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Peaking of world oil production: Recent forecasts

Robert L. Hirsch, World Oil Magazine
Robert L. Hirsch
Because oil is a depleting, finite natural resource, world conventional oil production will reach a maximum, or peak, after which production will decline.1 Using differing methodologies and information of widely varying quality, experts and organizations have attempted to forecast the likely year of world conventional oil production peaking. The recent range of such estimates extends from late 2005 to an apparent denial that it will ever happen. Almost all forecasts are based on differing, often dramatically differing geological assumptions. Explicit account of investment rates in new and expanded production has been relatively rare.

Because of the large uncertainties, it is difficult to define an overriding geological basis for accepting or rejecting any of the forecasts. However, the International Energy Agency (IEA) recently warned that worldwide investment in expanded oil production has been considerably less than needed to continue world oil production that is adequate to meet expected world demand. Thus, geological limits may be yielding to inadequate investment.

Peak oil presents the world with a risk management problem of tremendous complexity and enormity. Prudent risk minimization requires the implementation of mitigation measures roughly 20 years before peaking, to avoid a very damaging world liquid fuels shortfall.2 Since it is uncertain when peaking will occur or whether it will be due to geological or investment constraints, the challenge is indeed vexing.


We summarize recent forecasts for peaking world oil production. Our focus was on people and organizations that have special oil industry expertise and/or significant influence, recognizing that we may have overlooked some that are worthy of mention.


It is noteworthy that a number of industry insiders have now expressed the view that the era of easy, low-cost oil is past. This, in itself, heralds a fundamental change in the world oil outlook. A number of knowledgeable individuals and organizations have provided forecasts for when world conventional oil production might reach a peak. It is clear that there is no consensus among the forecasters, which is not surprising because of different methodologies and the fact that various oil reserves estimates are open to considerable question.

Because of the large uncertainties, it is difficult to define an overriding geological basis for accepting or rejecting any of these forecasts. Some commentators suggest that self-interest may have impacted some of the forecasts; others speak of over-optimism, over-pessimism, political pressure, lack of understanding of petroleum geology, etc. Some forecasters explicitly discuss the issue of underinvestment in exploration and production, which could lead to markedly different future world oil production, while others do not. None of the forecasts take explicit account of terrorism or resource nationalism,49 both of which are very uncertain but could have profound impact.
(April 2007)
Robert Hirsch is Senior Energy Program Advisor, SAIC, and co-author of the Hirsch Report.

Study: ‘Peak Oil’ Will Be Reached by 2018

Melinda Wenner, Live Science via Fox News
Global oil production will peak sometime between next year and 2018 and then decline, according to a controversial new model developed by a Swedish physicist.

Since 1956, when American geophysicist M. King Hubbert correctly predicted that U.S. oil reserves would hit a peak within 20 years, experts have debated when the same might occur globally.

Some oil companies and consultancy firms such as Cambridge Energy Research Associates speculate that oil will peak sometime after 2020, but a number of oil geologists and executives predict it will happen much sooner.

…Previous oil-peak models have used a “top-down” approach to estimate future production based on three factors – past rates of total production, estimates of how much oil is left and a steady decline rate.

The new model, developed by Fredrik Robelius, a physicist and petroleum engineer at the University of Uppsala in Sweden, uses a “bottom-up” approach based on field-by-field analyses of the 333 giant oil fields in use today. These together account for more than 60 percent of today’s oil production.

…Caltech physicist David Goodstein agrees.

“Oil geologists have gone to the ends of the Earth to search out big fields, and it’s very unlikely that another big one will be found,” Goodstein told LiveScience, adding that Robelius’ methodology appears to be sound. “Even if another huge one is found, it would only put off the peak by a year or so.”

…And new technologies could help solve extraction problems, said Sam Kazman of the Competitive Enterprise Institute, a non-profit public policy think tank in Washington, D.C.
(18 Apr 2007)
We ran an item on Robelius’s dissertation last March — it’s good to see Fox News and MSNBC picking it up.

The article also appears at the Live Science site, where it originated, with the headline: “Oil Production Could Peak Next Year.” Interesting that Fox News and MSNBC wrote a new headline emphasizing the later date of 2018.

In an otherwise fairly good article, reporter Wenner refers to the Competitive Enterprise Institute (CEI) as a “non-profit public policy think tank.” Nope, that’s sloppy journalism. Quote CEI if you want, but don’t disguise its nature. SourceWatch has this on the CEI:

On its website CEI states that it “serves as both a think tank-creating intellectual ammunition to support free markets-and an advocacy organization-putting that ammunition to use in persuasive ways.” [2]

It postures as an advocate of “sound science” in the development of public policy. However, CEI projects dispute the overwhelimng scientific evidence that human induced greenhouse gas emissions are driving climate change. They have a program for “challenging government regulations”, push property rights as a solution to environment problems, opposed US vehicle fuel efficiency standards and been a booster for the drug industry.


