Peak oil – the moment when global oil production reaches its maximum and then begins a gradual, yet inevitable decline – could be here already, according to some analysts. Or it could be decades away, as most of the world's top government energy agencies say.

Now Fatih Birol, the chief economist at the International Energy Agency, is saying that the globe will see oil production peak in 2020 – about a decade earlier than most official government predictions.
British newspaper The Independent published an interview with Birol on Monday that laid out that prediction, along with statistics that show that the world's 800 largest oil fields are seeing a 6.7 annual decline in production, worse than the 3.7 percent decline the agency estimated in 2007.
The prospect of peak oil is a critical one for the modern global economy, since almost all transportation fuel needs, and a good part of the rest of society's energy demands, are filled by petroleum products.
While a peak in production doesn't imply that the oil will run out at that time, it does imply that increasing demand won't be able to be met by increased production, which could lead to a drastic spike in the price of oil.
That could stall or even reverse any upturn for the global economy, Birol said, given that the alternative – to find “the equivalent of four Saudi Arabias” in new oil supplies – seems unlikely.
“Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices,” he told The Independent.
It isn't the first time Birol has brought these facts, including his prediction that peak oil production will occur in 2020, to the media's attention. He presented similar information in an interview with the Guardian newspaper in December.
In that interview, he also predicted that oil production from countries that aren't part of OPEC – the Organization of Petroleum Exporting Countries – will plateau and decline in the next three to four years, leaving OPEC nations, primarily those in the Middle East, in increasing control of the world's oil supplies.
Birol isn't the only highly placed energy watcher worried about shrinking future global oil production. The U.S. Department of Energy's Energy Information Administration has downscaled its projections for how much oil the world will produce in 2030 in its most recent report on the subject, according to a June article in The Nation magazine.
The agency's most recent International Energy Outlook report for 2009 predicts that global production of conventional oil will reach 93.1 million barrels per day in 2030, a drop from its 2007 prediction of 107.2 million barrels per day by 2030, that article states. The world produced 81.5 million barrels per day in 2006.
That would leave “unconventional” sources of oil, such as the oil sands of Canada and Venezuela, oil shale deposits in the Western United States and “ultra-deep” offshore oil deposits like one slated for development off the coast of Brazil, to make up the difference.
Biofuels could help ease a shortfall as well, but so far they make up only a tiny fraction of the world's fuel supply. Production of so-called “next generation” biofuels made from non-food sources like grasses, agriculture and wood waste and municipal garbage has so far failed to meet expectations for growth in the United States (see U.S. Won't Meet Its Own Biofuel Mandate).
Critics of peak oil predictions say that they fail to take into account more optimistic estimates of the oil remaining in the earth, as well as the potential for technology to improve oil recovery from existing fields and to discover new ones.
(Source: greentechmedia.com