The demand for oil and natural gas is discussed in this web page. Other web pages of this Peak Oil web site will cover oil supply, natural gas supply, and alternative energy sources.
Oil Demand. Present world oil demand is about 84 million barrels per day or approximately 30 billion barrels per year.
The Energy Information Administration (EIA) expect world oil consumption to increase at about 2.0 % annually over the next 25 years. Below are some general facts on oil and gas consumption that makes the 2.0% annual increase forecast look low:
a. Americans are energy hogs.
b. We use one out of four barrels of oil produced in the world.
c. Each year, Americans consume over 7 billion barrels of oil and 24 trillion cubic feet of natural gas. That works out to 20 million barrels of oil per day and about 70 billion cubic feet of natural gas per day. That is a little over 25 % of the world's total consumption of oil and a little over 25 % of the world's total consumption of natural gas.
(Note: China uses about 7,000,000 barrels of oil per day and their oil usage is climbing dramatically.)
d. Natural gas demand in the U.S. will rise over 50 % in the next decade according to some experts. The biggest use for natural gas is for heating in the winter and air conditioning in the winter. I question the estimated increase of 50 % unless it is strictly a "wish we had" figure. We may wish for 50 % more natural gas but there may be no way to satisfy the wish barring a miracle. (Note: LNG can help the natural gas situation a lot but 50 %!? We had better get to work building offshore LNG terminals, fast!)
Obviously, to meet the projected increased demand for natural gas, the gas is going to have to come from somewhere. Where will the natural gas come from? Most experts say that natural gas production has peaked in the U.S. (1972) and will never rise again.
Can Canada increase their production to supply our deficit? Canada already supplies us with about 15 % of our natural gas. They will also need to hold back some natural gas from export to use in the production of oil from tar sands because all present processes require large amounts of natural gas to produce and refine oil from the tar sands. And the U.S. (and China) badly needs the tar sand oil!
Total Canadian natural gas reserves peaked at 99 trillion cubic feet (trf) in 1984 and declined over the years to about 55 trf in late 2004. Canada exports almost 50 % more gas than it consumes but consumption is increasing. At the present rate of the decline in natural gas reserves, Canada could soon be facing the problem of cutting back on exports to assure that their domestic market is supplied.
It should be noted that the shale formations of Canada are presently being explored for natural gas. Similar shale formations in the United States have recently yielded significant quantities of natural gas and hopefully the shale formations of Canada will do the same.
But it is obvious we cannot indefinitely depend on Canada to make up our natural gas shortfall We will have to turn increasingly to imported LNG for that.
What about Mexico? They seem to be rapidly increasing their consumption of natural gas. Will they sacrifice and forego their own projected consumption increase for the comfort of U.S. citizens? Remember NAFTA. Mexico went along with that treaty because they thought they were going to get a bunch of jobs out of it. The jobs did not materialize. Will they trust us again?
Note: Both Canada and Mexico are planning installation of a number of LNG terminals and will, in turn, deliver imported natural gas (LNG) to the United States. Much, if not most, of this LNG will come from overseas, not from Canadian & Mexico domestic sources.
e. If you have any faith in weather forecasters, the demand for energy situation is not going to get better in the next few decades. And there are doomsday forecasters that predict much heavier demand for energy as world population increases and global warming advances. And, lest we forget, gasoline prices at the pump are already going through the roof.
f. And one last bit of bad news. We are at or near world Peak Oil production. This is where the problems start, not when the last bit of oil is produced and consumed many decades from now. At Peak Oil, production of oil will soon begin to decline while demand will continue upward at a rapid rate. Repeat: production down - demand up! It is a recipe for the perfect storm.
Get ready to rumble!!
1. Next War & Future Wars. World War 2 is behind us as is the Vietnam War, and the two wars with Iraq. Where will America's next war be? Syria? Iran? Venezuela? Cuba? One thing almost for certain, America's future wars will often be Peak Oil-related!
2. Oil. New oil fields are being found but they are not enough to replace quantity of oil being produced. Oil supply will drop and oil shortages will develop.
3. Oil & Energy Crisis. Peak Oil is approaching and an oil crisis and energy crisis are already developing.
4. Oil Company Stocks. Energy crisis & oil shortage approaching. Time to buy oil company stocks.
The US uses a lot of oil and natural gas and oil and gas demand is expected to increase. We will increasingly be depending on other countries for to satisfy our oil demand and our gas demand as our own deposits of oil and gas deposits decline. The U.S. may be in for a rude awakening when both Peak Oil and Peak Gas arrive and oil & gas demand becomes far greater than the world supplies of oil & gas.
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