The Coming Oil Crisis

What really concerns me at present is not the sub prime induced credit crunch but actually the next oil crisis. There is an interesting debate going on about the future for oil supply between official oil industry sources such as the US Government backed International Energy Agency (IEA) and an independent band of mostly ex-industry professionals, the so called "peak oilers". As their name suggests, peak oilers believe that global crude production has reached it's limit and that supply is about to decline (or indeed that it already has).
This argument is very well presented in a report by the Energy Watch Group (EWG) published in October 2007 which analyses production data in detail by geographic region. The other side to the debate is led by the IEA which largely forecasts demand, where increases will come from China and India and assumes (backed by reserve data) that OPEC countries will increase supply to fill the gap. But the difference in methodology produces vastly different results: EWG predict that by 2030 global oil supply will be down to 39mbpd whilst the IEA forecast 116mbpd (against about 85mbpd for 2007). If the IEA is wrong and EWG is right we are, globally, are in for a serious shock.
The whole issue is far too lengthy for me to repeat in my blog but I will, from time to time, discuss some of the respective arguments. Suffice it to say that a key part of the differential arises in respect of the Middle East, particularly Saudi Arabia.