energy peak oil

The declining optimism of the oil forecasters

I’ve been following the peak oil debate for a few years now, and one of the interesting things has been to see how forecasts have changed. The big energy agencies have consistently over-estimated global oil production, and as I’ve explained before, there are good reasons why they do that. You can only carry on with political rather than realistic predictions for so long however, and if you’ve ever wondered what it would look like if you mapped the forecasts over time, wonder no more.

Here’s the Energy Information Administration’s forecasts over the last decade or so, mapped by an IMF research project. In the  early years of the millennium, the agency expects global oil production to rise to almost 120 million barrels a day by 2020. Five years later the estimate has dropped to 110 mbd, and then it dips below 100 by the end of the decade. Who knows where it goes next – wherever the US government would like it to go, presumably.

Of course, you could create a similar graph with the pessimistic forecasts of oil depletion researchers. The IMF paper compares three of Colin Campbell’s forecasts and he doesn’t fare much better than the EIA – see below.

Forecasting future oil production is obviously a tricky business, but it’s an important task. Oil forecasts are a big factor in energy and transport policy. If there’s lots of oil, then we can proceed with cars and road-building – see the British government’s announcement about the Highways Agency today. (Climate change is clearly invisible in Britain’s transport planning.) If oil is looking harder to come by, perhaps we might want to redirect our plans into public transport, rail and walkable neighbourhoods instead, which is what we should have been doing anyway for a whole pile of reasons.

We’re not being well served when it comes to working out what’s really going on with global oil production. Both sides are failing to communicate the realities of oil production. The big difference between the EIA’s failures and the peak oil writers is that the EIA are officially sanctioned, the myth of choice.

Perhaps as the years go by, the agency estimates will fall and the depletion graphs will rise, and we shall meet somewhere near the truth in the middle. Considering the mystery around stated reserves, I suspect we will only ever know in hindsight.


  1. Might be worth noting that the IEA and CC are not forecasting precisely the same thing. IEA’s numbers are for “oil production” (presumably, total liquids), while CC is talking about “conventional oil production” (i.e. excluding non-conventionals like tar sands and shale oil (NB oil shale not so much)). That is why even their historical numbers differ, such that IEA numbers rise quite a bit between 2000 and 2010 while CCs hit a peak around 2005.

    It is axiomatic amongst many peak oil discussions that non-conventional oil ought to be excluded since it generally has significantly lower ERoEI (and so, the thinking goes, cannot be sustained without significant inputs of higher ERoEI conventional), but I think that if it is being produced profitably, then it remains part of the picture, even if current tar sands production relies on using ultra-cheap natural gas to power the processes required to turn the tar sands into something closer to conventional oil. If we exclude non-conventionals, then oil production indeed peaked a few years ago, or at least reached something of a plateau.

    Yet this is at the same time as industry studies confidently crow about the end of peak oil (or at least its deferral into the indefinite future) given the scale of the non-conventional resources.

    Since I lack the technical expertise to make any kind of call on the plausibility of the various claims, I return to three pretty non-contentious observations. First, oil companies are clearly moving into less desirable options: more deepwater drilling (in ever deeper water), opening up the Arctic (oh the irony), more reliance on oil from countries with unstable regimes. This doesn’t speak of an industry swimming in options. If there were more easy oil they’d be going for it. Second, prices are up and even oil companies admit that they have to stay up (above US$70/barrel, perhaps even above 90-100$) to make many of these extraction techniques profitable. This means that either prices will not drop to anything like the levels we were used to in previous decades or they will only do so due to massive economic contraction (which is what peak oil theorists predict anyway). Third – and most importantly – every new fossil hydrocarbon reserve increases the total pool of carbon atoms that we are planning on extracting from safely underground, burning and dumping into the active carbon cycle where it will poison the oceans and disrupt the climate for centuries or millennia to come. We already cannot burn more than about 20% of present reserves if we want to have at least an 80% chance of staying below an already-dangerous 2ºC rise above pre-industrial global temperatures. So every time new resources are identified, or prices+technology turn resources into reserves, this is very bad longterm news. Particularly when you throw in massive coal reserves, we clearly have enough carbon rope with which to hang ourselves and even the worse peak oil collapse* is preferable over the long term to a climate catastrophe that fundamentally alters the productivity and biodiversity of the planet for thousands or even millions of years.

    *Barring widespread nuclear exchange – a wildcard, admittedly.

    But of course, the worst peak oil collapse is *not inevitable* even if the darkest predictions of shortages turn out to be true, since the future is not set in stone and humans always have the freedom to repent and do things another way. There is no inevitability to Mad Max in a world of severely constrained energy supplies. While such a situation would test human cooperative capacities (and we may very well fail), I’d rather we struggle to get by with less power than condemning as many generations as we can imagine to a severely impoverished and more hostile planet.

  2. Yes, there’s definitely a difference in conventional oil and oil in total, and I actually added those big titles onto the graphs before I posted them, as the IMF report had it in tiny writing. Unconventional oil is only economically feasible because the price is so high, and the price is high because conventional oil has peaked – which is why all the talk of the demise of peak oil is a little premature.

    I completely agree with your three observations. There’s enough in those to make some intelligent choices about how we live, without fretting about how much oil there is, when it peaks and who’s got what.

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