The world will face an oversupply of oil

A report published by Harvard University argues that we will have an oversupply of oil in the next decade.

The author of the report, energy expert and former oil industry executive Leonardo Maugeri argues that oil production should increase in the coming years. This contradicts the conventional wisdom that the "oil boom" will not repeat itself in the foreseeable future. Maugeri stresses that "contrary to popular belief, the world's oil supply will rise to such an unprecedented level that it will outstrip consumption. He explains this forecast by the wider use of modern technologies, including horizontal drilling and hydraulic fracturing (fracking). The growth of oil production could be 20 percent in eight years, which could cause a "collapse" of oil prices, and the decline in fuel prices will occur as early as 2015.
This development, if the forecast comes true, could lead to a dramatic turnaround in automotive industry strategy. Every major automaker is now investing heavily in alternative fuels, electric cars, hybrids and hydrogen fuel cell models. Electric cars are already trying to carve out a niche as a major alternative to gasoline, but high prices, limited infrastructure and customer dissatisfaction with technical capabilities are preventing the choice of such a vehicle. Not surprisingly, a recent report by the American National Petroleum Council supports Maugeri's findings. It states that gasoline and diesel engines are "likely to dominate for decades." The study found that infrastructure and technological barriers -- as well as high costs -- will delay a massive shift to alternative fuels. The Petroleum Council also recommends that governments not invest too much in alternative fuels, but invest only with commercial benefits in mind. "There is great uncertainty about alternative fuel vehicle systems to become economically and environmentally attractive by 2050," the study says. "Thus, government policy on technology must be neutral without losing sight of market dynamics."

According to the foreign press for ForTrader.ru