Good news about Global Oil Production!
Forecasts of oil production are converging as better data and analysis eliminate many possible scenarios — including the apocalyptic ones so beloved by doomsters. The experts in this group look for an imminent (starting somewhere in the next few years) peak in liquid fuels (petroleum & biofuels) production, followed by either a long plateau or a slow decline. These five experts cover a broad spectrum. With three Peak Oil advocates included, this can be considered a conservative forecast.
- Oil industry experts and long-time Peak Oil advocates (Colin Campbell, Jean Laherrere).
- The highly respected Editor of Petroleum Review, Chris Skrebowski. He produces the Megaprojects report, listing large oil development projects.
- A talented amateur, Stuart Staniford.
- Sadad Ibrahim Al Husseini, retired EVP of Saudi Aramco.
These forecasts are comforting but challenging. The global economy will thrive in this scenario if we can reproduce the increases in efficiency, fuel switching and conservation seen in 1979 – 1993 — a 14 years of global economic growth with no increase in petroleum consumption. Esp. if global economic growth slows during the next year or two, perhaps building up a cushion of excess production capacity.
If! If we heed the advice of the February 2005 “Mitigations” report by Hirsch et al and immediately initiate crash programs to prepare for Peak Oil. If we successfully develop alternative sources, effective methods to increase efficiency, and encourage conservation. Then we can, with a little luck, manage a smooth transition to the next Age of Energy.
The doomsters speak confidently of certain disaster following Peak Oil. They are probably wrong, unless we make it so.
Some of these are for petroleum only; adding in biofuels gives a more optimistic picture.
Stuart Staniford, “Hubbert Theory says Peak is Slow Squeeze“, posted on The Oil Drum (5 December 2005). He shows that one common methods of forecasting oil production suggests that global decline rates will be small and accelerate slowly — reaching 4%/year only after 40 years have passed. This is not described as his personal or even preferred forecast. Note that the last line (below) suggests that none of his family are third world peasants, or he might look more favorably on the prospect of economic growth.
I wanted to highlight and extend a very important point made by WesTexas the other day, which is that the Hubbert linearization method has a lot to say about future decline rates. And what it has to say is rather optimistic (at least by the admittedly low standards of the Peak Oil community). If you believe the Hubbert theory, average net decline rates in global production will be quite low for several decades.
…The good news is that we’ve got several decades of declines that are quite modest (no doubt interrupted by various nasty shocks and alternately periods when things go somewhat better). That makes adaptations much more feasible – be they more efficient vehicles, tar sands, coal-to-liquids, or windmills. You may recall my claim that the decline rate is the main thing that controls whether the economy can adapt or not…
…The fact that BRIC countries will continue to grow faster than the US and Europe will place more pressure on the western economy’s oil usage than a global analysis might suggest. However, this theory does imply that some economic growth will be possible for quite a long time.
Whether that’s a good thing for the long-term future of humanity is a different question.
Liquids production will significantly decline after a likely bumpy plateau 2010-2020 and likely chaotic oil prices. 30 years from now, production of easy oil will be 35% less than to day but production of all liquids (including from coal and biomass) only 5% less than to day.
- He suggests that the average rate of global production decline from existing fields is aprox 4%, but c/b higher.
- He forecasts peaking in 2011 – 2012 (with seasonal shortages earlier).
- He forecasts that the post-peak global production decline rate will be 1/2%, accelerating to 2-3%/year (does not say how quickly) — warning that it could be higher.
Sadad Ibrahim Al Husseini’s presentation at the Oil & Money Conference in October 2007. He believes that petroleum production has already peaked and that…
Global oil and NGL capacity is on a 15 year plateau constrained by mature reservoirs and finite reserves.
Colin Campbell predicted in the January 2008 ASPO Newsletter that petroleum production will drop from 87 million barrels/day peak in 2010 to 70 mbd in 2020 — an annual rate of decline of 2.2% (slowing to 1.8% over 20 years).
There are other voices with different views.
Mike Rodgers of PFC Energy (a major energy consulting firm), “Global Hydrocarbon Liquids Supply Forecast“, presentation at the September 2007 ASPO Conference. They forecast that global petroleum production (ex-biofuels) will peak at aprox 100 million barrels per day by 2015. The accompanying graph shows an immediate but gradual decline after 2015.
Matthew Simmons, “Another Nail in the Coffin of the Case Against Peak Oil“, 16 November 2007. He makes a strong case that the quality of our energy data is poor, and an interesting case that petroleum production has already peaked. He is a major voice in the Peak Oil community, both as an evangelist and author of the provocative book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy (2005).
Some thoughts about short term energy challenges
Good news: if the global economy slides into a recession, the world might have a surplus of oil during the next few years. Global recessions (real GDP growth of less than 2% — not falling GDP) are rare animals, but we might see one in 2008 or 2009.
Bad news: this might hurt us, long term. If oil prices crash, that might derail efforts to prepare for Peak Oil. It will take 20 years to get ready, and by most estimates it will arrive much sooner than that. We are on the clock.
The relationship between global liquid fuel demand and real global GDP changes over time. For the last few years it has looked like this…
Change in liquid fuel demand = .6 * (global GDP growth – 2%)
While unreliable for long-term analysis, this probably works for short-term guessing. This suggests that oil demand will be flat if the global economy slides into a recession.
*** The idea for this post and three of the references came from this post on a valuable site for those seeking commentary on both sides of the Peak Oil debate: Peak Oil Debunked, the anti-matter version of The Oil Drum (both are on my blogroll). This site describes the many ways we can adapt to a post-peak oil world, debunking the hype and doomster fantasies of some peak oil advocates.
Update: This article provides much support for the conclusions discussed here. I strongly recommend reading it. It is brief, clear, and well-supported.
For more information about Peak Oil
- When will global oil production peak? Here is the answer! (1 November 2008)
- The most dangerous form of Peak Oil (8 April 2008)
- The world changed last week, with no headlines to mark the news (25 April 2008)
- Peak Oil Doomsters debunked, end of civilization called off (8 May 2008)
Here is an archive of my articles about Peak Oil.
Here are other resources about Peak Oil.