Peak Oil Just Got Pushed Back Again…

‘It’s running out.’

‘There will soon be none left.’

‘The world is heading for disaster.’

‘Peak oil is upon us.’

It’s a nice, if somewhat scary idea. It’s the idea that the world is about to run out of oil.

It’s also complete junk. The fact is, the world currently has more oil in reserves than anyone could possibly have imagined…

We’ve explained before how things have shaped up in the oil market in recent years.

For years folks in the US warned about a looming oil crisis. They said it would be the trigger for an economic collapse as either the world ran out of oil or the Middle East effectively held the US to ransom by withholding oil supplies.

Then the oil price began to climb — $40, then $50, then $60, then $100, then $140. You may even remember that during the commodities boom Goldman Sachs’ chief commodities analyst forecast an oil price of $200 a barrel.

And yet, what happened? To say that nothing has happened wouldn’t be true. But has there been a global energy disaster? No. And why is that?

As we say, the world’s proven oil reserves have never been bigger. Here’s the proof…

Peak oil keeps getting further away

Part of the reason for the record high reserves is precisely because the oil price is so high.

It encourages explorers to look for more of the stuff.

And with oil at US$100 per barrel, previously uneconomical oil zones become viable. This and the development of new technology have made it possible for oil companies to exploit the vast shale oil and gas resources.

That has been a boon for the US oil industry over the past 10 years. And soon enough it could provide a similar boon in the UK and China as both countries seek to exploit their shale resources.

By the way, we’re not saying reserves are higher just for the sake of it. We’ve got the proof.

Yesterday, oil giant BP plc [LON:BP] released its Statistical Review of World Energy report. The report gives a neat overview of proven oil reserves by country for 1993, 2003, 2012 and 2013.

To put that in perspective, the current proven reserves mean that at current supply and demand levels there is around 50 years of proven oil supply.

That assumes explorers don’t find one more drop of oil.

What’s that we hear? Is that more hollering about Peak Oil?

Before the Peak Oil fanatics get too loud, check out the number for 1993. In that year, world crude oil production was around 60 million barrels per day. At that rate of demand, the oil reserves would have run out in 47 years — in 2040.

Read the rest of this article at Money Morning