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.

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.

Jean Laherrere, April 2006, conclusion of his presentation to the European Geosciences Union:

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.

Chris Skrebowski, presentation at the September 2007 ASPO Conference:

  • 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.

Delays Will Tighten Global Oil Markets

For more information about Peak Oil

  1. When will global oil production peak? Here is the answer! (1 November 2008)
  2. The most dangerous form of Peak Oil  (8 April 2008)
  3. The world changed last week, with no headlines to mark the news   (25 April 2008)
  4. 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.

3 thoughts on “Good news about Global Oil Production!”

  1. No technological barriers, just stupidity, cognitive dissonence, greed, short term thinking, et al.

    Some very simple example:

    * Latest plans coming from France, to expand the EU fast train network to replace all air traffic that flies less than 300-400 miles. Given the way these trains are getting faster all the time we can reasonably extrapolate that that could be extended to 500-600 miles in (say) 20 years.
    * You can buy a VW Golf now in most countries (with the right diesel quality) that will do over 1,000km on a 60 ltr tank.
    * Mini-nuclear plants are now available, capable of running a district or village.
    * Solar thermal plants (for those areas that are suitable of course) can be built at comparable sizes and costs to coal ones, and with far, far lower running costs.
    * Ditto (or getting very close), solar voltaic, wind, geo-thermal, et al.
    * Intra city public transport is technically capable of delivering high quality, cheap transport for the majority of peoples’ journeys (as it does in many places).

    Cost? As oil and natural gas prices go up it is now getting into the region of actutally being cheaper. Take the UK, it is now being hit by 15%+ electricity price increase, paying a heavy price for over investing in natural gas fired power stations, really shouldn’t have stopped building nuclear power stations 20 or more years ago.

    Note that coal is not the answer. Fistly it is environmentally disasterous (in getting it, shipping it and burning it), secondly, when the oil does run out, the human race is going to need it for chemicals, plastics, drugs, etc, in future centuries.

    But just like global warming, we need to extract digits now. Who knows, it might even create a whole new economic renaissance as well, moving away from a mass consumption culture to a capital building one.

  2. These matters are front and center here in Houston where the ASPO conference was held a few months ago.

    What amazes me is that this is not an exotic, high-wonk matter. It lends itself to ordinary politics. And, of course, silly politicians have already tried several forms of stupid exploitation from left-wing tree-hugging to right-wing absurdity like the “hydrogen car” or merchantable malarky like “corn ethanol”. Most politicians who have tried to exploit these matters politically rather than, say, in literature or film, have failed. But, they tried nothing more than trial balloons — a billion here and a billion there — and failed. So, it is an orphan issue actually.

    But, what killed it is actually popular culture and sophistication about technology — something — like military affairs — professional politicians are almost totally removed from today.

    Anyway, populists in Texas may take another run at this. I am looking at a party platform plank involving the old “oil import fee”, new-fangled “diesel tuning”, and increasingly available “bio-diesel” fuel. It is a hard sell to politicians, but the street loves it. And, those guys do have to get elected after they have exhausted themselves and the rest of us with their costly, media-centric, soap-operas and sound-bites.

  3. Arnold Roquerre

    What is most interesting is no one has considered the consequences of a “Global Cool Down”. There are many scientists, meterologists and solar physicists who are adamant that the current warm up is in line with the Roman Warm Up and the Medival Warm Up and a Cool Down similar in temperature drop that had occured during the “Little Ice Age” is very probable.

    If this is the case, energy demand will push throught the roof and the pain will be very noticeable for all! Solar will not be a great solution if the weather gets wetter and cloud cover increases. Biofuels will take a hit as the growing season shrinks and acreage is loss to snow cover.

    Expansion of nuclear and increasing research on developing fussion reactors are the only solutions. Also, switching to hydrogen fuel and a hydrogen fueled transportation fleet would give the flexibility needed to utilize different energy sources to produce a truely universal fuel equal to petroleum. Hydrogen can be created from a myriad of energy sources and with further research produced costs will drop.
    Fabius Maximus replies: I agree that we may be putting over-emphasis on recent climate changes, which we poor grasp due to short and coarse instrument records (the longer-term proxy record is so far highly unreliable, in my opinion).

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top
%d bloggers like this: