World’s Oil Fields Drying Up at Frightening Speed

Breaking Energy Crisis News
26-Government Study Confirms:
World’s Oil Fields Drying Up at Frightening Speed

Even the keepers of official statistics can’t hide this alarming oil secret from you anymore…

Imagine if world oil production fell 38% in the next five years.

That’s like losing nearly all of OPEC.

Imagine the chaos. The shortages. President Obama ordering gas rationing. Fear and fighting in the streets. A world that looks more and more like “Mad Max.”

Think that’s far-fetched? Not so much:

The International Energy Agency is just out today with some shocking numbers. Numbers that confirm everything we’ve been telling you in this space for years.

The IEA advises the governments of 26 countries in North America, Europe, and Asia. So this is a big deal.

A team of 25 IEA experts just finished an exhaustive survey of the world’s 450 biggest oil fields. It’s an unprecedented effort. And the results are frightening.

“The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields,” according to the Financial Times.

Here’s the big, terrifying number: The world’s oil fields are depleting at a rate of 9.1% every year!

To put that into some perspective: Current world oil production is 84 million barrels a day. Assume no one does anything to find more oil. According to the IEA’s numbers, production would fall off a cliff — to just 52 million barrels a day by 2013. That’s a 38% drop in five short years.

It gets worse. As it is, world oil demand is 85 million barrels a day. So we’re already using more than we’re consuming. And it’s not going to get any better. The IEA expects demand to grow 1.6% per year. Hold that against production drops of 9.1%, and you begin to see the problem.

But even if oil consumption stopped growing today…if demand held at 85 million barrels a day, we’d still be in trouble. There’s simply no way new oil discoveries can make up for a 38% drop in production from existing fields. None.

We could drill up every drop in the Arctic National Wildlife Refuge and it would supply the world for only six months. And that’s using the most optimistic estimate of its reserves.

Here’s another way you can look at it.

We Need to Discover “Four New Saudi Arabias”

The IEA report says the world needs to increase current production by 45 million barrels per day — just to keep pace with current levels of demand.

How much oil is that? The IEA’s chief economist, Fatih Birol, says that means “bringing four new Saudi Arabias on stream” between now and 2030.

Again, that’s just to keep up with present demand. Add in growing demand from China, India, and the Middle East, and that 45 million barrels per day grows to 65 million — or FIVE new Saudi Arabias.

Do you think we’ll find five new Saudi Arabias by 2030? How about four? Even with aggressive exploration of deep ocean water and the Arctic? Didn’t think so.

Neither does our resident geologist Byron King.

Chances are you already know Byron from his many Whiskey & Gunpowder articles dating back to 2004. From the start, he’s been warning you about “Peak Oil” and its devastating consequences. Now his prognostications are finally going mainstream. In other words, the IEA is catching up to him.

Byron’s known for years about the frightening decline in Mexico’s Cantarell oil field, once the second largest-in the world. Production from July 2007 to July 2008 plunged 36%.

In fact, of the world’s four super-giant oil fields, three are in decline. Not just Cantarell, but also Burgan in Kuwait and Daqing in China.

And what about the biggest of them all? Well, we still don’t know the full story about Saudi Arabia’s Ghawar.

That one field accounts for 6% of world production. But for how much longer? Its reserves are a Saudi state secret. The IEA had to rely on computer models to analyze Ghawar. Not comforting, is it?

Even worse, the IEA report says the world’s smaller fields are declining at rates even faster than the super-giants.

Byron’s been warning about the decline of the world’s oil fields for years, both here and in the pages of his monthly research advisory, Outstanding Investments. And the IEA’s just-released numbers validate his warnings.

Yet what’s the story you hear now from the perpetually clueless mainstream media?

What the Mainstream Media Aren’t Telling You

You hear this: A global recession is killing energy demand. Oil prices are at a 20-month low today. Already gas is back to $2 a gallon in many places. Heck, SUV sales are up again. We don’t have to worry about energy shortages now.

Really?

Maybe you missed the story. On Monday, China unveiled its own “stimulus package” for the world’s fastest-growing economy. $586 billion to help build things like highways and airports. Which will be filled with cars and airplanes. Which use fuel. Lots of it.

Sure, China might not grow 10% a year anymore. But even if it slows down to 5%, that’s a lot of people giving up bicycles for scooters. And scooters for cars. They’re joining you and me among the ranks of the world’s big-time energy users. Permanently.

Bottom line: Energy use might be down in the developed world. But the developing world — China, India, the OPEC nations themselves — is more than making up for it.

Here’s something else the media aren’t telling you.

“Within Seven Days We’ll Run Out of Food”

Don’t look now, but U.S. gasoline inventories, according to Barclays Capital, are at 40-year lows.

That’s big-time vulernability. One big hurricane in the Gulf of Mexico next summer could knock out drilling platforms at sea, and refineries on shore.

That worries Matt Simmons, famed investment banker to the oil industry, the man CNBC calls “the ultimate oil insider.” He paints a dire picture of trucks with no fuel…and no way to deliver their food to stores.

“If we end up having gasoline shortages,” Simmons says, “the odds are about 90% that Americans will do what we always do: We'll top up our tanks. And in topping up our tanks, within three or four days we'll drain the pool dry and then within seven days we'll run out of food.”

President Obama ordering gas rationing? Doesn’t sound so far-fetched now…