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22 Dec 2008 05:12:04

Conventional oil production 'to peak in 2020'

Conventional oil production 'to peak in 2020'
Conventional oil production will reach its peak by 2020, which will be followed by decline, according to the International Energy Agency's (IEA) chief economist.

Speaking to the Guardian, Fatih Birol, clarified statements made in the IEA's energy outlook report for 2008.

This year's report says that "athough global oil production in total is not expected to peak before 2030, production of conventional oil ... is projected to level off towards the end of the projection period".

The newspaper's Gerge Monbiot asked Fatih Birol, the report's lead author, if he could predict when supplies of conventionally extracted oil would hit.

Mr Birol replied that for countries that are not members of the Organisation of Petroleum Exporting Countries (Opec), " we are expecting that in three, four years' time the production of conventional oil will come to a plateau, and start to decline".

He added: "In terms of the global picture, assuming that Opec will invest in a timely manner, global conventional oil can still continue, but we still expect that it will come around 2020 to a plateau as well, which is, of course, not good news from a global-oil-supply point of view."

Campaigners fear that when oil production reaches its peak, costs will soar drastically as demand increases and supply contracts, affecting any oil-related areas of economy and life.

Meanwhile, the Financial Times has drawn up a chart of the price at which different energy technologies become competitive, in relation to current costs.

It suggests that conventional oil of various types is competitive in a range from less than $5 a barrel to about $60, excluding Venezuela's unconventional supplies, other ways of developing oil become commercial at about $60 a barrel, a similar rate to US corn ethanol.

Oil prices are currently at around $42 a barrel, though over the summer they soared to $147 a barrel.




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