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Richard A. Kerr
|PREDICTED PEAK IN WORLD OIL PRODUCTION|
|F. Bernabe, ENI SpA (1998)||2000-2005|
|C. Campbell and J. Laherrére, Petroconsultants (1998)||2000-2010|
|J. MacKenzie, World Resources Institute (1996)||2007-2014|
|OECD's International Energy Agency (1998)||2010-2020|
|J. Edwards, University of Colorado, Boulder (1997)||2020|
|DoE's Energy Information Administration (1998)||>2020|
One of the most pessimistic recent analyses comes from former international oil geologists Colin Campbell and Jean Laherrére, who are associated with Petroconsultants in Geneva; Campbell was an adviser to the IEA on its latest estimate. "Barring a global recession, it seems most likely that world production of conventional [easily extracted] oil will peak during the first decade of the 21st century," they wrote in the March issue of Scientific American.
Campbell and Laherrére's early peak prediction is drawn in part from their low estimates of existing reserves. Of the trillion barrels of oil that countries have reported finding but not yet extracted--their proven reserves--Campbell and Laherrére accept only 850 billion barrels. Much of the rest they view as "political reserves"--overly generous estimates made for political reasons. For example, reserves jumped by 50% to 200% overnight in many OPEC countries in the late 1980s--perhaps because OPEC rules allow countries with more declared reserves to pump more oil and so make more money, says Campbell.
Not all Hubbert-type estimates are quite so pessimistic. "I'm an optimist," says former oil industry geologist John Edwards of the University of Colorado, Boulder. "I think there's a lot more oil to be found. I used optimistic numbers [near the high end of estimated reserves], but I'm still at 2020" for the world production peak. "Conventional oil is an exhaustible resource. That's just the bottom line."
Technology to the rescue?
But other geologists and many economists put more faith in technology. Oil will eventually run out, these self-described optimists agree, but not so soon. "We're 30, maybe even 40, years before the peak," says oil geologist William Fisher of the University of Texas, Austin. Fisher has lots of support from the latest international energy outlook prepared by the U.S. Department of Energy's Energy Information Administration (EIA). "We don't see the peak happening until after the limit of our outlook," in 2020, says the EIA's Linda Doman. "We think technology and developing Middle East production capacity will provide the oil."
In the optimists' view, it doesn't matter that there are few if any huge new fields left out there to find. What does matter, they say, is how much more oil the industry can find and extract in and around known fields. Even as the world consumes 26 billion barrels a year, in their opinion reserves are growing rapidly. They argue that much of OPEC's reserve growth is real, and that OPEC and others are boosting reserves not so much through the discovery of new fields as through the growth of existing fields--and technology is the key. Technology might double the yield from an established field, they say. "Technology has managed to offset the increasing cost of finding and retrieving new resources," says economist Douglas Bohi of Charles River Associates in Washington, D.C. "The prospect is out there for an amazing increase in the [oil] reserve base."
Three currently used technologies are helping drive this boost in reserves, Bohi and others say. Aided by supercomputers, explorationists are using the latest three-dimensional seismic surveying to identify likely oil-containing geologic structures, yielding a sharp picture of potential oil reservoirs. A second technology involves first drilling down and then sideways, punching horizontally through a reservoir so as to reduce the number of wells needed, and therefore the expense, by a factor of 10. Finally, technology that allows wells to be operated on the sea floor many hundreds of meters down is opening up new areas in the Gulf of Mexico, off West Africa, and in the North Sea.
All these new technologies can slow or delay what Hubbert saw as an inexorable production drop in older fields, the optimists say. Indeed, such technological achievements have already helped arrest the decline of U.S. oil production during the past 3 to 4 years, says Edwards.
But the pessimists are unmoved. "Much of the technology is aimed to increase production rates," says Campbell. "It doesn't do much for the reserves themselves." And what new technology does do for reserves, it has been doing since the oil industry began in the 19th century, he says. New technologies for better drilling equipment and seismic probing have been developed continually rather than in a sudden leap and so have been boosting the Hubbert curves all along. The shape of the curve therefore already incorporates steady technology development, he and other pessimists note.
As a result, they argue that today's technological fixes will make only slight changes to the curve. "All these things the economists talk about are just jiggling in a minor way with the curve," says Albert Bartlett, a physicist at the University of Colorado, Boulder, who calculates a 2004 world peak. "You can get some bumps on the [U.S.] curve by breaking your back, but the trend is down." For example, when oil hit $40 a barrel in the early 1980s, the U.S. production curve leveled out in response to a drilling frenzy--but it soon went right back down again. And besides, the pessimists note, when high prices drive increased production, the oil pumped is not cheap oil. Economist Cutler Cleveland of Boston University has found that the price-driven drilling frenzy of the late 1970s and early '80s produced the most expensive oil in the history of the industry. So, such production is a hallmark of the end of the golden age and the beginning of the transition stage of expensive oil.
The next few years should put each side's theory to the test. If technology can greatly boost reserves, then the U.S. production curve should at least stabilize, while if the pessimists are right, it will soon resume its steep downward slide. Production from the North Sea should tell how middle-aged oil provinces will fare; pessimists expect it will peak in the next few years. But it is the world production curve that will finally reveal whether the world is due for an imminent shortfall or decades more of unbounded oil.