Fear over the environmental impact of using oil, gas and coal reserves means we may never run out of untapped energy stores, according to a leading petroleum industry economist.
“Concerns about carbon emissions and climate change mean that it is increasingly unlikely that the world’s reserves of oil will ever be exhausted,” BP Chief Economist Spencer Dale told the Society of Business Economists Tuesday.
This means the relative price of oil will not necessarily increase overtime, reports Reuters.
Spencer’s remarks come amid concerns that an oversupply of oil is pushing the price of crude back under $50 a barrel. Global oil demand is slipping, at a time when supply is high, The Wall Street Journal reports. This is putting downward pressure on oil prices.
Consulting firm PVM oil broker David Hufton told The WSJ oil prices could be higher, “as long as OPEC do not produce more than this year’s average. The problem is that they will.”
“Oil producers will face another year of severe pain if Iranian sanctions are lifted early next year and other OPEC members do not make way,” Hufton said.
Iran’s sanctions will soon be lifted, freeing up the country to boost its production levels which will add to the already flooded market. Iran will be able to increase output from its current 2.9 million barrels a day to 3.6 million, according to The WSJ.
The International Energy Agency projects global demand will slow to 1.2 million barrels a day from the current 1.8 million, adding to the downward price pressure on oil. American output is expected to decline however, with forecasts showing the U.S. shale industry will face its biggest loss on record in November.
Despite these short term trends, Dale sees global energy demand rising 37 percent by 2035, but maintains the “growing recognition” over global warming will push energy powers away from oil to green technologies. BP, Shell and Saudi Aramco will be among the oil giants gathering this December in Paris, as part of United Nations climate talks.
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