important oil countries, notably Iraq, Iran and Venezuela, could help offset the rising demand from other oil exporters.
I am quite wondering with this affirmation as all these countries see political unrest. How can we think that they will increase their production and sell more of their oil ? Now here comes the major problem :
The report said “soaring internal rates of oil consumption” in Russia, in Mexico and in member states of the Organization of Petroleum Exporting Countries would reduce crude exports as much as 2.5 million barrels a day by the end of the decade.
That is about 3 percent of global oil demand. It may not sound high, but experts say that demand for oil is so inflexible, and the world has so little spare production capacity, that even small shortfalls can raise prices. In 2002, when a strike in Venezuela took 3 percent of global production off line, oil prices spiked 26 percent within weeks.
(…) China and India are expected to account for much of the increase in global oil demand in the next 20 years. But Fatih Birol, chief economist at the International Energy Agency in Paris, rated consumption growth among oil exporters as the second-biggest threat to meeting the world’s oil needs.
“It’s a big problem, and growing all the time,” Birol said.
Internal oil consumption by the five biggest oil exporters – Saudi Arabia, Russia, Norway, Iran and the United Arab Emirates – grew 5.9 percent in 2006 over 2005, according to government data.
(…) Particularly in oil-producing countries with large populations, like Indonesia, Russia and Mexico, a rapid rise in car ownership is a big factor driving consumption increases. Russian farmers are replacing horses and carts with gas-guzzling four-wheel-drive vehicles, while urban consumers are snapping up BMWs even before they learn to drive.
So if I sum up the situation in the light of peak oil : countries that should provide the ever-increasing amount of oil Mankind currently needs might decrease this amount as they see their indigenous demand rise sharply.
This fact, or this prospect if you prefer, is another sign for our societies to make whatever we can to decrease our own demand of fossil fuels. Indeed, oil prices will keep on increasing as we approach peak oil, which might occur as soon as 2015.
To do so, we have several means such as energy efficiency, behavioural changes, renewable energies and nuclear.
We can do it, and thus avoid the misfortunes of a full scale climate change. Solutions exists, now we have to implement them.
