Oil availability
The article “Forces beyond demand growth reshaping trade in oil and gas” seems to have omitted one of the most critical of those forces-oil supply availability (OGJ, Aug. 1, 2005, p. 18). It is astounding that the US Energy Information Administration (EIA) continues to forecast oil exports both from the Persian Gulf members and from all members of the Organization of Petroleum Exporting Countries to increase by roughly 100% from 2001 through 2025. That forecast is credible only to those who believe EIA’s companion forecasts of 2005 crude oil prices falling in a range of about $25-44/bbl.
The EIA perception of oil availability over the next 20 years is in sharp contrast with OPEC reports of its members’ actual production over the past 25 years. Some highlights of the recent past include:
1. Eight of the 11 OPEC members are currently producing oil at lower rates than their record levels set in the 1970s.
2. Only Algeria, Qatar, and the United Arab Emirates (15% of OPEC production) have set production records in the 21st century.
3. Collectively, the total OPEC oil production rate in 2001 was essentially unchanged from 1980.
4. Production from the Persian Gulf members of OPEC was about 3% higher in 2001 than in 1980.
The much debated significance of oil reserves reported by OPEC members increasing from 426 billion bbl in 1980 to 878 billion bbl in 2004 may be irrelevant in the face of stagnant production.
Ward M. Wheatall
Williamsburg, Va.
The Kyoto alternative
I enjoyed your editorial, The Kyoto alternative-especially the series of questions you posed (OGJ, Aug. 8, 2005, p. 19). And you are certainly correct in stating that the global warming fanatics never welcomed such questions.
There is also another question that these folks don’t want to discuss. Suppose that all of the countries in the developed world (including Australia/New Zealand, Mexico, and the US) met the carbon reduction targets set by Kyoto (approximately 5% below their 1990 emission levels), by how much would world carbon emissions be reduced in 2010?1
Using US Energy Information Administration’s data in the recently released 2005 World Energy Outlook, I ran a quick calculation, and the answer is that world carbon emissions would be expected to increase from 5,856 million tonnes of carbon in 1990 to 7,531 million tonnes in 2010-a 29% increase.2 The increase is due entirely, of course, to increased emissions from the developing countries, which are exempt from any constraints. I suspect that the increase would be even greater because it does not appear that EIA considered the movement of energy-intensive industries from developed to undeveloped countries as a result of implementation of Kyoto in making their projections.
References
1. Under the Kyoto Protocol, participating developed countries are required to reduce their carbon emissions over the first commitment period (January 2008-Dec. 2012) to a level about 5% below their 1990 emission levels. To meet the terms of the treaty, these nations must limit their emissions over this 5-year commitment period to an annual average that is at or below the final target. The Energy Information Administration EIA uses the year 2010 for calculating post-Kyoto energy consumption and carbon emissions.
2. Carbon emission data from World Energy Outlook 2005, Tables 14 and A10, DOE/EIA-0484(2005), Energy Information Administration, July 2005.
Donald F. Anthrop
Professor
San Jose State University