Peak demand vs peak oil, the debate picks up in Davos

(MENAFN – Arab News) Global energy outlook too has been under the hammer at Davos – and despite the freezing cold temperatures outside the huge auditorium – the debate was enough to keep adrenaline flowing. A battle was on – with the crusaders arguing that peak oil was just round the corner. And there were defenders, warning, and rather forcefully, that it’s this buzz that would keep the demand – supply balance stretched in the coming years and not any lack of resources.

Indeed many in this part of the world, including this writer strongly believe that the worries over oil production peak have at least been relegated to a back burner, if not totally discarded. Yet the debate in Davos once again reminded us that the peak oil pundits are not going to give up – despite some recent setbacks.

While addressing the session, Saudi Aramco CEO Khalid Al-Falih, underlined that worries about oil production reaching a peak are now over. “We feel that the whole issue that came to the surface and created a lot of concern about peak oil is behind us.”

Al-Falih took a jab at peak oil (underlining he doesn’t believe in it), then stated that talk of the world weaning itself off fossil fuels does not inspire confidence to keep investing in oil production. “Of the 4 trillion (barrels) of oil the planet is endowed with, only 1 has been produced,” Al-Falih said.

“Granted most of what remains is more difficult and complex (to exploit) … there’s no doubt we can do a lot more than the 95, 100 (million barrels) that are projected in the next few decades.” Saudi Arabia has a long list of projects in its portfolio that would more than offset declines, he said.

Good, old friend Fatih Birol, the IEA chief economist was also there, casting his very important and influential vote against the peak oil argument. He even raised doubts on the wisdom of many oil firms’ long-term investment plans, warning that demand for oil from industrialized nations has already peaked.

MENAFN – Arab News