These are the most important conclusions from a new report of the Peak Oil Netherlands Foundation (PONL). The report is supported by the well- established Dutch energy research institute ECN. PONL and ECN are thus a lot more pessimistic than the International Energy Agency (IEA), the energy thinktank of the OECD, that published her expectations last week.
PONL has been founded in may this year by a group of ‘concerned citizens’ who are worried about the energy supply. The report ‘World Oil Production & Peaking Outlook’ has been written by the 20 year old Rembrandt Koppelaar, who studies Nutrition & Health at Wageningen University.
Although Koppelaar is not an expert by profession, his findings are supported by professor Jos Bruggink, who has been leading the unit Policy studies at ECN for years and has been installed as professor at the Free University of Amsterdam in august.
‘The conclusions of PONL are very much in line with my perception of the oil peak problem’, says Bruggink. ‘A peak in production between 2010 and 2020 is very well possible’. Just like PONL, I am convinced that the oil optimists of the IEA have a bias towards a single sided and reassuring point of view. This leads to an inactive attitude at the governmental level and private sector, and brings great risks with it.’
The Paris based IEA, that is considered by western governments as the most authoritive source of information on the oil market, is receiving criticism from a group of scientists, engineers and investors. This so called ‘peak oil movement’, founded by Collin Campbell, a pensioned geologist that worked for oil companies like Texaco and BP, beliefs that the global oil production will reach its highest point in the near future.
The IEA does not want to consider this. But, according to Bruggink, the ‘doomsayers’ might very well be right.
With PONL, the Netherlands now has its own branch of the international peak oil movement. According to Rembrandt Koppelaar of PONL, the ‘misplaced optimism’ of the IEA is mostly based on three assumptions. The first assumption consists of optimistic expectations with respect to the number of new fields that can still be discovered. ‘On this point the IEA bases itself on a report from 2000 of the United States Geological Survey. The USGS in its turn tries to support their prediction by trends from the past. But these have not been correlating with reality for quite some time now. Since as early as 1964 the number of new discoveries is gradually decreasing. Since 1986 more oil has been consumed than is discovered, currently even twice as much.’
The second assumption of the IEA is that the production from existing fields can continue to increase. Currently, technical limitations prevent the extraction of more than roughly 35% of an oil field. When this so called ‘recovery factor’ can be increased to 40%, this would mean a sudden and significant increase of existing reserves. ‘It is true that the recovery factor has increased from 22% to 35% between 1980 and 2004,’ says Koppelaar. ‘But it remains to be seen whether this trend can be continued. In some fields it succeeds, in others it doesn’t.’
The third assumption of the IEA consists of high expectations with respect to so called ‘non conventional oil’, like the tar sands in Canada and Venezuela. The amount of oil that is present in the Canadian tar sands alone can be compared with the oil reserves of Saudi Arabia, according to the IEA.
Koppelaar does not dispute this, but according to him, the annual production that is possible from these fields is limited by geological and logistical reasons. ‘The exploiters themselves expect that, until 2030, the production from Canadian tarsands will be no more than 5 million barrels per day. This means the contribution to the world’s oil production will be limited.’
Based on his data, Koppelaar draws the conclusion that world oil production will reach its peak between 2012 and 2017. ‘Only a clear discontinuity from previous trends in production could shift the peak further into the future.’
The researcher finds it more likely that the opposite would happen: a peak before 2012. ‘In 2003, some 90% of all discovered oilfields were in production. Within soon, this number will be practically 100%. The number of newly discovered fields is gradually decreasing. There are now already 30 oil producing countries, like the United States, that are past their peak, and more are joining.’
Koppelaar thinks the government should take action to facilitate the transition towards an economy that relies less on oil. ‘Research for the American Department of Energy indicates that some twenty years are needed for a smooth transition.’
The government and the Central Planning Bureau (CPB) are not yet convinced of the seriousness of the oil depletion threat. ‘The CPB are assuming that oil prices will come down to unrealistically low levels. I really hope that they will finally take a good look at this problem and stop with simply following the IEA blindly’, according to the researcher.