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Are we really going to run out of oil to fill it up?

Gregory Launay, translation by Audrey Brousseau - Last update: September 1st, 2012

 

Let’s start with some notions…

Our goal here is not to draw another list of all the arguments in this debate, but to make things clear by focusing on key figures and notions. Let’s start with some definitions. First, what are we talking about when referring to oil?

  • conventional oil : that’s fine quality oil (not too heavy, not containing too much sulphur) which is exploited with current technology
  • non conventional oil: it includes products of far lesser quality, either degraded oil (oil sands), either oil that has not finished its formation (oil shales), or oil of atypical composition (condensate, extra-heavy oil)
  • synthetic oils : all forms of liquid fuels after transformation from another form of primary energy, either fossil resources (gas, coal) or non fossil (biofuels)

It’s also important to distinguish a resource from a reserve:

  • a resource includes all forms of oil as it exists on earth (even under its most degraded form)
  • a reserve is the fraction of a resource which can be technically and economically man-exploited from the moment when the figure is given (and that makes some difference!)

To qualify a reserve is a tough task which depends on the techno-economic context. This has to be statistically produced, that’s why we’ll refer to “the most likely” reserve.

 

Who are the most legitimate providers for figures in this debate?

There are three groups of them:

  • oil manufacturers (BP, Total and the others), as they are the ones digging it up after all!
  • organizations which are close to or directly dependent on the governments (International Energy Agency, French Institute of Petroleum, OPEC, US Department Of Energy…)
  • some “independent voices” : retired experts, some organizations (especially ASPO : Association for the Study of Peak Oil and gas, founded in 2000)

 

What do they say?

First, we have to notice that there are some facts on which those people do agree, especially on conventional oil reserves. Let’s take stock on those data:

  • conventional oil reserves are about 330 Gtoe (Gigaton oil equivalent),  or 2400 billion barrels (1 barrel = 159 liters, 1 toe = 7.33 barrels). Let’s keep in mind that this figure is to be considered as a highly statistical probability
  • the oil that has been consumed represents in all 150 Gtoe, or 1100 billion barrels
  • the remaining reserves represent the difference between the two, that is to say about 180 Gtoe or 1300 billion barrels
  • we have currently an annual consumption of 4 Gtoe or 30 billion barrels (85 billion barrels a day)

Two essential remarks: first, the annual consumption keeps on increasing (still +380 000 barrels / day in 2008). It is thus irrelevant to consider the constant model.

Oil production by region - Source: BP Statistical Review, 2009

Second, we have already consumed half the global reserves. Roughly speaking, the cup is half empty. We’ve known for a long time now that the production of non renewable natural resources reaches its maximum around the period when half the reserve has been exploited: this is the peak production or Hubbert Peak (named after the geologist to whom this statement is accredited).

This is a crucial fact that has reached consensus. We’re getting very close to this peak production of conventional oil. The debate is still open: will it happen this year? Next year? In 2015? Will it be abrupt or stretch over time? But that’s about it: everyone agrees to say that it will happen, and that this time will come soon!!!

If those people are right (and that’s likely to be the case), the production of conventional oil will soon stop increasing…before decreasing.


Facts that are being discussed

Those revolve around the options to compensate for this decrease. Two are mentioned by the most optimistic :

  • the exploitation of non conventional oil
  • the evolution of techniques that enhance recovery (EOR for Enhance Oil Recovery)

According to the most optimistic statements, it will be possible to compensate for the decrease of the production of conventional oil for the oil production to grow for a long time. On the contrary, the pessimistic ones forecast the exact opposite. In fact, according to them, most alternatives are unrealistic because they are economically and energetically dire. So as to have a better understanding of this debate, it would be interesting to study the efficiency problems of oil exploitations. Here are some additional remarks:

  • recent history has shown that the optimists end up joining the pessimists (especially on Hubbert Peak)
  • even if the optimists were right, the necessary energy for extraction and production, and the industrial investments (we lack refining capacity) would dramatically increase the production costs

 

What difference for our near future?

The most optimistic forecast a future that would be under bearable constraints. Ok, good quality and cheap energy is getting scarce, but come on, technological advance will enable us to maintain sufficient energetic supply.

On the whole, fossil resources are still available in huge quantities, they are just slightly more difficult to extract. In the distant future, synthetic oils (second or third generation agrofuels) could take over. Let’s remain vigilant, but still, there’s nothing to disturb the under-50 housewife!!

Oil production forecast - Source: IEA, World Energy Outlook 2008

Here is above the typical forecast according to this vision. The decrease of conventional oil production would be compensated for and growth would be maintained ever after. Is it a tale?

A more pessimistic vision would rather state that we are reaching the end of a cycle, as we believed that unlimited energy was available for free. This is the beginning of the end of the world! We must admit that we are truly reaching the limit, and I let you imagine what the market price of energy could be…

Oil production forecast - Source: Jean Laherrere, ASPO 2008

Here are above the ASPO forecasts. The most probable curve appears in light blue. It shows the global production of all oils as it increases until 2018 before it inexorably decreases…

 

Let’s come back to transport …

No acceptable vision of the future (as it is depicted in the news) is possible without including the economic growth of developing countries. And this goes with the development of their means of transportation, just as it has already happened for us.

But what mobility development is possible if oil energy supply is decreasing? Let’s keep in mind here that, contrary to other sectors, transport directly depends on oil…

The medias have taken up the problems of CO2 emissions, but they only tackle the problem of the resources in terms of market prices (oil is cheaper, oil is more expensive). But we must truly weigh the risks humanity is facing: no matter its price, the resource is really getting scarce!