OIL SUPPLY TO TRAIL DEMAND BY 2030, STUDY PREDICTS
By Bloomberg News
July 19, 2007
Original Link
NEW YORK - Oil supplies may fall short of demand by 13 million barrels a day by 2030, according to a study led by former Exxon Mobil Corp. chairman Lee Raymond and based on forecasts from the world's largest oil companies.
Data collected from as many as 12 international oil companies showed global production may reach 105 million to 110 million barrels a day by 2030. That's as much as 11 percent below US government forecasts for 118 million barrels a day of demand. The report was approved yesterday by the National Petroleum Council, an advisory group that conducted the study in response to a request from US Energy Secretary Samuel Bodman.
"We need energy efficiency, we need to moderate the rate of growth of demand," Bodman said after the report was released. "We need diversity of suppliers and of supplies."
The oil industry, with this report, is moving closer to the analysts, hedge fund managers, politicians, and academics who have warned that global energy supplies will only get tighter and prices higher in years to come. The Petroleum Council recommends improving energy efficiency and pursuing unconventional sources of energy, including oil from tar sands and shale formations and nonpetroleum fuels such as ethanol.
The industry is "very aware of the pressures of demand growth, the impact of rising costs, and this access question," said Daniel Yergin, chairman of the consulting firm Cambridge Energy Research Associates, who helped write the study.
Access to the global oil deposits that are easiest and cheapest to tap is becoming more difficult as governments in countires such as Russia and Venezuela become less willing to turn their resources over to foreign companies.
The front-month August light, sweet crude contract on the New York Mercantile Exchange rose $1.33 to $75.35 a barrel, an 11-month high.
Investment bank analysts including Adam Sieminski at Deutsche Bank Securities Inc. this week raised their price forecasts. Sieminski, who also contributed to the council's report, cited rising labor and equipment costs, caused by a rush to expand energy projects worldwide. Goldman Sachs Group Inc. said oil may rise to $95 a barrel by year-end.
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