CERA Reports: Peak Oil Theory Based on Faulty Analysis

Nov.20.06 | About: The United (USO)

There is a useful new Cambridge Energy Research Associates, Inc. [CERA] report out strongly critical of peak oil theory. Instead, the report's authors argue, technology advances mean we are set to see a near-doubling in oil supply by mid-century, and then an "undulating plateau", before decline begins toward the end of this century.

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Undulating Plateau vs. Peak Oil

But as CERA Chairman Daniel Yergin points out, technology innovation could make even this muted scenario too pessimistic:

"This is the fifth time that the world is said to be running out of oil," says CERA Chairman Daniel Yergin. "Each time -- whether it was the 'gasoline famine' at the end of WWI or the 'permanent shortage' of the 1970s -- technology and the opening of new frontier areas has banished the specter of decline. There's no reason to think that technology is finished this time."