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CARACAS - While this year's record high oil prices are unlikely to come down in the near future, analysts are warning the world's traditional and emerging economic powers to curb consumption, saying that at the current rate, proven reserves will only meet demand up to 2030. "The current model (of consumption) is suicidal," says the energy minister of Venezuela, an OPEC member.
While this year's record high oil prices are unlikely to come down in the near future, analysts are warning the world's traditional and emerging economic powers to curb consumption, saying that at the current rate, proven reserves will only meet demand up to 2030.
"The current model (of consumption) is suicidal," Venezuelan Energy Minister Rafael Ramírez recently told journalists. "The United States, for example, will use up its oil reserves in 10 years, and after that it will go after its rivers, lakes and forests."
This month, Democratic Party lawmakers in the U.S. Senate narrowly blocked a Republican-led bill that would have allowed drilling for oil in Alaska's Arctic National Wildlife Refuge, which has an estimated 10 billion barrels in reserves.
The United States devours one out of four of the 84 million barrels of oil consumed daily around the world, and one out of two litres of gasoline.
But the emerging powers are steadily closing the consumption gap. In India, less than 200,000 new cars were sold annually two decades ago, compared to 802,000 in 2004.
"Since oil began to be drilled in 1859, the world has consumed 900 billion barrels - nearly half of the planet's reserves (according to an oil industry expert quoted by the Wall Street Journal), which means we'll have oil for another 50 years at the most," said Francisco Mieres, a professor of postgraduate studies on the oil economy at Venezuela's Central University.
But because consumption is increasing every year, driven by economic growth rates like those of China - which have ranged between seven and 11 percent a year - "oil will perhaps only last until 2030, even including reserves like Alaska's and the Athabasca tar sands" in Alberta, Canada, Mieres told IPS.
That long-term outlook will also be affected by more immediate political factors, "like the difficulties faced by the United States in the Middle East, rebellious governments like those of Venezuela and (the future administration of leftist president-elect Evo Morales in) Bolivia, or the radicalization of Iran's leadership," he added.
On the economic front, Mieres said these developments would discourage investment by large corporations.
He also mentioned the competition between China, India and other emerging powers to get their hands on the available oil resources, and the real or expected decline in deposits in the North Sea, the Caspian Sea, Mexico or Siberia in Russia.
"The era of cheap oil is over," is a phrase repeated over and over by experts like Ramírez, Mieres or Colin Campbell, the founder of the Association for the Study of Peak Oil & Gas (ASPO).
U.S. benchmark West Texas Intermediate (WTI) soared to 70.85 dollars per barrel on Aug. 30, when Hurricane Katrina devastated New Orleans and much of the U.S. Gulf Coast oil-producing region.
The Organisation of Petroleum Exporting Countries (OPEC) basket of crudes averaged 50 dollars a barrel this year, bringing the members of the oil cartel more than 500 billion dollars in revenues. By comparison, the average price stood at 36 dollars a barrel in 2004, and 28 dollars in 2003.
And the year is coming to an end with international oil prices ranging between 50 and 60 dollars a barrel.
Nevertheless, the late January OPEC ministerial meeting "should decide to reduce output to keep prices from dropping," said Ramírez.
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