Peak-oil related excerpts from Shell’s National Dialogue on Energy Security, released in February.

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The Myth: We’re running out of oil.

The “peak oil” theory came up in nearly every market. While this wasn’t necessarily surprising, the pervasive nature of this strongly held belief was. Similarly, in a related survey that we conducted, more than half of the respondents said global oil production will peak within the next 20 years.13 This leads people to dismiss oil and gas from being part of the future energy portfolio. Also not surprisingly, we found that few people were aware of the scale of untapped domestic resources on the Outer Continental Shelf, or of the huge undeveloped unconventional resources, such as oil shale, oil sands and heavy oil.

The Reality: Oil resources are out there, should we choose to develop them.

When individuals think of peak oil, they tend to think that a sudden drop in global production follows soon thereafter. We don’t expect to see this on a global level. It is possible, though, that we will reach a plateau in the next few decades, followed by a gradual decline of conventional oil and gas production.

There is no shortage of molecules of oil and gas in the ground. However, there are multiple influences that will affect the pace at which this can, and will, be developed.

On the demand side, we are seeing a step-change in the growth of demand for energy, particularly as emerging economies, such as China and India, enter more energy-intensive phases in their economic development. It will be vital to become more efficient in how we use energy and to develop unconventional sources of oil and gas (such as oil sands), biofuels and vehicle electrification to meet this surge in demand. All energy sources added together will struggle to match demand – we will need all of the energy we can get.

On the supply side, many existing reservoirs are facing a natural decline in production. This means that high levels of continuous investment are required just to maintain status quo or to invest in enhanced oil recovery (EOR) techniques. In addition, ever-increasing levels of investment are required as smaller fields are developed and more complex frontier environments become the targets for hydrocarbon exploration and production, alongside the development of unconventional oil and gas supply. There are also uncertainties about the pace of investment in sensitive regions such as the Middle East and Latin America. Naturally, major resource-holding governments seek also to develop their sovereign reserves at a pace that matches their own economic goals.

There are plenty of uncertainties, which is why we explore future possibilities through scenarios. Looking at the oil picture, we find it misleading to think in terms of concepts like peak oil or try to put a timeframe to it. The significant economic point comes when tensions arise between the growth of global demand for energy and the pace of investment, production and supply. We believe we are entering such a period and will face this increasingly for some time to come.

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“Easy oil” will not keep up with demand. While we do not subscribe to the peak oil theory, the truth is that, particularly outside the Middle East, the readily accessible sources of conventional oil are being depleted. [28] To tap new resources requires hard choices. In some cases, that means spending more on exploration and development to find and tap ultra-deepwater resources as we are doing in the Gulf of Mexico. It means technology investments to convert oil sands to useable oil fluids as we are doing in Canada. And it means making the policy decisions necessary to grant access to areas where federal restrictions currently limit exploration and drilling.

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[13] In the town hall survey, 30 percent of respondents predicted global oil production would peak in less than 10 years; 28 percent predicted it would peak in 10-19 years. The general population responses were even higher: 33 percent and 35 percent respectively.