SUMMARY

Contents:  Overview, The Calculations, Growing Awareness, Solutions, Further Information.

Overview

 

            World Production of All Hydrocarbons
                      
Source: C.J. Campbell, ASPO.

The above is Dr. Campbell’s forecast of the global production of oil and gas, from both conventional and non-conventional sources, out to 2050.

The production of conventional oil holds fairly steady at close to its maximum until about 2010, and then enters inexorable decline, driven by the limit of the world’s resource of this type of oil. The combined production of deepwater and polar oil also peaks around this date.

Production of extra heavy and tar sands oil expands, but is not sufficient to offset the declining output of conventional and related oils.

Conventional gas production is likely to reach a plateau around 2015, set mainly by resource constraints, which can hold till about 2040 before decline sets in. Production of non-conventional gas continues to increase.

The combination of the fall in production of conventional oil, and the plateau in conventional gas, leads to a production peak in all world hydrocarbons around 2015.

These coming hydrocarbon production peaks (firstly, of all non-OPEC oil; then of all oil; and finally of all hydrocarbons) will place massive strains on the economies of the world. Market signals alone will provide insufficient warning of the problems ahead. Mitigating the effects, and handling the political consequences, will require high levels of public comprehension, and international co-operation.

For more detail on the coming hydrocarbon production peaks, and the historical context, see The Oil & Gas Situation

The Calculations

The forecast of conventional oil production given above is based on a detailed appraisal of the amount of oil in the world by country, both discovered and yet-to-find, and on calculations of the rate that this oil can be produced. These calculations are unquestionably among the most detailed and precise currently published.

The calculations on the rate that non-conventional oil can increase are based on known projects, and on reasonable extrapolations into the future. Non-conventional oil faces a number of fundamental constraints (cost, investment requirements, energy requirement, energy payback times, other input requirements, and pollutant emissions, including elevated CO2 levels.) More work is needed to define the various limiting growth rates that non-conventional oils might achieve.

The production profile of conventional gas is less certain than that for conventional oil, but will be similar to that shown, and is resource-limited in the medium term.

For the future production of non-conventional gas, the same remarks apply as for non-conventional oil.

For definitions, and details of these calculations, see The Calculations. The outcome of the calculations is tabulated under ASPO Information>>Results.

For more general introductory and teaching material on global oil, its discovery and depletion, refer to the ASPO Tutorial.

Growing Awareness

This picture of the future of oil and gas is serious, but not yet widely understood. This is partly because the history of Humankind has been one of technical progress, and changing energy supplies, so warnings of approaching resource limits tend to get discounted.

But this ignorance of the current global oil situation is extraordinary. The method for calculating the date of the peak in conventional oil production has been known for over a century, and the key piece of information required, the estimate of the world’s original endowment of conventional oil, has remained essentially unchanged for 40 years.

As a result, almost any book on energy from the 1970’s correctly put the date of global conventional oil peak around the year 2000. The only significant change since then has been on the demand side: the oil shocks of the 70’s flattened anticipated demand and somewhat delayed the peak.1

In essence, the world has largely forgotten what it knew in the 1970’s. A few dedicated analysts kept the information alive, like monks in the Dark Ages,2 but as oil experts left the business most new entrants never learnt.

As a result, a complete oil mythology has recently arisen. This holds that:
 
-  Proved reserves guarantee oil supply for at least 40 years, and gas for 60 years.
  -  The world is “running into oil”, not out.
  -  Technology and price will always be able to push back the oil peak.
  -  Past oil forecasts were wrong; forecasting oil’s future is impossible.

It is easy to counter these views (see The Oil & Gas Situation), but at present they are deeply entrenched, and are purveyed by most governments,3 and by many advisors to government.4

Fortunately, there is now a growing awareness of the oil and gas realities. A number of retired oil executives are on record on depletion,5 and also a member of the United States Geological Survey.6 Technical papers on the global oil endowment are widely available (e.g., that by BP’s Manager of Reserves and Resources,7 from the USGS, and elsewhere 8), and there are recent books on the topic.9 In addition, at least one one institution, the BGR in Germany, is addressing the issue on a technically sound basis.10

However misleading information is still offered to governments, and the latter are too poorly informed to detect the errors. Examples include the submission to the European Parliament by BP that contains serious errors;11  the recent response to the UK House of Lords, also by BP, quoting simply the ‘reserves-to-production’ (R/P ratio) reassurance of “40 years of oil and 60 years of gas”;12  submissions by Exxon to the UK's PIU Energy Review and the EU's DG-TREN, which likewise emphasise R/P figures, and fail to mention production peaking;13  and recent Shell's reassurance to European leaders of "100 years' of gas".14

Despite such dis-information, institutional understanding of the depletion of the world’s conventional hydrocarbon resources is slowly increasing. But it is late in the day to take effective action.

