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Introduction

I have been writing on oil supply issues since 1995, in particular the imminent supply gap and the looming new energy era; forecasting a peak in global oil supply arriving between 2010 and 2020 depending on demand growth. The Energyfiles report Oil & Gas – Global Ten-Year Projection (now in its 2007 edition) was published in response to queries about the data used to arrive at these conclusions.



Nonetheless, despite new evidence in the form of higher than expected demand, capacity squeezes and price rises, there remains a view amongst some geologists and economists that the peak is many years away and even that technology, new energy sources, and new efficiencies will make it irrelevant. Although I believe such views are largely driven by wishful thinking, not scientific analysis of data, I do not want to digress on this subject here. It is unrealistic to expect a reader to believe one or other view (except the one he or she already holds) without properly comparing conflicting data analyses.



Instead I want to address energy supplies after peak; the size of the so-called supply gap and how it might - or might not - be filled by alternative transport fuels and by efficiencies. This article is about potential production rates and uses the Energyfiles databases to establish history matches and forecasts, based wherever possible, on thousands of bottom-up field and basin production profiles.

For instance, in 2004 Exxon Mobil earned more money -- $25.33 billion -- than any other company on the Fortune 500 list of largest corporations. But by another measure of profitability, gross profit margin, it ranked No. 127.

Jay Taparia, a lecturer in finance at the University of Illinois at Chicago and an expert on interpreting financial statements, said a quarterly profit or loss can only be judged in context, given the history of the company and its long-term prospects.

"People who are freaking out about Exxon's record profit are the same people who were freaking out about AOL Time Warner's record losses" of $98.2 billion in 2002, he said. "One quarter's net income or loss doesn't mean anything."

A $9.9 billion quarterly profit is mostly a function of Exxon Mobil's size. It had sales of $100 billion this quarter, more than any other U.S. company. At its current rate of growth, Exxon Mobil will be the biggest U.S. corporation this year by revenue, bigger than Wal-Mart Stores Inc., which had $288.19 billion in revenue last year. Generally, the bigger the company, the bigger the bottom line.

Even so, many co

Statements like this bear a hint of irony, since the government collects billions of dollars from U.S. oil companies and takes an average of 45.9 cents from every gallon of gasoline purchased.

America’s energy companies are already providing a “windfall” of taxes — including corporate income, franchise, payroll, property, severance, and excise taxes. New filings with the Securities and Exchange Commission (SEC) show that the largest oil and gas companies in America (Chevron, ConocoPhillips, and ExxonMobil) are set to pay or remit over $158 billion in worldwide taxes for 2005.

This tax burden on American “big oil” nearly equals the total economic output of Iran and exceeds total GDP in 150 of the 184 countries ranked by the World Bank.

In 2005 alone, these companies set aside more than $44 billion to pay corporate income taxes, nearly a 50 percent increase from 2004. The average effective tax rate for the major integrated oil and gas industry is estimated to equal 38.3 percent, while the rate for the market as a whole is estimated to equal 32.3 percent.

State Sales, Gasoline, Cigarette, and Alcohol Tax Rates by State, 2006

# Elimination of unsightly and hazardous pits
# Significant reduction in volume of drilling wastes