World Energy Balance Outlook and OPEC Production Capacity: Implications for Global Oil Security

Ali Mirchi, Saeed Hadian, Kaveh Madani, Omid M. Rouhani () and Azadeh M. Rouhani
Additional contact information
Ali Mirchi: Department of Civil and Environmental Engineering, Michigan Technological University, 1400 Townsend Dr, Houghton, MI 49931, USA
Saeed Hadian: Department of Civil, Environmental and Construction Engineering, University of Central Florida, 4000 Central Florida Blvd, Orlando, FL 32816, USA
Azadeh M. Rouhani: Encon Systems UK Ltd., 4 Charter House Mulgrave Rd, Sutton Surrey, SM2 6LB, UK

Energies, 2012, vol. 5, issue 8, 1-26

Abstract: The imbalance between energy resource availability, demand, and production capacity, coupled with inherent economic and environmental uncertainties make strategic energy resources planning, management, and decision-making a challenging process. In this paper, a descriptive approach has been taken to synthesize the world’s energy portfolio and the global energy balance outlook in order to provide insights into the role of Organization of Petroleum Exporting Countries (OPEC) in maintaining “stability” and “balance” of the world’s energy market. This synthesis illustrates that in the absence of stringent policies, i.e ., if historical trends of the global energy production and consumption hold into the future, it is unlikely that non-conventional liquid fuels and renewable energy sources will play a dominant role in meeting global energy demand by 2030. This should be a source of major global concern as the world may be unprepared for an ultimate shift to other energy sources when the imminent peak oil production is reached. OPEC’s potential to impact the supply and price of oil could enable this organization to act as a facilitator or a barrier for energy transition policies, and to play a key role in the global energy security through cooperative or non-cooperative strategies. It is argued that, as the global energy portfolio becomes more balanced in the long run, OPEC may change its typical high oil price strategies to drive the market prices to lower equilibria, making alternative energy sources less competitive. Alternatively, OPEC can contribute to a cooperative portfolio management approach to help mitigate the gradually emerging energy crisis and global warming, facilitating a less turbulent energy transition path while there is time.

Keywords: oil; OPEC; energy balance; energy security; renewable energies (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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