In "Oil market uncertainty," what your economics editor and the Centre for Global Energy Studies seem to have forgotten is that the existing OPEC production base is in decline (OGJ, Mar. 15, 2010, p. 16). If the International Energy Agency figure of 6.7% annual decline for existing fields is applied to current OPEC production, it can be expected to decline by 18 million b/d by 2020. This will mostly offset the 19 million b/d of additions and spare capacity quoted.
Non-OPEC production will fall by 20 million b/d over the same period, and with CGES's inherent demand growth of 10.3 million b/d, the market will be short 30 million b/d.
A price response can reasonably be expected, which leads to the Editor's Perspective of the same date (p. 64). There is no need to worry about the price of gasoline necessary to reduce CO2 emissions; it is going to happen anyway due to a lack of oil.
David Archibald
Perth
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