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Demand for Oil May Pass Output by 2012

Experts see prolonged crisis as producers max out pumping ability

By Jim O'Neill,  Newser User

Posted Nov 19, 2007 10:07 AM CST

(Newser) – Production limits, not supply, could prompt an oil crisis in less than a decade as efforts to reduce demand and introduce alternative fuels trail growth in the world’s oil needs, the Journal reports. Oil companies currently produce 85 million barrels daily; some experts say they'll hit a wall at 100 million barrels—far below projected world demands, and a recipe for shortages and skyrocketing prices.

Although reserves are plentiful and production has grown 2.3% annually since 1965, extracting oil has gotten tougher because of increased costs, limited access to oil fields, and geologic factors that limit production to avoid damaging supply. Not everyone agrees there’s a ceiling, though: Exxon, the IEA, and the US government believe production will climb as high as 120 million barrels a day by 2030.

An oil rig is seen amid strong waves off the shore of Paraiso in the gulf state of Tabasco, Mexico, Monday Oct. 29, 2007.
An oil rig is seen amid strong waves off the shore of Paraiso in the gulf state of Tabasco, Mexico, Monday Oct. 29, 2007.   (Associated Press)
Containers, which Chinese drivers place, are seen queue up to buy extra gasoline and diesel at a gas station in Wuyuan, in China's southern Jiangxi Province, Tuesday, Oct. 30, 2007. China's two main oil companies have promised to step up diesel production, the government said Tuesday, following two weeks of...
Containers, which Chinese drivers place, are seen queue up to buy extra gasoline and diesel at a gas station in Wuyuan, in China's southern Jiangxi Province, Tuesday, Oct. 30, 2007. China's two main oil...   (Associated Press)
Cuban engineers work at the oil-refining plant in Santa Cruz del Norte, Cuba, Saturday, March 24, 2007.
Cuban engineers work at the oil-refining plant in Santa Cruz del Norte, Cuba, Saturday, March 24, 2007.   (Associated Press)
In this undated file photo provided  by Mexico's national oil company, Pemex, on June 13, 2006, an offshore oil installation is seen in the gulf of Mexico near the coast of Campeche, Mexico.
In this undated file photo provided by Mexico's national oil company, Pemex, on June 13, 2006, an offshore oil installation is seen in the gulf of Mexico near the coast of Campeche, Mexico.   (Associated Press)
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