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Peak Oil: What About OPEC?

According to BP, OPEC countries are sitting on top of 75% of the world’s oil reserves and account for 45% of world production. So theoretically OPEC could pick up the slack when oil production in non-OPEC countries starts down the other side of Hubbert’s Peak. But there are problems–i.e. war, political unrest.

ExxonMobil says, in its 2005 Energy Outlook, non-OPEC oil will peak in 2010-2020. OPEC can fill the gap by producing 57% more oil than it did last year.

OPEC countries will invest a combined $100 billion in the five years through 2010 so they can increase output, OPEC spokesman Omar Ibrahim says. “We are set to meet the extra call on OPEC to 2030,” Ibrahim says.

It’s hard to really tell about OPEC, though. Nobody really knows for sure how much oil it has, or how much it can produce.

Many energy analysts believe OPEC nations began overstating their resources in the 1980s, when the cartel linked members’ production quotas to the size of their reserves, says Mamdouh Salameh, an independent oil economist. In the late ’80s, cartel members raised their reserve estimates by a combined 300 billion barrels even though none of them had actually found much more oil.

Sadad al-Husseini, Exec. VP for Aramco until he retired in 2004, says it will be difficult for world production of oil to reach 90 million barrels/day in 10 years. That would be millions a day short of EIA projections of consumption.

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