assessing energy futures 3

8/14/2019 Assessing Energy Futures 3

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PEAKING OF WORLD OILPRODUCTION

The Problem & Its Mitigation

Robert L. Hirsch, Ph.D.Senior Energy Program Advisor, SAIC

6th National Conference on Science, Policy and the EnvironmentJanuary 27, 2006.


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THE PEAK OIL PROBLEM

MITIGATION OPTIONS

THREE SCENARIOS

TIMING & RISK

THIS PRESENTATION


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Why will conventional oil production peak?

Time - Decades

P r o

d u c

t i o n

Oil FieldsPeak

1945 2000 Year

P r o d

u c

t i o n

U.S Lower 48 States

The worldwill peak

(All regions)

Regions Peak(Many oil fields)


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World Additions to Oil Reserves Have BeenLagging Consumption for Decades.

0

-20

20

40

1940 2000 Year

AnnualAdditions

MinusConsumption

(Billions of Barrels)

We now consume 3 barrels for each new barrel added.


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What Might Happen at Peaking?

Oil demand growsin a healthy world

economy

Productionreaches a

maximum &then declines

- PEAKS -

PRICESESCALATE

SHORTAGESDEVELOP

Supplycannotmeetdemand


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When?No one knows for certain

Forecast Source

2006-2007 Bakhitari (Iran)

2007-2009 Simmons (U.S.)

After 2007 Skrebowski (U.K.)

2010 Campbell (Ireland)

Before 2009 Deffeyes (U.S.)

Before 2010 Goodstein (U.S.)

After 2010 World Energy Council

2012 Weng (China)

2016 Doug-Westwood (U.K.)

After 2020 CERA (U.S.)

2030 or later EIA (U.S) / Exxon Mobil

5 years

5-15 years

> 20 years


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11/18/08 7 EIA, Annual Energy Outlook 2002, 2003, 2004,2005 and 2006E

20.0

21.0

22.0

23.24.0

25.0

26.0

27.0

28.0

29.0

30.0

31.0

32.0

33.0

34.0

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

06E

T c

f / Y e a r

02

03

04

05

0

Forecasting Oil & Gas Supply Is Difficult!DOE EIA Forecasts of N. American Natural Gas Supply to U.S.

Looks good

Trouble!

4 years


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World oil demand is huge & growing.

World consumption outstripping discoveries.

Oil production in decline in 33 of the 48 of the worldslargest oil producing countries.

Many experts are deeply concerned.Mitigation requires time.

The risks are enormous.

Why worry now?


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Fundamentals

Peaking is maximum production,not running out.

Its a liquid fuels problem, not

energy.


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Mitigation Study

Scenario I - No action until peaking occurs

Scenario II - Mitigation started 10 years before peaking

Scenario III - Mitigation started 20 years before peaking

ASSUMED CRASH PROGRAM IMPLEMENTATION:

THE MOST OPTIMISTIC ,LIMITING CASE


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Options Not Included in Our Analysis

Option Reasoning

Nuclear

Wind ... Electric

Solar

Hydrogen Neither ready nor economic

Biomass . Not economic

Shale Oil . Not commercial

LIQUIDFUELSneeded


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0 5 10 15

10

0

20

30

Years After Crash Program Initiation

EOR

Coal Liquids

Heavy Oil

GTLEff. Vehicles

Sum of Contributions

Delay, then rapid growth.

Roughly 25 MM bpd 15 years after crash program start.

Impact in Millions of barrels of oil

per day(MM bpd)


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Autos Light Heavy AirplanesTrucks Trucks

Fleet size - Millions 130 80 7 Small

Median life - Years 17 16 28 22

Q: Why cant we do more conservation faster?

A: Fleets of vehicles are huge & median life is long.

U.S. Transportation - 2003


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0

20

40

60

80

100

-20 -10 0 +10 +20

YEARS BEFORE / AFTER OIL PEAK

PRODUCTION

(MM bpd)

120

Extrapolated Demand-Growing World Economy

A Pattern for World Oil Demand Date for peaking left open

Shortage (60 MM bpd@ year 20)

U.S. Lower 48production pattern


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020

40

60

80

100

-20 -10 0 +10 +20


PRODUCTION(MM bpd)

120

SCENARIO I: MITIGATION @ PEAKING

Mitigation

Shortage


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020

40

60

80

100

-20 -10 0 +10 +20


PRODUCTION(MM bpd)

120

SCENARIO II: MITIGATION 10 YEARS BEFORE

Mitigation

Shortage

Oil DeclineDelayed

Start


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020

40

60

80

100

-20 -10 0 +10 +20


PRODUCTION(MM bpd)

120

SCENARIO II: MITIGATION 20 YEARS BEFORE

Mitigation

Oil PeakingFurther

DelayedStart


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I. Wait for peaking

II. Start 10 years early

III. Start 20 years early

Summary Crash Program Implementation

BIG TROUBLE!

SERIOUS TROUBLE!

NO PROBLEM?


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Forecasts of World Conventional OilProduction Peaking

Forecast Source

2006-2007 Bakhitari (Iran)

2007-2009 Simmons (U.S.)

After 2007 Skrebowski (U.K.)

2010 Campbell (Ireland)

Before 2009 Deffeyes (U.S.)

Before 2010 Goodstein (U.S.)

After 2010 World Energy Council

2012 Weng (China)

2016 Doug.-Westwood

After 2020 CERA (U.S.)

2030 or later EIA (U.S) / Exxon Mobil

Now

Now + 10 years

Now + 20 years

ScenarioIII


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0

10

20

30

40

50

1930 1950 1970 1990 2010 2030 20500

10

20

30

40

50

2006

WORLD OIL

Past Production

ForecastProduction

DemandGrowth

Gb/y ear

A Chinese View on Peak Oil

Peak ~ 2012

China has been taking aggressive action to secure oil supply.

GAP


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Past / Future?

Oil interruptions in 1973 & 1979 caused recessions &inflation.

Both events were brief.

World oil peaking impacts could last for decades .

We have never faced a problem like world oil peaking.

The worlds first forced energy transition.


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Oil peaking timing is uncertain. It may be soon. Soon is less that 20 years hence.

Its a world liquid fuels problem.

Peaking = Worlds first forced energy transition.

The risks of over optimism are enormous!

Mitigation technologies ready; Implementation the challenge .

With timely mitigation, economic damage minimized.

Conclusions

assessing energy futures 3

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