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Presentations by Thomas A. Petrie, vice chairman of Bank of America Merrill Lynch, draw large, attentive crowds. At a recent event hosted by the Independent Petroleum Association of Mountain States, the audience listened intently to his views on topics ranging from peak oil to geopolitical trends to hybrid vehicles. With nearly four decades of industry experience and $180 billion in transactions informing Petrie’s forecast, the atmosphere in the room recalled Warren Buffett’s annual address to investors of Berkshire Hathaway.
“One of my beliefs from that discontinuity is that the progressive maturity of the resource base, at 80 million-plus barrels per day of global production and consumption, is going to translate into a peak-oil event.”
Low-cost oil is in irreversible decline, he said. He overlaid on an International Energy Agency chart of world primary energy demand (with demand expanding by 40% between now and 2030) the notion that the marketplace this year or in 2015 will see market recognition of peak oil. “We’ll know in a few more years if the upward slope of demand that the IEA has built in is accurate,” he said.
According to the IEA, there must be real, absolute shrinkage in consumption of oil throughout the OECD (Organization for Economic Cooperation and Development) countries to accommodate disproportionate growth from non-OECD countries, including China (42%), India (17%), and others.