Peak Oil 5 : The Big When - 1
My answer is 2008 unless economic recession delays or major geopolitical events intervene one way or another (but would probably foreshorten).
Note that 'conventional oil' (excluding: deepwater, polar and unconventional sources like tar sands) has peaked already, in 2004. I guessed you missed that, LOL.
This is a very contentious question and so is my answer. Some make arguable cases for 2005, some 2006 to 2009, some for 2010 to 2015, any such may be true. There are some who argue for dates beyond 2015 but their basis is so demonstrably erroneous that they can be easily dismissed by almost anyone who researches and analyses the known data.
If you want to grapple with the detail of 'when' I will give you profuse links in a second big when post, for now I will present my argument.
Oil prices have risen by over 30% in each of the last 3 years, 2003 to 2005. This has stimulated virtually all mothballed and relatively rapidly exploitable production to come onstream. New production must come from a combination of three main areas:
- new projects
- infill drilling for FIP (fields in production)
- EOR (enhanced oil recovery) like increasing pressure by injecting water
The second and third of these are already practiced just about everywhere. There is a worldwide constraint on new rigs (and on specialist steel to manufacture them, and the human skills). Drilling (new and infill) is running at maximum capacity and that capacity will not increase much, soon. EOR is a mixed blessing. Most EOR techniques increase production but result in higher decline rates once the field's production begins to decline, more on this later.
On the bright side there is a decent amount of new production that should come onstream in 2006 and 2007, it should exceed projected increased demand by perhaps 1 to 2 mbpd (million barrels per day). That is fortunate since supply and demand are currently very close to equal at about 85 mbpd. Less fortunately, things are looking bleak beyond that, there is likely to be a deficit of supply by the end of 2008 should business continue as normal. Note that major new production is usually known a good 5 years ahead - it takes considerable effort and infrastructure development to get most new fields capable of producing and delivering to market.
An aside: of course it is rather difficult for demand to exceed supply - one can only consume what one can get. Oil prices have doubled in 3 years, it is reasonable to think that would decrease demand somewhat. If it has it is not noticeable in the statistics. There was a slight decrease in US VMT (vehicle miles travelled) in the wake of the post hurricane US gasoline price spike (which was approx 50% increase) in September 2005 but latest VMT data is higher than a year earlier.
EOR and decline rates. When EOR is used it effectively brings forward production = more oil now, less later. If badly done it can actually reduce ultimate production, if well done it can increase ultimate production a bit. Most major FIP are using EOR now, it has been widely used in expensive production areas like North Sea (UK, Norway) since early on. When we look at the data we see that fields produced normally typically have decline rates of 2% to 5%, but those using EOR have a longer plateau of high production and a faster decline rate thereafter of 5% to 15%. Many projections about peak oil date use these atypically low decline rates. Of the 4 biggest conventional oilfields ever found on this planet:
Ghawar, Saudi Arabia
Burgan, Kuwait
Cantarell, Mexico
Daqing, China
Three are admitted to be in terminal decline (Burgan and Cantarell in 2005); the fourth and largest, Ghawar, we are unsure of since the Saudis don't disclose data, but there is evidence suggesting it too is, or will soon be. Since those 4 fields currently produce about 10% of this planet's oil best you hope their decline rate is in the 2 to 5% category, though we already know Cantarell's will be steeper.
This could be a problem. Higher than expected decline rates are the biggest downside risk to oil production forecasts and the odds favour higher decline rates than anticipated (the odds of lower than anticipated decline rates are minimal). In particular the black box that is Ghawar can only be inferred for now; it has been realistically been said that when Ghawar (which currently produces 5% of this planet's current oil production) dies, so does our society as we know it. I will leave you with just one link for now, draw your own conclusions:
http://home.entouch.net/dmd/ghawar.htm
Note that 'conventional oil' (excluding: deepwater, polar and unconventional sources like tar sands) has peaked already, in 2004. I guessed you missed that, LOL.
This is a very contentious question and so is my answer. Some make arguable cases for 2005, some 2006 to 2009, some for 2010 to 2015, any such may be true. There are some who argue for dates beyond 2015 but their basis is so demonstrably erroneous that they can be easily dismissed by almost anyone who researches and analyses the known data.
If you want to grapple with the detail of 'when' I will give you profuse links in a second big when post, for now I will present my argument.
Oil prices have risen by over 30% in each of the last 3 years, 2003 to 2005. This has stimulated virtually all mothballed and relatively rapidly exploitable production to come onstream. New production must come from a combination of three main areas:
- new projects
- infill drilling for FIP (fields in production)
- EOR (enhanced oil recovery) like increasing pressure by injecting water
The second and third of these are already practiced just about everywhere. There is a worldwide constraint on new rigs (and on specialist steel to manufacture them, and the human skills). Drilling (new and infill) is running at maximum capacity and that capacity will not increase much, soon. EOR is a mixed blessing. Most EOR techniques increase production but result in higher decline rates once the field's production begins to decline, more on this later.
On the bright side there is a decent amount of new production that should come onstream in 2006 and 2007, it should exceed projected increased demand by perhaps 1 to 2 mbpd (million barrels per day). That is fortunate since supply and demand are currently very close to equal at about 85 mbpd. Less fortunately, things are looking bleak beyond that, there is likely to be a deficit of supply by the end of 2008 should business continue as normal. Note that major new production is usually known a good 5 years ahead - it takes considerable effort and infrastructure development to get most new fields capable of producing and delivering to market.
An aside: of course it is rather difficult for demand to exceed supply - one can only consume what one can get. Oil prices have doubled in 3 years, it is reasonable to think that would decrease demand somewhat. If it has it is not noticeable in the statistics. There was a slight decrease in US VMT (vehicle miles travelled) in the wake of the post hurricane US gasoline price spike (which was approx 50% increase) in September 2005 but latest VMT data is higher than a year earlier.
EOR and decline rates. When EOR is used it effectively brings forward production = more oil now, less later. If badly done it can actually reduce ultimate production, if well done it can increase ultimate production a bit. Most major FIP are using EOR now, it has been widely used in expensive production areas like North Sea (UK, Norway) since early on. When we look at the data we see that fields produced normally typically have decline rates of 2% to 5%, but those using EOR have a longer plateau of high production and a faster decline rate thereafter of 5% to 15%. Many projections about peak oil date use these atypically low decline rates. Of the 4 biggest conventional oilfields ever found on this planet:
Ghawar, Saudi Arabia
Burgan, Kuwait
Cantarell, Mexico
Daqing, China
Three are admitted to be in terminal decline (Burgan and Cantarell in 2005); the fourth and largest, Ghawar, we are unsure of since the Saudis don't disclose data, but there is evidence suggesting it too is, or will soon be. Since those 4 fields currently produce about 10% of this planet's oil best you hope their decline rate is in the 2 to 5% category, though we already know Cantarell's will be steeper.
This could be a problem. Higher than expected decline rates are the biggest downside risk to oil production forecasts and the odds favour higher decline rates than anticipated (the odds of lower than anticipated decline rates are minimal). In particular the black box that is Ghawar can only be inferred for now; it has been realistically been said that when Ghawar (which currently produces 5% of this planet's current oil production) dies, so does our society as we know it. I will leave you with just one link for now, draw your own conclusions:
http://home.entouch.net/dmd/ghawar.htm
posted by Agric | 00:33
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