Peak Oil is You
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Page added on December 30, 2011
Oil will decline shortly after 2015, says former oil expert of International Energy Agency
Olivier Rech developed petroleum scenarios for the International Energy Agency over a three year period, up until 2009. Since then, he has been advising large investment funds on behalf of La Française AM, a Parisian assets management firm.
His forecasts for future petroleum production are now much more pessimistic than those published by the IEA. He expects stronger tensions as of 2013, and an inevitable overall decline of oil production “somewhere between 2015 and 2010“, in the following exclusive interview.
Rech’s outlook serves as another significant contribution to the expanding list of leading sources portraying the threat of an imminent decline in global extraction of crude oil.
What do you foresee? Let’s begin with the non-OPEC producers (which represent 58% of production and 23% of global reserves).
Outside OPEC, things are clear: of 40 million barrels per day (mb/d) of conventional petroleum extracted from existing fields, we face an annual decline on the order of 1 to 2 mb/d.
In your view, are we therefore close to the 5% decline per year from existing production mentionned by Royal Dutch Shell?
Yes, that’s about it.
And for OPEC production (42% of production and 77% of global reserves) ?
It’s more difficult to say; the data are still opaque. We are stuck in a haze. Nevertheless, I note that Barclays and Goldman Sachs banks estimate that the spare production capacity of OPEC, more particularly that of Saudi Arabia, is significantly lower that what is officially claimed.
Many new production projects are presently under development all around the world. What should we expect of them?
There are new projects off the coasts of Brazil, Ghana and Guyana. The Gulf of Mexico is far from being depleted. The Arctic is far less certain, but there is real potential for natural gas there. Nevertheless, we must still expect a decade before seeing eventual and significant production of petroleum.
In that case, what is your view on the timing of the global peak and decline of total world oil production?
It is always delicate to project a precise date. The recovery rate of existing fields is increasing. The US on-shore production is declining very slowly (and one must add that they are drilling in a frenzy over there). It is an error to underestimate the know-how of drilling engineers.
Taking account of all these factors capable of slowing a decline, what conclusion do you draw?
We will certainly remain below 95 mb/d for the combined totals of conventional and non-conventional oil.
Therefore, you are clearly more alarmist than the IEA and Total, the most pessimistic of petroleum companies. Total evokes the possibility of maintaining production on a plateau of about 95 mb/d until 2030.
It’s true. The production of oil has already been on a plateau since 2005 at around 82 mb/d. [NB: with biofuels and coal-to-liquid, we approximate 88 mb/d for all liquid fuels.] It appears to me impossible to go much higher. Since demand is still on an increasing trajectory (unless, possibly, the economic crisis engulfs the emerging economies), I expect to see the first tensions arising between 2013 and 2015.
And after that?
Afterwards, in my view, we will have to face a decline of the production of all forms of liquid fuels somewhere between 2015 to 2020. This decline will not necessarily be rapid, however, but it will be a decline, that much seems clear.
You state “not necessarily rapid”. Why?
This will all depend on the speed at which streams of non-conventional oil will be able to be developed. Conversion of coal and natural gas to liquid fuels will remain infinitesimal. For first-generation biofuels, I believe we are already approaching the maximal limit. As for second-generation biofuels, we are still at the stage of industrial pilot projects. It should take another quarter century before we achieve a significant production on a world scale, let’s say around 2.4 mb/d.
In your view, will all of this be insufficient to compensate for the decline of existing conventional oil fields?
Insufficient, yes.
9 Comments on "Oil will decline shortly after 2015, says former oil expert of International Energy Agency"
Gale Whitaker on Fri, 30th Dec 2011 4:56 pm
Obviously their is no national dialogue about peak oil in the US. The LA Times publishes many articles about the price of gasoline but nary a mention of depletion. It seems like the main stream media is determined to keep the public in the dark. Politicians on both sides of the aisle avoid the subject. I’m sure they are afraid of “kill the messenger” syndrome. I would foster a guess that the GOP clowns in Iowa have nerve heard the phrase “peak oil”.