Solutions

Possible responses to the situation are listed under Solutions. It will require courage, and high levels of international co-operation, to manage the hydrocarbon supply difficulties that lie ahead.

Further Information

For further information see the references below, starting perhaps with the Scientific American article,8  and then those of Bauquis 5 and Harper;7 the two academic articles from Reading,8 and the books by Campbell, and Deffeyes.9 Additional sources are listed under ASPO Information>> Publications.

Notes:

1.  See Past Forecasts.
2.  Word of mouth: Hubbert to Ivanhoe to Campbell; Hubbert to Deffeyes; Warman to
Campbell.
3.  E.g.:  The UK’s DTI, the US’ EIA.
4.  For example:
  -  Mr. J.V. Mitchell, Royal Institute of International Affairs (RIIA), London; sometime consultant to the EU’s Directorate-General for Transport and Energy (DG-TREN).
  -  Mr M. Keay, formerly UK Dept. of Trade & Industry, then RIIA, now Chief Executive, World Coal Institute; Specialist Adviser to the UK House of Lords Select Committee on the European Union, considering the EU’s Green Paper (Nov. 2000) ‘Towards a European Strategy for the Security of Energy Supply’. (Select Committee’s Report: Energy supply: How secure are we? Session 2001-02 14th Report, HL Paper 82, published 12th February, 2002.)
 
-  Professor P.R. Odell, Specialist Adviser to the UK House of Commons Trade and Industry Committee examining ‘UK Security of Energy Supply’, (Second Report of Session 2001-02, HC 364-I, published 7th February, 2002).
  -  Dr. W. Schollnberger, Panel member to EU DG-TREN Conference on ‘Energy Safety & Security in Europe’, Barcelona, 18th-19th October 2001.
  In understanding this provision of advice, it is believed that Mitchell, Keay, and Odell have no geological background, no access to industry oil reserves data, and little expertise to carry out calculations on the global recoverable resource, or to make informed technical comment on the analyses of others. To put it bluntly, much of the current oil debate is between scientists who have good data, and
an understanding of the geological constraints, and non-scientists who do not. The ear of government is still mostly with the latter, despite the strenuous efforts of the former over more than the last decade to bring the facts to government attention.
 
 Dr. Schollnberger is a special case. Potentially he has access to adequate data, but he is not part of BP’s resources evaluation team; and makes his own assessment of global recoverable oil that is out of line with virtually all other estimates. His high case, under industry central assumptions, corresponds to a global recovery factor over 100%.
5.  Examples include:
   -  J.F. Bookout (CEO of Shell Oil Co. from 1976 to 1988): Two Centuries of Fossil
Fuel Energy, Episodes, 12/4, pp 257-262, 1989
  
-  Bowlin; also Robert Anderson, senior executives of Atlantic Richfield (ARCO). (Bowlin article was at: www.arco.com/corporate/news/p020999.htm).
  
-  L.F. Ivanhoe (former Chief Earth Scientist, Occidental Petroleum): Updated Hubbert Curves Analyze World Oil Supply. World Oil, November, 1996, pp 91-94.
  
-  F. Barnabé (Chief Executive of ENI): ‘Cheap Oil: Enjoy it While it Lasts’, Interview in Forbes Global Business and Finance, June 15 1998, pp 22-24.
   -  W.H. Ziegler (former Head of Exploration Studies and Senior Group Advisor, Petrofina; & Manager, Regional Assessment Group, Esso Exploration Europe): quoted on pp 22-26 of The Coming Oil Crisis, C.J. Campbell, MultiScience & Petroconsultants S.A., 1998
   -  J.H. Laherrère (former Deputy Head of Exploration, TOTAL, France): ): Numerous publications.
   -  C.J. Campbell (former Exploration Manager in several companies, including Amoco and Fina): Numerous publications.
  
