The US Energy Information Administration – No Peak in World Oil Production in another 23 years

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.

Analysis
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.

Other Articles
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

Is Peak Oil Already Here?

The International Energy Agency is the leading international agency when it comes to forecasting the world’s future energy use. In the report World Energy Outlook the international institution presents its forecast. The first report in this series was presented in 1994. From 1994 IEA has presented a very positive outlook for future energy. In the first report from 1994 the World Oil production was expected on increase to 94 million barrels per day (mb/d) in 2010. From 2002 to 2009 World Energy Outlook the forecast for oil production was expected to increase to 120-105 mb/d. In the 2008 World Energy Outlook Oil Production was expected to increase with 1% per year up until 2030. In 2010 a new analysis was presented. In this report the Peak in world production of oil was believed to have taken place in 2008 with a World Production of around 70 million barrels per day. This report suggests that Peak Oil may in fact already have taken place. If this analysis is correct it means that instead of having 20 years of additional growth in Oil Production ahead of us we may now be on the other end of Hubberts Peak. Peak Oil has been a highly debated subject for a long period of time. The future forecasts have often been described as very positive with future growth in production and reserves. Many of the researchers within the Peak Oil Movement have provided a more problematic analysis.

Oil is one of the most important commodities in today’s world. It has very energy content and is crucial for many areas like transportation, agriculture and the petrochemical industry. Research has also shown that there is a strong correlation between economical development and the access to cheap energy.

Analysis
Peak Oil is only one of many complex problems that the world may face. If we have truly reached the Peak in world oil production or not can only history show. There are a number of other problems that also interact; the world population has recently reached 7 billion people and is expected to reach 10 billion in 2050. At the same time we also have a demographical development in many rich countries with low birth rates that will produce a situation when few young will have to support and aging population. Man Made Global Warming is another trend that may also interact with these problems with more severe weather and increased water shortages in some part of the world.

It’s my guess that we may have reached or is starting to reach a point when many of the resources that our current way of life depends upon will start to decline. I do not think that we have reached this point for all natural resources but it’s possible that we have started to reach this point for some of them. If this is correct we may face a future when an increasing world population will have to make do with less and less resources and that this problem will get increasingly worse over time.

Our political and economical system is today very focused on short term profits and growth. Economical growth and increased average life span has increased for a very long period of time. This is all that our political and economical institutions know and it’s also something that is deeply rooted in all of us from the stories that’s being told throughout our societies.

During the last year we have seen a series of events around throughout the world like Arabian Spring, a severe economical crisis for some of the countries within the European Union and The Occupy Wall Street Movement. It’s my belief that these developments are symptoms at least partly related to other underlying factors like Peak Oil, The Depletion of Renewable and Non Renewable Resources, The Increasing World Population, The Demographical Development and Global Warming and that these factors may continue to put an increasing press on our political and economical system.

Other Articles
Peak Oil and Our Mental Models - The WikiLeaks Cables and The Worlds Largest Oil Fields
The US Energy Information Administration - No Peak in World Oil Production in another 23 years
Peak Oil