The latest version of this has just been published in an interview by the IEA Chief Economist, Dr. Fatih Berol with the Independent paper in the UK. (h/t Leanan and Gail). Dr. Birol notes that it would take the discovery of 4 sets of reserves the size of the Saudi Arabian fields to maintain current production until 2030, an it would need 6 to meet the demand, if it continues to grow at the anticipated rate. Recognizing the unrealistic nature of that condition, he then starts to walk back the date at which the world is going to realize that it is in trouble.
He first notes that “peak oil” the point at which global oil production reaches its highest point, is now likely to occur no later than 2020. Until now the 2030 date has been, for a number of agencies the earliest at which this was projected to arrive. Now that date is just over 10 years away, leaving half the period that the Hirsch Report felt was needed to find a realistic alternate solution to the liquid fuels shortage. But he does not stop with that date, but goes on to note that there is a more likely crisis coming first. That is the point where global supply of oil can no longer keep up with demand. This is a topic I have harped on before, and his new numbers are depressingly close to estimates I have posted. The date where it becomes a problem – the end of next year!
There are two significant causes to the more immediate arrival of this new (and unfortunately thereafter continuing) crisis. Part of the problem has arisen since the oil-producing nations of the world, particularly those with a fair bit left, have chosen not to make the large investments needed to increase access to both current reserves, and to find and develop areas which are only, as yet, possible reserves. This part of the message is not new, Dr. Birol has been raising concerns about the gap between needs and what is going to be available for over a year. What is more of a concern is the rate at which the IEA is now reporting that existing oil fields are declining.
Historically the number that has been used is around 4.5%, which I started to explain last January . Unfortunately I don’t think I have recently gone into detail on why I think this is too small (it is because of the much higher decline rates where the wells are turned horizontal and start to water out). But I briefly referred to the concern last September) with the aid of a couple of graphs I took from Khebab’s Megaprojects update of August 2008. The first plot shows the world condition with the assumed 4.5% decrease in current field production.World Oil Projections with a 4.5% decline rate (Khebab at The Oil Drum (ibid)
He then recalculated the graphs with a 5.2% decline rate and got the following:
World Oil projections with a 5.2% decline rate Khebab at The Oil Drum (ibid)
Note that the peak date has dropped back until now (this was before the economic crisis became all that evident last year).
Now that is worrying enough, but the IEA report goes one step further noting that it now recognizes that the oil fields are declining at 6.7% per year, which is a condition that is much worse than that modeled above.
It makes it that much more difficult to sustain current levels of production as a plateau, and suggests that the decline in global production will be upon us much faster than the plot above shows. Sam, (who used to write as Khebab), provides updates with the input from last years IEA report.
The IEA now recognizes that non-OPEC country production has peaked and (according to Dr. Birol) that satisfactory levels of global production rests in the hands of very few.
"The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said.Unfortunately it has been the optimism of the IEA in the past that has, in part, brought us to this point. It would help if the EIA would also begin to recognize reality, but perhaps they still have that different agenda. . . . . .
The question of course now becomes what will replace the fuel we need for vehicles, given the short time available to find and produce it. I note, over at Climate Progress that there is some hope expressed in comments about the potential for algae.
Well as a strong proponent of that idea (though my proposals for funding keep getting shot down) I should be extremely surprised if any significant production comes about in less than an 8 – 10 year time frame. Bear in mind that to have any significant impact we are talking about needing a production base of more than 2 mbd against the likely shortfall within the next couple or three years. And I cannot see the will or funding to move the technology forward that fast. (Plus there is the “baby in a month” problem).
It will be interesting to see how fast (given that everyone is now off for vacations) if at all, this message spreads to the more general public.