-  P-R. Bauquis, Special Advisor to the Chairman, TotalFinaElf. See: A Re-appraisal of Energy Supply and Demand in 2050, Oil & Gas Science & Technology, Rev. IFP, Vol. 56 (2001), No. 4, pp 389-402. An excellent paper covering a range of important issues.
6.   L. Magoon, USGS Open File Report, 00-320 Version 1.
7.   F. Harper. Ultimate Hydrocarbon Resources in the 21st< Century. Presentation at the American Assoc. of Petroleum Geologists conference: 'Oil & Gas in the 21st Century', Sept. 12-15th 1999, Birmingham, UK. (To my knowledge, the AAPG did not publish proceedings from this conference, so copies should be requested directly from the author.
8.  E.g.:
   -  C.J. Campbell and J.H. Laherrère. The End of Cheap Oil. Scientific American,
March 1998, pp 60-65; (and see the following papers in the same issue on related topics).
   -  Data published annually by consultancies, including IHS Energy/Petroconsultans.
   -  See sources referenced in:
   -  R. Bentley. Global oil and gas depletion: an overview. Energy Policy, Vol. 30, No. 3, February 2002, pp 189-205.
  
-  R.W. Bentley, R.H. Booth, J.D. Burton, M.L. Coleman, B.W. Sellwood, G.R. Whitfield.  Perspectives on the Future of Oil. Energy Exploration and Exploitation, Vol. 18, Nos. 2 & 3, pp 147-206, Multi-Science Publishing Co. Ltd., 2000.
   -  Data from ‘official’ sources (EIA, IEA, etc); but these need very careful handling if they are not to be mis-interpreted. Eschew all public domain ‘proved reserves’ data.
9.   The Coming Oil Crisis, C.J. Campbell, MultiScience & Petroconsultants S.A., 1998;
      ISBN: 0 90652211 0.
      Hubbert’s Peak. K.S. Deffeyes, Princeton University Press, 2001; ISBN 0-691-09086-6.
    
The Hydrogen Economy. J. Rifkin. Tarcher/Putnam, 2002, ISBN 1-58542-193-6.
10.  BGR (Bundesanstalt für Geowissenschaften und Rohstoffe ), Germany, see: www.bgr.de; and publications.
11.  W. Schollnberger to the EU Parliament (see Note 4, above). For comments on the errors in this paper, see Footnote 6 of the Energy Policy paper referenced in Note 8, above.
12.  UK House of Lords report: Session 2001-02; 14th Report, Select committee on the
European Union: (see Note 4, above). Oral evidence paragraph 230, Professor P. Davies, Chief Economist, BP, page 79.
13.  Exxon Mobil submissions to: The UK Cabinet Office (PIU) 2001/2 Energy Review,
(www.cabinet-office.gov.uk/innovation/2001/energy/submissions/ ExxonMobil.pdf); and to the EU Directorate-General for Transport and Energy, “ExxonMobil Contribution to the Debate on the [November 2000] Green Paper: Towards a European Strategy for the Security of Energy Supply.”  For example, the latter has: “Commentators tend to focus on reserve to production ratios … 40 years for oil and 61 years for gas. However, such ratios fail to take account of probable reserves and reserves yet to be discovered. In addition, [there are Orinoco] heavy oils … and tar sands [and gas-to-liquids]. On this basis, R/P ratios in excess of 100 years will likely be achieved. Resource availability is simply not the issue.”
   If availability means simply ‘what is out there’, Exxon's statement is strictly true. But if availability includes the rate at which these resources can be made available, then Exxon’s submission is very misleading, as there is no mention of the mid-point peaking of conventional oil, nor of technical constraints in the production of the non-conventionals.
14.  A recent Shell presentation (IAEE Conference, Aberdeen, 2002) shows Europe surrounded by gas sources adequate for over 100 years; but fails to mention either production peaking, or the fact that other hungry regions, such as the U.S. and Asia, already have plans in place to access this gas.

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Updated: 4/Dec./2002