Daily world demand for oil is over 80 million barrels a day, and approximately one-quarter of this is in and by the U.S.
Half of the oil refined in the U.S. is made into gasoline, the main product a refinery is concerned with. Other products such as asphalt, pesticides and plastics are minor parts of the barrel of crude oil to be disposed of (profitably only, if possible).
World oil supplies are at the approximate historic peak of maximum production, due to depletion setting in. Oil production in 18 producer countries has passed its peak and is declining faster than previously thought at about 1.14 million barrels a day.
"Those 18 countries between them are now producing 1.14 mbpd less than they were at their height." (Source Adam Porter, AlJazeera.net.
The maximum possible production-capacity utilization is the order of the day among the petroleum exporting countries:
"The planet is operating at anywhere from 95-99 percent capacity. There is no margin for error. The only way the system can respond is continued price increases" (Source Stephen Leeb, Wall Street investment advisor and author).
At a time of no spare refinery capacity, demand has outstripped all expectations (AlJazeera.net).
Regarding rising world demand, "China and India use the energy-equivalent of 5.5 barrels of oil per person per year, while rich nations use 39. No matter how rosy your thinking is as to the global supply of oil, there is no way there is going to be enough to satisfy the demands of an extra 2.3 billion people coming on line" (Forbes Magazine).
U.S. oil demand is rising as well: "U.S. petroleum demand in 2004 grew at its strongest rate in five years." The system is straining "Refinery utilization rate last year was the highest annual rate in six years at 92.8 percent of capacity" (American Petroleum Institute).
The world trend in declining oil extraction has been relentless for the past four decades. The approximate bell curve of petroleum extraction cannot be changed by any one big new discovery (Association for the Study of Peak Oil and Gas [ASPO]; Culturechange.org).
An International Energy Agency report from August 2004 indicates Saudi Arabia needs up to 800,000 barrels per day of newly discovered oil each year just to offset declining fields and maintain its current production level. This can't happen (Jan Lundberg).
Workshop Proceedings Available on the Internet
The Association for the Study of Peak Oil and Gas held its Fourth International Workshop on Oil and Gas Depletion in Lisbon, Portugal, May 19-20, 2005. Abstracts and some of the papers are available at www.cge.uevora.pt/aspo2005/abstracts.php.
The Association for the Study of Peak Oil and Gas (ASPO) began in 2000 following a lecture at Clausthal University. In 2001, C. J. Campbell started writing a monthly newsletter on the subject which was distributed to a small group of specialists. A workshop at Uppsala in 2002 attracted 65 participants and a website (www.peakoil.net) followed. Scientists in other universities and government departments in Europe added representatives and further workshops were held in Paris (2003) and Berlin (2004). This year in Lisbon saw an in increasing number of participants and much media coverage.
The ASPO newsletter is now directly distributed to more than 1500 readers and is reproduced in several languages on various websites.
One of the papers delivered at Lisbon is by Richard Heinberg of the New College of California at Santa Rosa on the topic: "The Likely Impact of Global Peak Oil on the United States." In part he writes:
"While each nation will be impacted differently by global peak oil, the types of effects that are likely to be seen in the U.S. can be extrapolated elsewhere; however, effects in this instance will be more pronounced because of America's extreme and arguably unmatched economic dependence on petroleum...."
Petroleum dependency has been systematically encouraged through suburban design and the lack of public transportation alternatives to the private automobile....
The consequences of America's lack of vigor and thoroughness in pursuing energy efficiency and conservation domestically over the past two decades will hamper its ability to adapt to a low-energy future....
If the 20th century saw America's economic and geopolitical ascendancy, the 21st will almost certainly see its decline. The problems created for the U.S. by peak oil will no doubt eventually be solved; however, the process will entail profound changes at every level of American society. What about renewable energy and other alternatives? They are not ready, and will never be as long as oil is king. (This is something not acknowledged by the boosters of the technofix.) The price of oil is kept under the price of most alternatives. When oil abdicates because great quantities are no longer available at affordable prices, no other fuel/material can fill oil's shoes (Jan Lundberg, from a prediction originally published in the National Petroleum News in 1988).
The next shortage could be soon and could be the last one that lasts and lasts as the watershed event of passing the peak of global oil extraction could be right around the corner. The "market factor" in paralyzing the supply/distribution system, through panic-buying of crude and refined products, will usher in virtual but extreme shortage, bringing much economic activity to a halt in a matter of days. History taught us:
"What the U.S. went through in 1979's oil crisis, based on the Lundberg Letter's projection of a nine percent shortfall in gasoline deliveries, can happen again. The difference will be that global production of oil will be falling instead of increasing" (Jan Lundberg, at The Institute of Petroleum, London, February 17, 2003.)