·               Rising demand and diminishing reserves of oil and gas are not news within the petroleum industry; not to most specialists, but politicians, the media and the general public have only recently been hearing about it. The long-term prospects for an energy crisis that will dwarf the one of the early 1970s are very real. In the U.S. today we are producing less oil than we were producing in the 1950’s. Oklahoma is producing less oil today than in the 1920's. In spite of the tremendous technological leaps the oil industry has made to keep old oil fields alive and to drill in ever-deeper waters in the oceans, the domestic annual production continues to decline. See Histogram

·           In 2001, Professor Kenneth S. Deffeyes of Princeton University published “Hubbert’s Peak, The Impending World Oil Shortage” through Princeton University Press. This is a definitive work for the layperson and professional alike. 
      Deffeyes worked at Shell Oil Company’s Research Lab in 1956 as a geologist when M. King Hubbert (of that company) predicted U.S. oil production would reach its highest level in the early 1970s.
      Though roundly criticized and occasionally ridiculed by oil experts and economists, Hubbert’s prediction came true in 1970. This event and the subsequent decline in U.S. oil production have become known as “Hubbert’s Peak.” 
      Deffeyes resurrected Hubbert’s work to look at world oil production. Using the same methods, he predicts we will see a peak in world oil production in the year 2008. Once that peak occurs, there will be a permanent and irreversible shortage of oil and its by-products according to his analysis.
       We highly recommend one read this concise treatment of what will become a major issue in only a few more years. 
To go to Deffeyes' website click here.

·           One theme (mentioned by Deffeyes and the group at Douglas-Westwood) is our need to develop alternative energy sources. To date none have proven viable for our transportation needs. For instance, we do not yet have an electric automobile that can travel 300 miles non-stop while operating the air conditioning (heating OR cooling). Then, once the batteries are drained, it takes a long time to recharge them for the next leg of the journey. With that knowledge, consider an airplane. The same type shortcomings can be shown for solar and wind generated energy.

·           Petroleum and petroleum by-products are a vital part of our transportation system and our daily lives. Even those who might argue we use bicycles for our personal transportation fail to recognize that parts of the modern bicycle are made from petroleum by-products and fossil fuel energy was likely used to create the frame, wheels, and chain. Click to see a few products made from hydrocarbons. Our modern lives cannot be lived without using products that have been manufactured with fossil fuels (even a toothbrush) and/or were created with energy provided by fossil fuels.

·          Petroleum is a vital part of our modern economy and its scarcity is upon us. Solutions to this dilemma are being hotly debated. We in the energy business are looking for solutions based on science and practicality. It is troublesome to witness the advancement and acceptance of politically motivated solutions.