A former British Petroleum geologist has warned that consumers should not expect to get cheap oil anymore as conventional oil reserves have peaked and could bring with it a prolonged recession.
Dr. Richard G. Miller, who worked for BP from 1985 to 2008, made these comments at a Natural Hazards for Insurers course at University College London. He said that data from international energy agencies showed that global oil production had most likely peaked in 2008.
Oil companies maintain that global reserves would last for 53 years at current consumption levels, but peak oil is due to declining production and not declining reserves.
"We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover -- but production is still falling at 4.1 percent every year," he said.
Miller co-authored a paper with Dr. Steve R. Sorrel of the University of Sussex in the Philosophical Transactions of the Royal Society A journal, where they argue that most oil experts agree that the availability of cheap oil will go down and the dependence on other sources like shale oil will only worsen the situation.
"Greater reliance upon tight oil [shale oil] resources produced using hydraulic fracturing will exacerbate any rising trend in global average decline rates, since these wells have no plateau and decline extremely fast -- for example, by 90% or more in the first 5 years," they cited in the report.
They said in their paper that it was time to "accept that conventional oil resources are at an advanced stage of depletion and that liquid fuels will become more expensive and increasingly scarce."
As oil becomes more scarce and prices rise, the authors say the ensuing prolonged recession could "break economies" and lead to increased hunger and conflict.
[Philosophical Transactions of the Royal Society A]