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THE WALL STREET JOURNAL: For Peak Oil, Three’s a Crowd

January 25, 2008, 3:32 pm
Posted by Keith Johnson

Has the peak oil crowd added a new member?

An email written by Royal Dutch Shell CEO Jeroen van der Veer has sparked the latest round of debate over the state of oil supplies. In the email, which Mr. van der Veer told his employees to spread around, he says (HT to the Oil Drum. Here’s the whole spiel.):

Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand. As a result, society has no choice but to add other sources of energy – renewables, yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.

Other big energy companies, from France’s Total to Texas’s ConocoPhillips, have already painted a less-than-rosy outlook for world oil supplies. Even the National Petroleum Council, a proxy for the Big Oil fraternity, recently said that conventional oil and natural-gas supplies aren’t likely to keep pace with demand.

The crux of the debate: How fast are existing fields actually declining, and how fast and economically can oil companies get new finds to replace that output?

Shell outlined two main scenarios for the energy future: a free-for-all for energy resources around the world, or growing international cooperation to soothe energy friction. Shell leans toward the latter:

Against the backdrop of these two equally plausible scenarios, we will only know in a few years whether December’s Bali declaration on climate change was just rhetoric or the beginning of a global effort to counter it.

Another interesting twist to the idea that oil and natural gas will become harder and more expensive to find and get out of the ground: It’s making coal pricier, because coal is still the go-to fuel source in the absence of a big nuclear build-out.

So the question is: Does Shell adding its voice to the growing chorus of naysayers mean anything for the viability of other energy sources?

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