In the previous article I discussed the International Energy Agency reports World Energy Outlook. Peak Oil is a highly debated subject and a Peak in the Global Production of Oil may seem like a bizarre scenario to many people. We have had an enormous access to cheap energy for several generations now. For a long period of time the United States was the world’s leading producer of oil, this changed however in 1972 when the US reached its Peak with a production around 9,5 million barrels per day (mb/d), today the US production of Oil is only around 5,5 mb/d. Today the US imports around 10 mb/d making it the world number one oil importer.
The US Energy Information Administration (EIA) also provides statistical information and forecasts just like IEA. In the most recent report International Energy Outlook 2011 the EIA provides a completely different analysis than IEA. Like you might remember from the other article IEA believed that the world production of crude oil would continue to increase by around 1% per year until 2030 up until the World Energy Outlook 2010 report. In the 2010 report the IEA assessed that the world production of crude oil peak in 2006. This was a sharp turn compared to the previous reports.
The 2011 report provides by the EIA provides a completely different forecast. The EIA believes that the World Production of Crude Oil will continue to increase by 0,7% per year up until 2035. In short: According to the IEA the Peak in Crude Production is at least 23 years away. In addition to this the EIA also believes that oil sands will increase from 1,8 to 4,8 mb/d in 2035, Coal to Liquids from 0,2 to 1,7 mb/d, Gas to Liquid from 0,1 to 0,3 mb/d, Shale oil from 0,0 to 0,1 mb/d and bio fuels from 1,5 to 4,7 mb/d (IEO 2011: 28).
The EIA discussion also lacks a serious discussion about the Oil Reserves in the Middle East. This is a subject that was raised by Matthew Simmons in the book “Twilight in the Desert”.
Simmons lifts several key notions:
• The production in Saudi Arabia is concentrated around a few giant fields; Ghawar alone produces somewhere between 55-65% of the total Oil Production in Saudi Arabia.
• The fields have been producing oil for several decades
• The Proven Reserves increased to 150 billion barrels in 1979 when the management of Aramco was taken over by nationals. The number continue to rise to 160 billion barrels in 1982 and in 1988 another 100 billion barrels was added to the proven reserves leaving Saudi Arabia with the largest oil reserves in the world; over 260 billion barrels.
• Since 1988 over 47 billion barrels has been produced just until 2005 and still the proven reserves of 260 billion barrels has not reduced.
This is also a subject that was highlighted after the WikiLeaks release of US Embassy cables when report that suggested that the reserves in Saudi Arabia may in fact be 40% less than stated was released. None of these issues is discussed by the EIA.
The future projections Energy has been very positive for a long period of time. The IEA started to change their projections in 2010, the EIA still holds on to the same type of prognosis that the IEA presented in 2009. It’s very hard to know if the IEA or EIA got it right; only time can tell. But it’s important to understand that the analysis that the US politics is based upon relies on a much more positive outlook. If it turns out that EIA is wrong in their analysis it means that the policies and planning implemented by the US has been based upon incorrect information.
I have yet not seen any political party that has lifted Peak Oil as a potential problem. Peak Oil is a concept that challenges the expectation of growth, something that we have been used to for a very long period of time. It’s my guess that we are now starting to go from a period with a steady economical growth to period where the old truths may no longer be valid. We are now seeing a process when political and economical institutions are trying to make sense of what is going on. I do not believe that the world will run out of fossil fuels, but I do believe it’s possible that the access to these fuels may start to decrease instead of increasing. This presents a problem for all the economical and political institutions of the world since it means that they will have to adapt to a reality that does not corresponds to the situation that they have encountered in the past.
Peak Oil and Our Mental Models - The WikiLeaks Cable and The Worlds Largest Oil Fields
Is Peak Oil Already Here?
Things You Can Do In Order To Prepare For Peak Oil