“Peak Oil” vanishes and even OPEC bows to shale fracking technology

The various catastrophe scenarios based on the depletion of a limited resource (peak-oil, peak-gas, peak-energy, peak-food……….) have a fundamental weakness – they fail to account for human ingenuity and technological advance. History has shown that such Malthusian scenarios just do not come to pass. New discoveries change the availability of the resource, innovation and technology find alternatives and economics changes pricing and the supply/demand dynamics.

Moving peaks

In February this year I posted:

In recent times the development of fracking technology and the discovery of huge deposits of gas-bearing shales together with the discovery of new deep-sea sources of natural gas have pushed the “peak” for gas production beyond the visible horizon and into the distant future (a few hundred years). When – rather than if – methane hydrates become available for gas production, the “peak” will shift further into the future.

Reuters now reports on Opec’s latest World Oil Outlook 

OPEC acknowledged for the first time on Thursday that technology for extracting oil and gas from shale is changing the global supply picture significantly ……

In its annual World Oil Outlook, OPEC cut its forecast of global oil demand to 2016 due to economic weakness and also increased its forecast of supplies from countries outside the 12-nation exporters’ group.

“Given recent significant increases in North American shale oil and shale gas production, it is now clear that these resources might play an increasingly important role in non-OPEC medium- and long-term supply prospects,” the Organization of the Petroleum Exporting Countries said in the report.

OPEC has been slower than some to acknowledge the impact that new technologies such as hydraulic fracturing – known as “fracking” – may have on supply.

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