GAO releases peak oil report
March 30th, 2007 by Jim JustA just-released report by the Government Accountability Office examines when oil production could peak, assesses the potential for transportation technologies to mitigate the consequences of a peak in oil production, and looks at federal agency efforts that could reduce uncertainty about the timing of a peak or mitigate the consequences. The study was done because it’s recognized that U.S. economy depends heavily on oil, particularly in the transportation sector. World oil production has been running at near capacity to meet demand, pushing prices upward. Concerns about meeting increasing demand with finite resources led to the question: how long can the oil supply expand before reaching a maximum level of production-a peak-from which it can only decline? The report concludes that an imminent peak and sharp decline in oil production could have severe consequences, including a worldwide recession. If the peak comes later, we may be time to develop technologies to mitigate the consequences. The report did not offer any conclusions as to when peak might occur, stating only that “most studies estimate that oil production will peak sometime between now and 2040.” Matt Simmons was on CNBC talking about the GAO report (7 mins). The full report is available here (pdf).Rep. Bartlett, who requested the GAO report, speaking before the House pointed out that in addition to the uncertainty about how much oil is still out there, 95 percent of what remains is in high and medium risk places considering both political and investment risk. Warning that we have to take action to avert an energy crisis, Bartlett concluded: “With proper leadership, I think that Americans could be exhilarated by the challenge.”