The world’s conventional oil production is likely to peak before 2030, with a significant risk that the peak could arrive even earlier — before 2020 — according to a new report from the UK Energy Research Centre (UKERC).
Despite the serious implications of that, however, the report notes that, “Most governments exhibit little concern about oil depletion.”
The report concludes we’re entering an era of slow and expensive oil — a resource that currently provides one-third of the globe’s energy. Even major new discoveries, such as those announced recently in the Gulf of Mexico, will delay the peak by a matter of days or weeks at best, according to the study. (The study doesn’t include unconventional oil sources such as Canada’s “tar sands.”)
In fact, simply keeping global oil production at today’s levels would require us to find a new Saudi Arabia every three years.
“In our view, forecasts which delay a peak in conventional oil production until after 2030 are at best optimistic and at worst implausible,” said Steve Sorrell, the report’s chief author and senior researcher at the UKERC. “And given the world’s overwhelming dependence upon oil and the time required to develop alternatives, 2030 isn’t far away. The concern is that rising oil prices will encourage the rapid development of carbon-intensive alternatives which will make it difficult or impossible to prevent dangerous climate change.”
While the report defends more optimistic estimates of the size of oil resources, it also notes that much of this is in smaller, less accessible fields that might only be produced relatively slowly and at high cost. It also highlights the accelerating decline in production from existing fields: more than two-thirds of current crude oil production capacity might need to be replaced by 2030 to prevent production from falling.
“It makes no sense to provide precise forecasts of when a peak in oil production will occur,” Sorrell said. “The data is unreliable, there are multiple factors to consider and a ‘bumpy plateau’ seems more likely than a sharp peak. But we can say that the window is narrowing rapidly. The effects of global oil depletion will depend greatly on the response from governments and on the scale of investment in new energy technologies.”
The UKERC report is the first study to take an independent, thorough and systematic review of the evidence and arguments in the peak oil debate. It’s based on a review of 500 studies, as well as an analysis of industry databases and comparison of global supply forecasts.
Among key excerpts from the report:
- “Although there are around 70,000 oil fields in the world, approximately 25 fields account for one quarter of the global production of crude oil, 100 fields account for half of production and up to 500 fields account for two-thirds of cumulative discoveries. Most of these ‘giant’ fields are relatively old, many are well past their peak of production, most of the rest will begin to decline within the next decade or so and few new giant fields are expected to be found.”
- “For a wide range of assumptions about the global URR (ultimately recoverable resources) of conventional oil and the shape of the future production cycle, the date of peak production can be estimated to lie between 2009 and 2031. Although this range appears wide in the light of forecasts of an imminent peak, it may be a relatively narrow window in terms of the lead time to develop substitute fuels.”
- “(I)t seems likely that mitigation will prove challenging owing to both the scale of investment required and the associated lead times. For example, a report for the US Department of Energy argues that large-scale programmes of substitution and demand reduction need to be initiated at least 20 years before the peak if serious shortfalls in liquid fuels supply are to be avoided … Hence, even 2030 may not be a distant date in terms of developing an appropriate policy response.”
- “(A)lthough many measures associated with climate change policy will help to mitigate the effects of oil depletion, there will be strong incentives to exploit high carbon non-conventional fuels. Converting one-third of the world’s proved coal reserves into liquid fuels would result in emissions of more than 800 billion tonnes of carbon dioxide (CO2), with less than half of these emissions being potentially avoidable through carbon capture and storage. This compares to recommendations that total future emissions should be less than 1,800 billion tonnes if the most likely global warming is to be kept to 2 degrees C … Hence, early investment in low-carbon alternatives to conventional oil is of considerable importance.”
- (I)nvestment in large-scale mitigation efforts will be inhibited by oil price uncertainty and volatility and seems unlikely to occur without significant policy support.”