This is in response to your editorial, “The curse of $95 oil” (OGJ, Nov. 12, 2007, p. 17).
The headline article in a recent Wall Street Journal (Nov. 19, 2007) was: “Oil Officials See Limit Looming on Production” (Russell Gold and Ann Davis).
ExxonMobil has forecast a peak in non-OPEC crude production by about 2010, after which only OPEC nations will be able to increase supply to meet relentlessly increasing demand from the 1.3 billion people in China and the 1 billion people in India, among other places. OPEC has done its own study and also projects a peak in non-OPEC crude production in the near future. Like it or not, we are about to enter a new world, where “the era of easy oil is over,” as Chevron has termed it in one of its advertisements.
There will certainly be large fluctuations in the price of oil in this era, but with a strong upward bias. OPEC producers are fully aware of how valuable petroleum is to modern industrial societies and are gradually raising prices to reflect more fully that value. Fortunately, we have many ways in which to cope in this new world, primarily by beginning to take energy efficiency and conservation seriously. When US consumers buy more hybrids than sport utility vehicles, you will know that the message has finally hit home.
Alfred Cavallo
Energy Consultant
US Department of Homeland Security
Environmental Measurements Laboratory
New York
