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AAAS Science: World Oil Crunch Looming?
Richard A. Kerr, AAAS Science
Summary: Even those who believe there's plenty of oil left in the ground to meet rising demand are warning that the final crisis could come uncomfortably soon.
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... The fall in oil prices will likely be shortlived, say those in the know. Although price spikes and drops may recur for years, says economist Fatih Birol, “we think the era of cheap oil is over.” He and colleagues at the Paris-based International Energy Agency (IEA) just released their World Energy Outlook 2008. IEA analysts see enough oil still in the ground to satisfy ever-rising demand for decades to come—assuming the price continues to rise. But they aren’t at all sure that the Middle Eastern government-owned oil companies sitting on most of the remaining oil will be pumping it fast enough a decade or two from now to meet the unbridled demands of the rest of world.

Already, countries outside oil-rich OPEC (the Organization of the Petroleum Exporting Countries) seem unable to increase production further, even with the enticement of high prices. IEA’s World Energy Outlook sees that plateau of non-OPEC oil production continuing, putting the burden on a reluctant OPEC to make up the shortfall, if it can.

... Some oil analysts working from their best estimate of how much oil remains in the ground—dubbed “peakists”—see world production reaching its limits in the next few years or a decade and then declining.

Signs of strain may already be emerging. Outside OPEC, oil production has not risen since 2004, even as prices soared. IEA sees no recovery in this non-OPEC production from conventional oil fields. Moreover, it projects that the plateau in conventional oil will turn into a decrease beginning in the middle of the next decade, accelerating through to 2030. Only the growth of production from expensive unconventional sources, such as mining tarry sands in Canada, will keep total non-OPEC production from falling during the next 20 years, according to IEA.

... IEA studied 800 fields around the world that had already passed their peak production to see how fast they are declining—a rather rapid 6.7% decline per year, it turns out. And that rate could increase to 8.6% by 2030, IEA says, as the industry turns more and more from waning giant onshore fields to smaller fields and offshore fields, both of which decline faster after peaking.

... In its first look ever beyond 2030, the U.S. EIA is finding even less support for a rosy oil scenario than IEA is. Its report is yet to be released, but EIA’s Glen Sweetnam of the Washington, D.C., offices outlined preliminary results at an EIA conference in April (www.eia.doe.gov/conf_pdfs/Monday/Sweetnam_eia.pdf).

... Things look fine right through the rest of the century if, starting now, the whole world severely curbs its appetite for oil, the EIA analysis suggests. In this low-demand scenario, the lingering demand for oil could be met even if the nondemand factors were unfavorable.

Still on the optimistic side, if demand were to continue rising as before and level off starting in 2030—say, in response to crash programs to increase efficiency and develop alternatives—demand could be met into the second half of the century even if a single factor were unfavorable, with one exception. If OPEC does not increase its production beyond its current 34 million barrels per day, world production will plateau within a few years, reminiscent of the potential crisis IEA sees in the middle of the next decade. Most ominously, EIA’s high-demand scenario — higher demand to 2030, then business-as usual increases in demand thereafter—“may be difficult to meet even with favorable supply assumptions,” said Sweetnam.

Unbridled consumption does not seem to be an option.
(21 November 2008)
Behind a paywall. Author Richard A. Kerr has written previously on peak oil for Science magazine.

Contributor Michael Lardelli writes:
Just out in the top ranking journal Science. Considering the growing size and considerable activity of the ASPO organisation and the depth of its scientific talent I think it is almost insulting that it is not mentioned in the Science article.

The 2008 IEA WEO - Oil Reserves and Resources
Phil Hart, The Oil Drum: ANZ
True to their word, the 2008 World Energy Outlook represents a significant development by the International Energy Agency (IEA) in the philosophy and methodology of their oil supply forecasts. The report attempts a bottom-up model of the world's oil production potential and even revises down estimates previously taken at face value from the United States Geological Survey (USGS). The tone of the report has also changed dramatically, with an urgent call for investment in additional oil projects to avoid production shortfalls by 2015.

Despite those significant changes, the report still relies on inflated estimates of reserves from OPEC countries, overplays the contribution of reserves growth due to technology and predicts the reversal of a decades long trend of declining oil discoveries. These are the real factors that will send oil production into decline, but at least now we have some numbers we can discuss and analyze instead of a decade of blind faith in oil market economics.
(20 November 2008)

Nine percent
Albert Bates, The Great Change
... A ski resort is an oddly appropriate place for a petrocollapse meeting, and in Michigan, in to response to an audience question, we gave a short rap on what the exponential function looks when it is inverted. You get off the chair lift and point yourself downhill.

We know from studies of the world’s major oil fields, whose production rates are known, and from a recent IEA report, that the downslope after peak oil is likely to be steeper than the 2% average annual rise in production over the past century. The reasons for this are simple: governments and industry did not believe in peak oil, preferring to listen to classical economists who chant the mantra that demand creates supply; they pushed the fields well beyond normal production limits, using secondary and tertiary recovery techniques to scour the formations; when the end came, production less resembled the smooth curves of West Texas history and more the plunge of a natural gas gusher. Decline rates are shaping up to be 9 percent, although some, like Mexico’s, will be even steeper.

So what does 9 percent decline feel like? Well, on a growth curve, a 7 percent rise means a doubling every 10 years, each decade using more than all that has been used in history. On the descent, 7 percent means halving every 10 years: half the heating oil, half the tax revenues, half the fertilizer, half the semi-trucks, half the road and bridge repairs, half the school budgets, and so on. Nine percent would be slightly faster, or halving roughly every 8 years.

Gross Domestic Product in the developed world has always been a 1:1 ratio with fossil fuel consumption. Our economy and our oil use are essentially identical. If we start at 100% in 2008, and decline at 9% per year, we can see that we are at 47% of our present economic activity in 2016, and a little over 10 percent in 2032.
(21 November 2008)