CERA, the prominent Boston based Cambridge Energy Research Associates (www.cera.com) issued a puzzling 4 page press release on January 17, titled "No Evidence of Precipitous Fall on Horizon for World Oil Production: Global 4.5% Decline Rate Means No Near-Term Peak". This is a new annual depletion rate for existing oil fields CERA has developed that "provides the basis for more confidence about the future availability of oil".They predict "World Liquids Productivity Capacity" will climb to 112 mbd by 2017, just 10 years from now and an accompanying graph shows level production after that point. CERA adds that some 350 new projects will bring an additional 6.5 mbd of new oil to market by 2017 that is included in the 112 mbd Capacity prediction. Looks like a plateau-peak in 10 years.
Let's do the math: a 4.5% annual decline, starting with today's 86 mbd production, means 32 mbd less in 2017. Add back the 6.5 mbd of new oil and we're still short 25 mbd compared to today.
But what about growth in demand? Interestingly the press release does not mention growth. The International Energy Agency in Paris just predicted a 2.3% increase in oil demand this year. But let's use the historical growth rate of 1.5% for the next 10 years. That's an additional 15 mbd needed by 2017 for growth. This increases the projected global shortfall in 2017 to 40 mbd, equivalent to 4 Saudi Arabias of new oil coming on-stream in the next 10 years. How likely is that? This math predicts production in 2017 will be only 46 mbd, not 112 mbd, and proves how devastating a 4.5% depletion rate is in a very few years.
PETER WEGGEMANN, Retired chemist, petrochemicals. Naples, Florida