World Oil Supply: Peak or Not Peak?

The opacity of global oil supply data and just how much oil can be counted as Proven (90-95% probability of recovery), Probable (50%) or Possible Reserves (5-10%) has heightened uncertainty and added impetus to the arguments of Peak Oil theorists and proponents.
Taken together with the sharp and sustained oil price rise, rapid industrial growth in places like China, India and other large developing countries, the rapid rise to political prominence of climate change mitigation and greenhouse gas emissions reduction efforts and associated incentives to promote alternative, renewable energy sources this has raised the uncertainty of demand for oil – and hence investment conditions – and put oil, and fossil fuel producers more generally, on the defensive. Looking at it cynically, you might say that they can cry all the way to the bank, at least for some time to come.

Villain or Scapegoat?
It would be unfair and inaccurate to paint such a picture, however. OPEC is a politically diverse group of 13 member countries whose charter precludes it from using oil as a political weapon. And though individual member’s approaches and goals for production targets vary widely, collectively it has been mindful of the organization’s leading role in the world oil and energy resource supply spectrum. Lately, OPEC is feeling somewhat victimized – certainly at least in the public eye – and underappreciated for its substantial and largely successful efforts to balance supply and demand and facilitate global economic growth and development over recent decades.
Hence, it has come out and announced its intention to make oil supply data, as well as its production and downstream refining and distribution investments, more transparent and public.
One main focus of this effort is Saudi Arabia’s sponsorship of the International Energy Forum, which endeavors to promote dialogue between oil producers and consumers through regular international meetings, and working to implement regular, standardized data gathering and reporting among OPEC’s 13 member states through the Joint Oil Data Initiative (JODI).
Has the Peak Been Reached?
OPEC in its World Oil Outlook 2007 uses a petroleum resource base estimate of Ultimately Recoverable Reserves (URR) from the U.S. Geological Survey to forecast global oil supply out to 2030.
2005 2010 2015 2020 2025 2030 (Mb/d)
Non-OPEC 49.0 54.1 56.3 57.8 58.5 58.8
of which: non-conventional 2.2 4.1 5.8 7.4 8.9 10.2
OPEC NGLs/non-conventional 4.1 5.7 6.8 7.8 8.8 9.8
OPEC crude 31.1 30.2 33.8 38.2 43.5 49.3
World 83.3 89.7 96.5 103.5 110.4 117.6
Source: OPEC World Oil Outlook 2007
To further support its contention that potential the global supply of conventional and non-conventional sources of oil are sufficient to meet anticipated growing world energy demand through 2030 and beyond (see previous post), the authors note that URR estimates have nearly “doubled since the early 1980s, from just 1,700 billion barrels to over 3,300 billion barrels, and it is probable that this upward revision process will continue.” Moreover, they point out, “cumulative production during this period was less than one-third of the increase. In addition, these figures do not take into account the large resources of non-conventional oil.”
A growing contingent of skeptics begs to disagree. In an Oct. 29, 2007 interview, Sadad Al Husseini, the former head of production and exploration at Saudi Aramco, stated that global oil production had likely reached its peak in 2006. He went on to add that forecasts made by the International Energy Agency (IEA) and U.S. Energy Information Administration that OPEC production can increase to more than 45 million barrels per day (Mb/d) are “quite unrealistic.”
The Association for the Study of Peak Oil and Gas (ASPO) in its January 2008 newsletter forecast that a peak in world oil production – including oil from non-conventional sources, such as tar sands, oil shale and synthetic, coal-to-liquid fuel – will occur in 2010.
The Times They Have A’ Changed
Optimistic about industry and governments’ ability to bring alternative energy sources on-line in the longer run – out to the dawn of the next millennium- Shell Oil’s chief executive Jeroen van der Veer nonetheless calls for a saner, more reasoned and cooperative, “Blueprints” scenario alternative to a “Scramble” for energy resources scenario in an employee memo that includes a pre-publication version of an editorial bound for the international media.
In the near- to medium-term van der Veer paints a stark picture of the current state of energy development, and related national and international policies and affairs. “Regardless of which route we choose, the world’s current predicament limits our maneuvering room. We are experiencing a step-change in the growth rate of energy demand due to population growth and economic development, and Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand…
“As a result, society has no choice but to add other sources of energy – renewables , yes, but also more nuclear power and unconventional fossil fuels such as oil sands. Using more energy inevitably means emitting more CO2 at a time when climate change has become a critical global issue.”

An independent journalist, researcher and writer, my work roams across the nexus where ecology, technology, political economy and sociology intersect and overlap. The lifelong quest for knowledge of the world and self -- not to mention gainful employment -- has led me near and far afield, from Europe, across the Asia-Pacific, Middle East and Africa and back home to the Americas. LinkedIn: andrew burger Google+: Andrew B Email:

5 responses

  1. I know there *must* be some perfectly simple logical reason why we can’t just stop having kids for 15 or 20 years to cure this problem.

    However i haven’t found anyone who will tell me what that reason is.

    Why is that?

  2. WOW!…. L.Wells, you really need someone to explain that to you? Let me just a paint a basic picture for you…..the United States and Europe do not have the majority of the population….China and India actually do. They really don’t have great health care or nearly the per capita wealth that the US does. Therefore, birth control is not as simple as it seems.
    Plus…….are you suggesting that we take away everyone’s personal freedoms? It has been shown that an increase in education usually leads to a decrease in birth rates. So instead of banning births (which, by the way is nearly impossible without government controlled vasectomies(sp?)) why not educate people about the problems caused by over population?
    Give people a break, you and I may not want our kids living on this planet right now, but you need to be less selfish.
    And by the way……logic doesn’t really seem to be your forte, if you can’t see how unpractical your request is.

  3. Actually Wells – the solution is very simple. The Catholic church must stop their evil opposition to birth control. So must other religious zealots. Then we need to empower women so that they feel they have a choice as to whether or not to have kids. Then we need some basic economic growth. All these thing will bring us to a stable population within a generation without any draconian laws.

  4. Sure nation’s governments have to coordinate policies in line with respective economic and resource supplies. But if countries like India and China are going to design these policies to be more amenable for the rest of the world, the rest of the world has to create the incentives and facilitate a tremendous technological transfer. Or else they’ll continue on the same old untenable track of little to no population control (like in India) to entice foreign investors, and financially support older generations. If we don’t allow for tech transfer of our developing alternative energy sources, they’ll continue to burn coal. Especially in China they have little political voice to hold government and big business accountable for the havoc they’ve caused on the environment.
    So let’s create an int’l regime responsible for facilitating such energy transfer. IMF and World Bank can delve out sustainable loans to foreign companies or governments to purchase patents and rights to these technologies. It’s in the best interest of all.

  5. I really enjoy reading your blog, it always has great insight. But I am very frustrated with the fact that so few people are talking about presidential candidates and their thoughts on global warming. Now that it is down to just a few candidates I would think that this would be a bigger issue.
    Live Earth just picked up this topic and put out an article ( ) live earth is also asking why the presidential candidates are not being solicited for their stance on the issue of the climate change. I just saw a poll on that says people care a lot about what their next leader thinks of global warming. Does anyone know of another poll or other results about this subject?
    Here is the page where I saw the EarthLab poll: This is a pretty legit website; they are endorsed by Al Gore and the alliance for climate protection and they have a carbon footprint calculator. Does anyone have a strong opinion about this like I do? No matter what your political affiliation is or who you vote for this is an important issue for our environment, our economy and for homeland security.

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