Peak-oil theory has steadily been gaining traction over the years. A survey conducted recently by COMPAS Inc. found a majority of Canadian CEOs polled subscribe to peak-oil theory — the idea that the planet is running out of easily accessible and economical oil — but believe it is difficult to predict when peak production will occur.
More than 60% of the 117 CEOs agreed with the theory. Only 18% said new technologies and new discoveries will always allow for production increases. Another 16% not only espoused the peak-oil view but said we will be unable to satisfy demand in the near future.
“Finding easy-to-get-to oil is a thing of the past,” wrote one CEO. “Demand in the developing countries will increase as wealth builds. They will not have the money for new technologies. That will fall to the developed countries.”
The CEOs also offered their views on the price of oil, which had increased by about $30 from December to the time the survey was conducted in June. The best explanation for the rise, according to the CEOs, is that oil hit an irrational bottom price of less than $35, and is now returning to normal. Only 13% said supply and demand issues were responsible for the increase.
Over the next two decades, oil prices will rise dramatically and then even out as alternative energy sources become commonplace, according to half of the respondents. “Oil is used primarily for transportation, and alternatives for transportation fuel needs to be found,” according to one CEO. “There is a plentiful supply of natural gas, and government policy should encourage use of natural-gas-powered vehicles.”
The CEOs were divided on the price of oil in the future. About a third agreed oil will cost $120 a barrel in five years, but they were far less certain about price beyond then. When asked about the cost in 20 years, 34% of the CEOs said they didn’t know or had no opinion. One oil bull did jump into the fray: “The price of oil will be $1,000 a barrel in 20 years.”