THE GUARDIAN: As the price of crude oil sets records almost daily, the British government remains stunningly complacent. With the $100 barrel a real and constant threat, the prime minister's website blithely proclaims "the world's oil and gas resources are sufficient to sustain economic growth for the foreseeable future". Officials refuse to define what is meant by "foreseeable", but it is clear they suffer from extreme myopia, or worse.
All the evidence suggests we are rapidly approaching "peak oil", the point when global production goes into terminal decline for geological reasons. The industry consensus is that world output, excluding that from the Opec producers, will peak in about 2010. It is also widely agreed that Opec has grossly exaggerated the size of its reserves, meaning that global output must also peak soon. Since oil provides 95% of all transport energy, as well as vital inputs to modern agriculture, this is likely to provoke a crisis.
Oil executives have traditionally avoided talk of geological constraints - no doubt mindful of the value of their share options - but now even they admit the industry is in difficulty. A growing number believe output will never exceed 100m barrels per day, compared with 86m today. At present rates of growth, demand will hit that ceiling within about a decade. $100 oil: the terrible truth: Nearing the price barrier is a pointer to the peak of output, and the crisis the powerful want to ignore By David Strahan
Mark Alexander
