Perspectives on the Future of Oil

Abstract

This paper assesses the risk of near-term oil shortages due to resource limits. Part I reviews the basics of the problem, including: • definitions, • broad quantities of oil available, • a simple model of how production develops from a group of fields, • actual production profiles of countries past peak. Part II examines the adequacy of the data available for estimating the total quantity of conventional oil, discussing separately: • the oil in reserves, • oil expected from reserves growth, and • oil yet-to-find. A contrast is made between the data used by the oil industry, and that available in the public domain. Part III outlines approaches taken by a variety of groups to model the future supply of oil. These groups include Campbell/Laherrère, the IEA, USGS, the EU, and some oil economists. Part IV presents oil production forecasts from a number of these groups for some specific countries; for the “Rest-of-the World”, and for the world as a whole. In Part V, the scope for non-conventional oil, and also gas, to offset a decline in conventional oil is examined. Finally, in Part VI, some wider implications of the situation are presented. The general arguments of the paper are: • It is useful to define conventional oil by recovery method. • Oil production in a region goes over peak when flow from new sources cannot compensate for the declining flow from existing sources. • Public domain reserves data hold only proved reserves, and contain serious errors. • Industry data are more reliable, and hold (proved + probable) reserves. • Much of ‘reserves growth’ is simply the increase from proved to (proved + probable). • The world's conventional oil ultimate is probably between 2,000 and 2,700 Gb. • But find rates are low, so peaking dates are not affected by high ultimates. The conclusions of the paper therefore are: • Non-OPEC oil production is currently close to its resource-limited peak. • The world's all-oil resource-limited peak is likely within about a decade. • These resource limits are likely to have serious economic and political repercussions.