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Projection of world fossil fuel production with supply and demand interactions (paper excerpt)

Abstract

Historically, fossil fuels have been vital for our global energy needs. However climate change is prompting renewed interest in the role of fossil fuel production for our energy needs. In order to appropriately plan for our future energy needs, a new detailed model of fossil fuel supply is required. It is critical to know if fossil fuels will still be able to supply most of our energy requirements and meet the ever increasing energy demand in the future. Answering these questions is critical in order to identify potential periods of energy shortages; so that alternative energy resources can be utilised in a timely way. The aim of this study was to develop a model to predict fossil fuel production for the long term based on historical production data, projected demand, and assumed ultimately recoverable reserves for coal, gas and oil. Climate change is an important issue confronting society, and it is hoped that the work contained in this thesis will aid climate change modeling by focusing attention to realistic fossil fuel production projections. Fossil fuels are currently an essential component in the global economy and the growth of the human population. The fossil fuel production projections from this study suggest that many of the IPCC fossil fuel projections appear overly optimistic. Based on the assumed URR values, it is predicted that global fossil fuel production will peak before 2030. For this reason, it is imperative that appropriate action be taken as early as possible to mitigate the effects of fossil fuel decline, to avoid energy shortages in the near future.

Paper description:
The modelling applied an algorithm-based approach to predict both supply and demand for coal, gas, oil and total fossil fuel resources. Total fossil fuel demand was calculated globally, based on world population and per capita demand; while production was calculated on a country by- country basis and summed to obtain global production. Notably, production over the lifetime of a fuel source was not assumed to be symmetrical about a peak value like that depicted by a Hubbert curve. Separate production models were developed for mining (coal and unconventional oil) and field (gas and conventional oil) operations, which reflected the basic differences in extraction and processing techniques. Both of these models included a number of parameters that were fitted to historical production data, including: (1) coal for New South Wales, Australia; (2) gas from the North Sea, UK; and (3) oil from the North Sea, UK, and individual state data from the USA.

The combined supply and demand model included the capability that demand and production could be influenced by each other, i.e. if production could not meet demand then future demand for that energy source was reduced. In this study, three options were considered. Firstly, the STATIC option resulted in demand and production acting independently of each other at all times. Secondly, the DYNAMIC option allowed both total demand and total production to change from the STATIC situation when there was a difference between the two. Finally, the INDEPENDENTLY DYNAMIC option was an extension to the DYNAMIC situation, but treated each fuel source individually when applying the supply and demand interaction, with both demand and production being able to vary.

The model required estimates of Ultimately Recoverable Resources (URR) for coal, gas and oil, where the following definitions were used for each resource: (1) Coal: anthracite - lignite; (2) Gas: conventional and unconventional (tight, shale and coal bed methane); (3) Oil: conventional (API>10o) and unconventional (natural bitumen, extra heavy oil, oil shale). Following a critical review of the literature, included in this study, three cases were adopted. CASE 1 and CASE 3 being lowest and highest recent estimates, respectively, and CASE 2 being author’s best guess based on the information available. The URR values for CASE 2 were, total (60,800 EJ), coal (19,350 EJ), gas (17,680 EJ) and oil (23,780 EJ).

The supply and demand model was used to obtain future predictions for individual and total fossil fuel productions for a number of different scenarios, including CASE 1, CASE 2 and CASE 3 and STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC supply and demand interaction options.

The following results were obtained:

Coal: For CASE 2, peak production year remained constant at 2019 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 212–214 EJ/y. Similarly, for CASE 1, peak production year was the same at 2014 for all three demand-production interaction options. However, for CASE 3, there was some variation in the peak production year at 2020, 2019 and 2030 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options respectively. Of interest also, was the projected peak in Chinese production, accounting for well over a third of the total production, of between 2010 and 2018, which compares with reported literature values in the range 2015–2033.

Gas: For CASE 2, peak production year varied from 2028, 2047 and 3034 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The corresponding peak production outputs were 145, 157 and 143 EJ/y. For CASE 1, peak production year varied from 2019, 2033 and 2026, respectively, for the production interaction options. For CASE 3, the peak year range was much narrower, varying between 2060 and 2062. The overall range of between 2019– 2062, was much wider than that reported in most of the literature of 2020 ± 10 years. While it was found that the production of unconventional gas was considerable it was unable to mitigate conventional gas peaking.

Oil: For CASE 2, peak production year remained almost constant at 2011-12 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 179–188 EJ/y. Similarly, for CASE 1, peak production year was the same at 2005 for all three supply and demand interaction options. For CASE 3, peak production year varied only slightly at 2019, 2011 and 2016 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The important outcome was that for all scenarios the maximum peak year was 2019.

Combined fossil fuels: For CASE 2, peak production year remained almost constant at 2016–18 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 509–525 EJ/y. Similarly, for CASE 1, peak production year was essentially same at 2012–13 for all three supply and demand interaction options. For CASE 3, peak production year varied from 2021 to 2029 across the three supply and demand options. In all scenarios it was found that natural gas offers the biggest future potential, and not coal.

It is important to be caution about the long term future projections. In particular wars, natural disasters, economic depressions, new technologies, presumably will occur in the future and have not been accounted for in the projection. The long term projections presented in the thesis are to show the reader what is possible and plausible.

The thesis predictions were compared to predictions made by the well-known Hubbert model, which is based on a symmetrical production profile about a peak year. It was found that the resultant Hubbert curves were generally in good agreement with total fossil fuel, coal and natural gas production predictions. This result was perhaps not surprising, given that the asymmetry constant, defined the cumulative production in the peak year divided by the URR peak production, was mostly in the range 0.4–0.6; where a value of 0.5 indicates symmetry. There was a disparity between the Hubbert curve and model predictions for unconventional oil, which was due to the external disruptions in production.

Fossil fuels are currently an essential component in the global economy and the growth of the human population. The fossil fuel production projections from this study suggest that many of the IPCC fossil fuel projections appear overly optimistic. Based on the assumed URR values, it is predicted that global fossil fuel production will peak before 2030. For this reason, it is imperative that appropriate action be taken as early as possible to mitigate the effects of fossil fuel decline, to avoid energy shortages in the near future.

Editorial Notes: Thanks to Michael Lardelli for alerting us to this paper and supplying the description. The full PDF of the thesis can be downloaded here.

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