The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.
The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command comes as the price of gasoline in Britain reached record levels and the cost of crude is predicted to soon top US$100 a barrel.
“By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day,” says the report, which has a foreword by a senior commander, General James Mattis.
“While it is difficult to predict precisely what economic, political, and strategic effects such a shortfall might produce, it surely would reduce the prospects for growth in both the developing and developed worlds. Such an economic slowdown would exacerbate other unresolved tensions, push fragile and failing states further down the path toward collapse, and perhaps have serious economic impact on both China and India,” it said.
The warning is the latest in a series from around the world that has turned peak oil — the moment when demand exceeds supply — from a distant threat to a more immediate risk.
The Wicks Review on UK energy policy published last summer effectively dismissed fears, but Lord Hunt, the British energy minister, met concerned industrialists two weeks ago in a sign that it is rapidly changing its mind on the seriousness of the issue. The Paris-based International Energy Agency remains confident that there is no short-term risk of oil shortages, but privately some senior officials have admitted there is considerable disagreement internally about this upbeat stance.
Future fuel supplies are of acute importance to the US Army because it is believed to be the biggest single user of gasoline in the world. British Petroleum chief executive Tony Hayward said recently that there was little chance of crude from the carbon-heavy Canadian tar sands being banned in the US because the US military likes to have local supplies rather than rely on the politically unstable Middle East.
But there are signs that the US Department of Energy might also be changing its stance on peak oil.
In a recent interview with French newspaper, Le Monde, Glen Sweetnam, main oil adviser to the administration of US President Barack Obama, said that “a chance exists that we may experience a decline” of world liquid fuels production between next year and 2015 if the investment was not forthcoming.
Lionel Badel, a post-graduate student at Kings College, London, who has been researching peak oil theories, said the review by the American military moves the debate on.
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