The Century of Roots

A.M Samsam Bakhtiari, website
…I seriously believe that the peaking of the global production of crude oil — commonly know as ‘Peak Oil’ — has occurred in 2006 [1] and will be ‘The Event’ bound to dominate the history of the 21st century: one of those ‘Historical Inflection Points’ [2] which abruptly change “fundamentals” in the course of World History…

After some 147 years of almost uninterrupted supply growth to a record output of some 81-82 million barrels/day [mb/d] in the summer of 2006, crude oil production has since entered its irreversible decline. This exceptional reversal alters the energy supply equation upon which life on our planet is based. It will come to place pressure upon the use of all other sources of energy — be it natural gas, coal, nuclear power, and all types of sundry renewables especially biofuels. It will eventually come to affect everything else under the sun…

…most probably, the popular masses will be directly exposed to two main types of shock:
1. A Material Shock;
2. A Psychological Shock.

Due to the benign decline gradient in crude oil production during the early ‘Post Peak’ period — only 3 mb/d over the first transition period spanning 2007 to 2010 — the Material Shock will not pose insoluble problems and accommodation will prove possible with minimal gradual pain. Moreover, sizeable amounts of wastage in most developed societies will provide a welcome cushion for the initial cuts to be made.

Not so for the Psychological Shock. This shock, in stark contrast, will be electric and abrupt. Stress, fear, depression, despairs and nightmares will be the order of the day — as people come to face the not-so-palatable facets of ‘Post Peak’. When confronted with this series of unknowns, with the trauma of Change, people will try to protect themselves by automatically reverting to their past, to the known, to what they believe to be “real and true” — in a word, to their reassuring ‘Roots’…

I define the overall concept of ‘Roots’ as a mixture of traditions, language, art, festivals, monuments, academies, museums, institutions, religion, creeds, legends and myths — and God knows that myths are always infinitely more attractive than reality. Or still, ‘Roots’ could be said to be

“Past Excellences that have withstood the Test of Time”

Every living society on Earth — be it a community, a city, a region, a country or a continent — has its very own set of pell-mell ‘Roots’. Some rather primitive, some extremely developed. Interestingly, there is little correlation between a society’s ‘Roots’ and the present status of the ‘Tree’ it supports and nourishes — the former being in the Past, and the latter in the Present. But, interestingly, the Future will come to depend more on the Past than the Present…

Soon, the attraction of ‘Roots’ will prove irresistible, and woe to those societies who have little or none, and to those who had some but have cut them off (for example, by changing their language or alphabet), and also to those who have failed to properly tend their valuable ‘Roots’ over time.
(April 2007)
To access the article, scroll down the page at Dr. Bakhtiari’s website to the latest articles.

Dr Bakhtiari has recently retired as a senior advisor for the National Iranian Oil Company in Tehran and has written several books and more than 65 papers on the Iranian and international oil and gas industry. More by/about Dr. Bakhtiari on EB.

“Saudi Arabia has Peaked…” [Futurology]

Alan Drake, The Oil Drum
Tomorrow morning, as you are starting your first cup of coffee, you turn on the morning news to “In a surprise announcement last night, King Abdullah of Saudi Arabia announced that Saudi Arabia would not be able to increase oil production. He urged conservation by oil importing nations. Reaction has been …”

After cleaning up a messy coffee stain and vainly trying to log onto TOD, what to do?

And what should, and will, the US and the rest of the world do?

Every responsible government will immediately raise gasoline taxes (this excludes the United States of America).

Switzerland will investigate how their 31 billion Swiss franc Alp Transit and related railroad improvements might be speeded up, completing the shift of freight from truck to (hydro).electric rail. Completion by 2020 does not seem quite so comfortable as it did yesterday. German standards for insulation in new construction are adopted and the push for more geothermal heat is intensified. Debate about a new nuclear plant starts anew.

Basically, Switzerland just speeds up along the path that they were already on.

…And what of the USA?

I would suggest the following measures, divided into when the conservation effects will first become significant (most will grow in significance over time) and not when they are first implemented.

I would advocate only measures that improve Global Warming or at least, make it no worse.

I also see a North American natural gas crisis shortly after Peak Oil, so massive shifting from oil to natural gas is a poor strategy. However, there will be increased use of Natural Gas and Propane/Butane for transportation and this will require reduced natural gas use for generating electricity, and less NG as well as Propane/Butane for water heating and space heating in order to make available light hydrocarbons for transportation.

