Geologist: In Terms of Supply and Demand, the Oil Peak Is Past

Jeffrey Brown is an independent petroleum geologist and analyst, who also manages an exploration program in West Texas. He has a major interest in the subject of “Peak Oil” and has used mathematical models to project a very grim future for the world’s oil supply. We caught up with Jeffrey at his office outside Dallas.

Eli Neusner, reporter, HardAssetsInvestor.com (HAI): You’ve published some controversial research in the past. What is the gist of your analysis?


Jeffrey Brown, petroleum geologist (Brown): The basic thrust of my research is that the world has already arrived at Peak Oil – which is a condition in which the worldwide supply of oil cannot keep up with demand. We have used proven mathematical models to show that the top five net oil-exporting countries – which are Saudi Arabia, Russia, Norway, Iran and the United Arab Emirates, and which account for one-half of current world net oil exports – are showing an ongoing decline in net oil exports, continuing a trend that began in 2006. To give you an idea of where we’re headed, Mexico – another former top producer – will see its oil exports hit zero in 2010.

HAI: How can you be so sure?

Brown: Because of the models and because we’ve seen it all before. Our mathematical model shows that once oil production in an oil-exporting country starts declining, the resulting decline in net oil exports can be quite rapid, and the oil exporter tends to show an accelerating net export decline rate. It’s irreversible. The top five oil-exporting countries will approach zero net oil exports around 2030, going from peak exports to zero in about 25 years.

Many large producing regions have shown production patterns that are consistent with the models. The lower 48 peaked in 1970. Texas peaked in 1972. Alaskan oil production slowed the U.S. oil decline, but U.S. oil production never equaled its 1970 peak. Today, Prudhoe Bay, the largest American oil field, is now at about one-fifth of its peak production and declining rapidly. Did we stop finding oil in Texas or in the rest of the lower 48? No. However, it is impossible to replace old, very large oil fields, with a collection of the much smaller fields, such as those we’ve been finding in Texas since 1972.

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