How close to peak oil are we?
Rob Hopkins of Transition Culture writes:
At last night's Food and Farming in Transition evening at Dartington Hall, of which I shall write more soon, Chris Skrebowski, editor of the Petroleum Review and author of the Megaprojects reports, gave a talk which used a Powerpoint which he had to zip through quite fast. ... here is Chris's presentation, an opportunity for all you peak oil anoraks to update your presentations with the latest graphs!
BA: Below is a text transcription of 9 of the 24 slides.
Chris Skrebowski: Trustee of the Oil Depletion Analysis Centre and
Editor of Petroleum Review, Inergy Institute, London
---
Who am I?
- Chris Skrebowski has spent half his working life in the oil industry and the rest as an oil journalist
- Free of corporate or political pressure he brings a healthy scepticism to the problem
- Not pessimistic by nature, not anti-Oil
- Basic approach to Peak Oil analysis
- Don't guess, assume or hope - let the numbers talk
- Observe what companies do, not what they say.
So what is 'Peak Oil'?
- It is the point when further expansion production becomes impossible because:
- New production flows are full offset by production declines (depletion)
- You never run out of oil
- You do run out of incremental flows
- The world needs oil products to support growth
Latest BP statistics show Peaks are already happening
- OECD production peaked in 1997 and has now declined by just under 2 million b/d (8.8%)
- Non-Opec, non-FSU production peaked in 2002
- North America/Mexico peaked in 1997
- North Sea - UK/Norway/Denmark peaked in 2000 now declined by 1.2 million b/d (19.2%)
- Around 25 significant producers in delcine
- About 35% of global production from decliners
The practical realities
- The world needs oil production flows
- Consumers need deliver flows
- Reserves are only useful as flows
- Peak oil is when flows can't meet the required demand
- Worry about flows not reserves
- Many talk of reserves and forget flows
Seven key pieces of evidence suggesting we are close to Peak
- Falling discovery rate, few large discoveries
- Increasing number of countries in sustained depletion
- Companies struggling to hold production
- Non-geologic threats [to] future oil supply
- The current lack of incremental flows
- Few countries with real growth potential
- Sustained high oil prices
A simple observation - or why peak will be earlier than most people expect:
"Global production falls when loss of output from countries in decline exceeds gains in output from those that are expanding."
Post-peak we are going to need other energy sources - Opportunity
- How fast will supply decline post-peak?
- Possibly around 2-3% / year like the US onshore but initially at just 1-2%
- But, it could be much faster
- Suppliers could anticipate, ration out supplies, delay peak and force adaptation
- Some might use military strength to commandeer supplies
My conclusions at very best
- Supply will remain tight and prices high barring a major economic setback
- Oil supply will peak in 2011/12 at about 92-94 million barrels/day
- There will be [be] supply shortfalls in winter before Peak
- Oil supply in international trade may peak earlier than the oil production peak
- Aided by CERA's optimism we are still in denial
- There are huge challenges and huge opportunities