Immediate Savings –

National 50 mph speed limit for the next decade (likely to be renewed unless things turn out “better than expected”).

Increase fuel tax on airlines for improved Air Traffic Control (higher taxes > less used)

Reduce mass transit fares via federal subsidy, especially off-peak (a dime?)

Put a 50% federal tax on all tolls, increasing tolls and commuting costs.
(19 April 2007)

Petroleum Institute Reaches Out

John Gartner, Wired
Red Cavaney, the president of the American Petroleum Institute had a conference call with bloggers and newspaper reporters today. The API is also doing a press tour across the country to educate the media on energy issues.

An API PR person explained the reason for the tour: “API and its members clearly need to do a better job of explaining their business. The basic awareness of fundamental energy issues of those who claim to be informed and subsequently influence others is, well, less than great.” Snap! Thanks for inviting me!

It was odd that most of the conversation centered not on petroleum, but on ethanol..

…When asked about peak oil and declining reserves, Cavaney said that the stone age didn’t end because they ran out of stones. Similarly, the oil age won’t end because we run out of oil — it will be because something better will take its place. He also said a carbon tax — which the API doesn’t oppose or endorse — isn’t likely to be considered during this Congressional session, and probably not for the next either.
(19 April 2007)
Contributer LW adds:
A Wall Street Journal posting [WSJ Energy Roundup] of the same conversation described Cavaney indicating that after peak — whenever peak might occur — the decline would be gradual. There was also a suggestion of the world being underexplored.

The Houston Chronicle energy blog had more coverage of the API conference call.

UPDATE: Leanan at The Oil Drum points out a transcript and podcast are online. The Apr 21 Drumbeat at TOD has some discussion about the “Stone Age” quote, including this from b3NDZ3La:

I was SO SURPRISED to learn that stone was the energy source of choice for those cave guys!

And this from Cosgrove:

Moreover the parallel being drawn is stupid. The stone age was characterized by the use of stone as a construction material and human/biomass energy. The iron and bronze age, similarly, are characterized by the use of those materials and biomass energy. In our time, oil is primarily used not as a material but an energy source! Hence, the analogy being drawn between oil and stone is simply stupid. This is one of those stupid talking points that are too often used to introduce wrong assumptions into public discussion (in this case, the notion that there will be progress in the form of a technological based solution to supplant oil for reasons as yet unspecified.)

UPDATE Apr 21. Robert Rapier, one of the participants in the conference call, has posted on TOD excepts from the transcripts and comments, with an emphasis on peak oil. Recommended.

Ig Nore Ad Vice

After Khebab posted Part II of his very extensive Oil Shock Model analysis, this comment by Engineer deserves a bit of reflection:

You can make a (simplified) elevator speech about how it works, and most people will get it. Don’t mention the math.

This appears as an intuitive bit of advice, but then tristero from Digby’s blog offers a swift counterpoint. Tristero’s opinion centers around the outcome of framing the scientific dialog and perhaps dumbing down and making the results more exciting.

…So, no pandering from me.

A second rhetorical observation I can make from Khebab’s post. Why, and how, with the billions of dollars invested in the fossil fuel industry does it take amateurs to decipher our reality-based future? I bet that the oil industry actually doesn’t want to know, and even if they did know they never seriously wanted to teach it to the engineers and scientists studying the discipline. Considering how fundamental these mathematically-based rate theories that Khebab and I delve into, it borders on the criminal that people more “in the know” completely ignore this train of thought.

I can come up with any number of analogies to hypothetically missing theories or laws in other engineering disciplines, but they would seem preposterous to imagine actually happening. Like what would happen if we built up our electronics industry without actually understanding Faraday’s Law.
(18 Apr 2007)
I disagree with Mobjectivist’s first contention that making oil depletion analysis understandable to ordinary people is “pandering.” For one thing, the subject and the math are not that complicated. Sheesh, if ordinary people can learn Windows, they certainly should be able to grasp oil depletion.

However, translating subjects into layman’s terms does take effort and attention. It is a talent, as witness that master of science communication, Isaac Asimov. Most scientists and engineers are bad at talking to a lay audience – they are too close to the subject. I’m hoping that some technical writer will feel inspired to summarize the discussions about Hubbert Linearization, etc. so that the rest of us can understand the issues.

Unless these ideas are translated, they will not be effective in public debate. Special interests who understand how to communicate (e.g. CERA) will prevail.

On Mobjectivist’s second point is well taken. Why are oil companies and government agencies asleep at the switch? -BA