WhenTheEagleFlies on Fri, 30th Dec 2011 5:05 pm
Ask any old timer. The U.S. has no history of preparation.
Stephen on Fri, 30th Dec 2011 10:17 pm
I think we need to go on war footing to reduce use. Things we could do immedately:
1) Enact a ban on coast to coast trucking of freight. Require all freight transport over 600 miles to be boat or rail for at least 70% of the way except when there is no rail line that goes that direction. Trains and boats are far more fuel efficent.
2) Slap a tarriff on imports from China and other third world labor countries that is far more than the US cost to assemble the items here. Create tax breaks for assembling goods close to where they are to be sold.
3) create a national movement for local food production, to put farms and gardens back in suburbs, and tax breaks for grocery stores to accept locally produced food and backyard produced food.
4) Flex work hours and reduce the number of days one must be at the office 9-5. Pay by productivity. This would reduce commute hour gas consumption significantly. Tax gasoline in the USA up to European Prices.
5) Create tax breaks for living close to work and tax penalties for living far away from work.
6) Over time, facilities the transition to more rail travel and less commuting by car.
7) Begin work on restoring our railroad system.
8) Tax other minerals that are past peak production heavily.
9) Work on insulating houses so they don’t need as much heating and cooling.
Plantagenet on Fri, 30th Dec 2011 11:20 pm
Obama the clown has wasted four precious years when the US should have been preparing for peak oil.
Lets just hope Obama the clown isn’t re-elected and wastes another four years.
cusano on Fri, 30th Dec 2011 11:40 pm
“Obama the clown”..lets look a little closer.
George Bush ‘the clown’ didn’t do anything for 8 years.
Bill Clinton’ the clown’ didn’t do anything for 8 years.
George Bush Sr. ‘ the clown’ didn’t do anything for 4 years.
Ronald Reagan ‘the clown’ didn’t do anything for 8 years.
The only president to put the issue on the table was Jimmy Carter, and he was called a clown and voted out of office.
MrEnergyCzar on Sat, 31st Dec 2011 12:06 am
Regardless, we won’t grow our economy while adapting and using less oil. Growth based economies aren’t designed to use lessor forms of energy, certainly not less of it..
MrEnergyCzar
Wheeldog on Sat, 31st Dec 2011 1:22 am
Reducing consumption and increasing efficiency will not reverse the rapidly approaching decline in oil availability. It is much too far advanced, and we are far too addicted to oil to easily adjust to a new way of doing business. The best we can hope for is that enough people will be prepared for a post oil (carbon) society to keep some semblance of civilization functioning. How many readers are experienced at growing organic vegetables, butchering livestock, preserving food, basic mechanics, etc.? They will be tomorrow’s power brokers.
BillT on Sat, 31st Dec 2011 2:25 am
I see a lot of politics and partisanship in the comments above. Blame every American for the wasteful lifestyle that they have adopted, not just the current President. Even the US Military has published that oil peaked in 2006 (Bush Years)and most other real sources agree that it is in the past, not the future.
We are bumping along on a plateau that will last for a while as we adjust our lifestyle downward. Meanwhile, the largest single oil user in the world, out Military will waste much of what is left in a last gasp to maintain the ‘Empire’. And the threat of oil wars will grow. Iran sits on one of the largest pools that are left on the planet. So is Russia. Do you see where we are going? Will it all end in a nuclear exchange after all? We shall see.
Plantagenet on Sat, 31st Dec 2011 6:44 am
Why not face facts? Obama the clown has done nothing to prepare the country for peak oil.
Global oil production will start to decline in just a few years—-there is no time to waste. It is long past time for Obama to craft an energy policy for the United States that will prepare our country for peak oil. Unfortunately Obama the clown seems far more interested in running for re-election than doing the hard work needed to educate the American public about the peak oil issue.