Port of LA sets new world record
The likely decline, by 2030, in the production capacity of those countries that currently supply more than half of the oil consumed by the European Union (EU) could lead to severe constraints on EU supplies, says a new research by The Shift Project.
From 2019 to 2030, the total volume produced by the EU’s current oil providers is likely to shrink by up to nearly 8%, according to an analysis featuring a level of detail unavailable so far in any public study; the report is mostly based on estimates of future global crude oil production capacity provided by a Norwegian market intelligence agency, Rystad Energy.
The highest potential rates of this decline would exceed the decline rate of oil consumption in the European Union since 2010 (notwithstanding, the EU currently imports more crude oil than China or the United States).
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The combined production of Russia and all former USSR countries, which together account for more than 40% of the EU’s oil supply, seems to have entered a systematic decline in 2019. Africa’s oil production (more than 10% of EU supplies) appears set to decline at least until 2030.
The production growth expected by Rystad is highly dependent on the development of new oil prospects whose technical and economic potential remains to be assessed, or on hypothetical future discoveries. As a result, a significant share of the expected growth trends is more uncertain than the expected decline, which is induced by the well-known and precisely measured evolution of existing “mature” production.
Extreme price volatility and strong demand growth in Asia increase supply risk
Two factors increase this risk concerning future EU supplies:
firstly, the extreme volatility of crude oil prices observed during the last decade, which makes investing in oil projects more complex and more risky;
secondly, the strong growth in demand expected from Asia and Africa, while the production of both continents should decline, according to Rystad and the International Energy Agency.
Boom of foreign investments into China
While severe constraints on global oil production are likely to affect directly or indirectly the EU over the coming decade, such shrinkage seems unavoidable beyond 2030.
This challenge of limited global oil resources may be viewed as the “broom wagon” of environmental policies: if climate policies fail to be implemented at the right pace, then we will all be swept by the “broom wagon” of the decreasing availability of crude.
However, such constraints will not allow us to thwart global warming. Global warming and “peak oil” are in no way exclusive: here are two natural hazards that pile up on each other.As a result, peak oil is an additional compelling reason for designing a world without oil, and stop relying on global economic growth, which remains so far largely correlated with oil consumption.