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Straits of Hormuz from Space Shuttle
Straits of Hormuz as viewed from NASA's Space Shuttle. The Musandam Peninsula, controlled by Oman points towards Iran at top of photo. The land mass stretching along the leading edge of the Shuttle's starboard wing is the United Arab Emirates. Some two-thirds of the world's remaining oil reserves are locked under this troubled region.

Uncertainty Haunts GAO Peak Oil Report

Paucity of data, conflicting methodologies and lack of coherent government policy is a cocktail for future energy crisis

By EV World

It is a dark and stormy night...

A semi-truck hauling gasoline races along a twisting mountain road shrouded in a thick gauze of fog. The truck's lights penetrate only yards ahead, yet the driver races on, shifting gears and picking up speed. He's got a life to lead and a warm bed ahead.

Yet somewhere out there on Route 666, the bridge across Campbell's Gorge is unfinished, the spans still incomplete. Disaster looms and although the driver has been warned, he is too preoccupied with the road immediately visible in his headlights to care about some remote and distant threat.

Today, the United States Government Accounting Office or GAO issued its 82- page report on peak oil, entitled Crude Oil -- Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production [1.1MB]. It acknowledges three key facts: peak oil is real, no one is sure when it will occur and without consistent government policy that acknowledges its reality and plans for its eventuality, the United States, perhaps more than any other nation, will be the most seriously harmed economically.

The report, initiated at the request of Maryland Representative Roscoe Bartlett who has been the leading voice in Congress on the peak oil question, acknowledges that a decline in oil production, both conventional and unconventional, will occur within essentially one generation, likely sometime between now and 2040. The disparity in dates is attributed to the wide variance in the data and methodology used by various research entities from individuals like Dr. Colin Campbell and Professor Kenneth Deffeyes who see peak happening in the next few years to the USGS and Cambridge Research Associates who see a longer, but still historically brief window.

To quote the report, an advanced copy of which EV World obtained from Congressman Bartlett's office...

The timing of the peak depends on multiple, uncertain factors that will influence how quickly the remaining oil is used, including the amount of oil still in the ground, how much of the remaining oil can be ultimately produced, and future oil demand. The amount of oil remaining in the ground is highly uncertain, in part because the Organization of Petroleum Exporting Countries (OPEC) controls most of the estimated world oil reserves, but its estimates of reserves are not verified by independent auditors.

For example, Kuwait's official estimate of its oil reserves remained unchanged between 1991 and 2002 despite having pumped 8 billion barrels of oil during that period, while making no new discoveries.

Also complicating the picture is world oil demand, which fluctuates with the state of the world's economy; when times are good, demand is high and prices respond, usually upward until consumer resistance to price, slows demand, which cascades from lower prices to less production in an increasingly volatile roller coaster ride for producers and consumer alike.

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