Peak oil no more?

Courtesy of Sober Look.

Those who keep professing that “peak oil” is just around the corner or has already been reached should take a look at this Harvard paper (ht John A). The author (Leonardo Maugeri) analyzed oil exploration and development projects field by field globally to determine how oil production is expected to grow. Assuming oil price stays above $70 per barrel, here is what the increase in production will look like by 2020 (in Million Barrels per Day).

Source: Belfer Center for Science and International Affairs, Harvard University

Here is the breakdown of changes in production by country. The largest capacity increases will come from Iraq (whose reserves are thought to be the largest in the world), followed by (interestingly enough) the US, Canada, and Brazil.

Source: Belfer Center for Science and International Affairs, Harvard University  (click to enlarge)


Oil – The Next Revolution

David Llewellyn-Smith


    • Agreed – this is just waffle. An attempt to argue against basic maths. A denial of gravity would be easier.
      Surely no one believes that the earth is daily producing more oil. Did I miss the ice-age?

    • Does not take into account depletion of old oil fields, therefore a worthless piece of oil industry propaganda by a former oil industry executive (who is now a fellow in the Geopolitics of Energy Project) designed to stop us tacking action to transition off oil.

      • The report’s author, Leonardo Maugeri, a former executive vice president of Italian oil major Eni, is a well-known critic of peak oil theories. While the report wasn’t commissioned by BP, his report was produced under the auspices of the Belfer Center’s Geopolitics of Energy project, which is supported in part by a general grant from the oil major….

        • StanGoodvibes

          Well spotted. Sadly these days you have to look closely at the writer of any “scientific” report to see which vested interest is funding the “research”.

          Typically the conclusion is reached first (more oil than we could ever use, forever. Yay!) and then the ‘facts’ are rearranged to make it appear true.

    • Rumplestatskin

      The report is a little confusing. US domestic oil production is expected to be up 25% in 9 years. Yet US domestic oil production is 30% down from its 1970 peak? Link

      THey are also betting on Iraq, whose production volumes show no signs of breaking out

      Aha! They include oil and liquified gases. That’s interesting, and as Avid says, peak oil doesn’t imply peak energy. But how much will supply of alternative liquid fuels continue to rise when prices remain low will be anyone’s guess. I guess there are a lot of committed resources in the pipeline (so to speak).

      • Are they including unconventional oil like Canadian tar sands? There are major impediments (environmental and otherwise) to rapidly increasing production from these sources.

      • Well that’s true, if they have included gas the dance can continue for some time, but there are still constraints.

        It is going to be difficult to make plastics out of gas.

    • Its just that all alternatives to oil (as a transportation fuel) are less convenient and/or less energy dense.

      The world has gone through several major energy transitions from wood to coal, coal to oil, and oil to nukes (actually that last one didn’t quite work out) each time going to a more energy dense fuel. The next one (oil to gas, oil to hydrogen, oil to batteries?) will have to be a backward step in energy density and convenience.

        • The only advantages gas has over oil is its lower carbon content. Compared to petrol and diesel — which come in a convenient liquid form at room temperature — natural gas and hydrogen are much less energy dense and much more difficult to transport.

          Much as I’d love to believe otherwise, the world is not going to price oil out of the market because of its higher carbon content, so gas and hydrogen will have to compete on convenience and energy density alone.

          Fuel / Energy density (MJ per litre)

          Diesel / 37.3
          Petrol / 34.2
          LPG / ~26
          CNG / 9
          Liquid Hydrogen / 8.5
          Compressed Hydrogen / 4.5

  1. The wikipedia link to the author that you provide above states “Mr. Maugeri holds two degrees (Political Science and Economics) and a Ph.D. in international economics”. No offence to the economists who contribute to this blog but as a profession they are notorious for having ridiculously optimistic outlooks that have no relation to reality. If this paper was written by an engineer or a scientist it would be considerably more credible.

        • Why would “big oil” vested interests not be more along the lines to make people believe oil was running out and hence able to be charged higher prices for, as opposed to plentiful?

          My guess is that like Matt Ridley, they have realised that politically motivated lies and self-fulfilling propecies are now the main threat to civilisation, hence it is time to start combating the lies before it is too late.

          • Why would “big oil” vested interests not be more along the lines to make people believe oil was running out and hence able to be charged higher prices for, as opposed to plentiful?

            Don’t be ridiculous! They don’t want people to transition off their drug, obviously. Facepalm.

  2. Ex bank Johnnies cum debt peddlars commenting on science and physics. I’ve read it all now.

    Ahem…70% of the Earth’s surface is sea bed. Once the deep ocean exploration and production technology gets squared away peak oil will be decades away.

    • Absolutely. Google “Fossil Fuels Pyramid”. The harder it is to access and extract (and more expensive because of THAT) the MORE there is OF it.

      We have hit a “plateau” in crude oil price now that will last a LONG time (with spikes if there are wars or disasters or whatever). And technology has always kept ahead of rising oil prices to ensure that the REAL cost of things that rely on oil; driving a car, for example; have barely changed in decades. I say we are at the point now where we can declare victory over “peak oil” as an existential threat (it never was anything more than a politically manufactured one, in reality).

      The comment I just made about the REAL cost of driving a car, for example, is not rocket science; yet most loony Green activists regard you as Galileo was regarded by the medieval papal hierarchy, for saying it. Not to mention the related fact that the cost of running commuter rail systems has gone up in real terms, from being around 1/4 the cost of private cars, per person-km, to being about on par today; hence the ballooning public subsidy costs.

