Well... Duh!

I'm not sure if the editor who wrote the headline for this article in the Wall Street Journal (subscription) was being funny or ironic or if the idea had just occurred to him for the first time. Here's the headline:

Demand for Oil Could One Day Outstrip Supply

Here's what prompted what, in the military, we used to call a BFO: a Blinding Flash of the Obvious.

A respected oil-forecasting group predicted that the energy industry may be unable to produce enough oil to meet projected demand by the end of the next decade, in a study that lends support to a small chorus of analysts who warn that a peak in petroleum output is looming in the years ahead.

In a presentation yesterday, analysts from Washington-based PFC Energy warned that the world won't be able to produce more than 100 million barrels of oil a day, only some 20% more than current output of about 82 million barrels a day, and well below demand projections for the end of the next decade.

"Even production of 100 million barrels a day can only be sustained for a few years," said Roger Diwan, a PFC analyst. "Every year since the 1970s, we have been consuming much more oil than we have been discovering."

Now where have we been hearing that? Um... give me a few minutes...

Combine this "revelation" with oil companies revising their reserves downward in recent years and you get a real, live petroleum shortage. Not in a hundred years, not in fifty. Maybe in as little as 10 years. The result? Well, at first, just rising prices. But with so much of the world economy dependent on petroleum by-products, pricing will only do so much to curb consumption.

I'll leave it as an exercise for the reader to figure out what comes next. Leave your thoughts in the comments.