    • That’s the shot velcro – you take a swipe at someone but try to hide so they don’t reproach you. As one of the local mindless trolls, do you get paid for your inane contributions?

    • StanGoodvibes

      Yeah why not check up on the people and sea life in and around the Gulf of Mexico.

      See how that’s working out for them…

      • Aristophrenia

        Peak oil has little reference to production, and certainly no reference to gas, or for that matter solar. Why not declare peak oil a myth because we have solar, or nuclear !

        Peak oil refers to new oil finds, relative to production and demand. As such there have been no significant oil finds. The major fields in the Arctic were known about.

        Peak oil was the progenitor of the 2008 crash. Oil spiking to $145 a barrel precipitated unprecedented cost cascades. (For anyone interested take note of the Riyal right before that spike, fishy as hell). There were riots and protests all around the world, including the UK.

        We now have as predicted a permanent check on global production / consumption in the oil price. As the world has dropped off by 25-35% from peak, so too has oil. As soon as we ramp consumption, production, credit driven consumption the oil price ceiling will kick back in driving us back over, and over. And this is set to become ever harsher with increasing costs of ever harder extraction and refinement.

        • Peak oil refers to new oil finds, relative to production and demand.

          I’ve viewed it as somewhat different, I’d like to be informed of what I am missing if it is the case.

          I have viewed peak oil as a physical limit due to the lack of new dicoveries of reserves.

          I have believed that the physical act of oil extraction is capped, due to some physical nature, somelike like the pressure within the contained oil reserve.

          Thus under other resources, increased demand would lead to a increased level of depletion of known reserves.

          This is impossible with known reserves, in that all reserves known, we will eventually have a quota of extracted oil, and all global sources, that are marginally increasing in demand, are pursuing a resource that is physically prevented from a marginal increase in supply.

  3. Cognitive Dissonance

    93 upto 110.6, a 19% increase over 19 years, not the sort of thing booms are made of, both growth all the same.

    Its also BOE (barrels of oil equivalent) that is doing the increasing but barrels of oil, the stuff our cars run on, and makes paints, oils, glues and plastics that make our cars and highways (among all the other wonderful things) that is doing the decreasing.

    You can’t make iPhones with BOE

    The report also lets you guess that our economies will need to be rebuilt to operate on rising levels of BOE while at the same time pay very high prices on decreasing crude availability so we can make all the stuff that runs on BOE, in that you won’t have the resources to enjoy life as we know it, the report is telling me that individuals are going to slowly get poorer. You may already be noticing something, but only the benefit of time allow a better view.

    • Maybe someone is already ahead of the curve here.

      It isn’t widely discussed, but Warren Buffet made his largest ever purchase in the mid naughties. The purchase was American railroads.

      If humans do not engage in a gentle transition incurring the least cost, then change will abrupt and incur great dislocation.

      History shows we’ll lock in ‘B’ thanks Eddie.

      The would be likely to see us revert to readily adaptable technology until we adapt to the new one.

      The ‘new one’, for cars anyway, does seem to be hydrogen. It’s greatest problem however is its lock density. I believe the under known technology, a tanker would travel 180km, and use more fuel than the amount of fuel it can transport, it might even be 80km, I can’t recall off the top of my head.

      Reading a Andrew Carnegie biography, I came across how the spread of the telegraph was basically done in unison with the spread of rail lines.

      To overcome the transport of hydrogen fuel problem, I can foresee someone risking that a recapitalisation of railways in the event of peak oil, may also evdeavour to contruction a widespread reticulation network of hydrogen pipelines.

      • Rail FREIGHT in the USA is a completely different story to rail freight in smaller economies, and is a completely different story to commuter rail systems everywhere. Rail freight in the USA shares the attribute of most “transport”, in that its cost in real terms has trended DOWN over decades in spite of rising oil prices. The cost of driving cars, in REAL terms, has flat-lined yet most of the cost is “discretionary”; people COULD buy more efficient cars, only many of them don’t HAVE to.

        Commuter rail systems have increased in REAL cost around four-fold in 50 years.

  4. Chart fail… This uses a few well-known techniques to obfuscate the data.

    1. The oil drops are totally out of proportion. There is a forecast of 19% growth rate, but the last drop looks nearly twice the size of the middle drop.
    2. The last drop is darker, and hence more visually prominent than the first drop.
    3. The small droplets are just confusing. They have no quantity assigned to them, just chart clutter.
    4. The time scale at the bottom isn’t constant, which adds to the idea that the next 9 years are going to be bigger than the previous 11.

    As Dam has implied, this is just a PR puff piece.

    There’s a good run-down of why charts like this are bad in Edward Tufte’s, “The Visual Display of Quantitative Information”, and also here:

  5. If you plot $US oil price and overlay it with US unemployment you will see oil spike correlate with unemployment spikes 2-5 years later.

    When energy costs too much the economy starts contracting. The amount of reserves is not as important as the cost of obtaining it.

  6. If you plot $US oil price and overlay it with US unemployment you will see oil spike correlate with unemployment spikes 2-5 years later.

    When energy costs too much the economy starts contracting. The amount of reserves is not as important as the cost of obtaining it.

  7. The whole oil exploration business and capability was massively damaged by the long period of excessively low oil prices in the 90s and early 2000s. Drills got decommissioned, geologists became accountants. Oil exploration is a long lead time activity and the industry is still rebuilding it’s exploration activities in response to higher prices.

    If prices rise then there will be market responses. AMrginal reserves become worth extracting, other technologies become economic (after all a big chunk of Germany’s oil in WW2 was from coal to oil plants so it’s old, but expensive, technology), substitute fuels become preferred.

    Just another doomsayer cult to scare people with.