Limits to Global Petroleum Production - An Update on Recent Analyses

There is currently a spam e-mail making the rounds claiming the existence of a largely unreported recent crude oil discovery in North America. The discovery apparently changes everything for U.S. consumers. In short, the message reports that there is “. . . enough crude to fully fuel the American economy for 2,041 years straight”!!

How the media missed this stunning news is hard to imagine. But this got us to thinking about projections from the U.S. Geological Survey (USGS) just a few years back. According to those projections, world oil supplies were being exploited at such a rate that continued increases in supply would not be possible for much longer – that world supplies would hit a peak, after which production would decline even in the face of rising economic demand. That this was followed within several years by another report, commissioned by the U.S. Department of Energy, that said much the same thing made the projections hard to ignore.

A survey of recent literature dedicated to the topics of future petroleum production vs. consumption, and peak oil revealed an interesting mixture of articles both reinforcing the likelihood of near-term limits to petroleum availability and deriding any notion that production limits are in sight. One report in particular caught our eye – a 2010 report from the U.S. Defense Department Joint Forces Command. The report included the sobering observation that “Assuming the most optimistic scenario for improved petroleum production through enhanced recovery means, the development of non-conventional oils (such as oil shale or tar sands) and new discoveries, petroleum production will be hard pressed to meet the expected future demand of 118 million barrels per day.” The report went on to indicate that global surplus oil production capacity could entirely disappear by 2012, and that as early as 2015 a shortfall of 10 million barrels per day could develop.

Here we explore recent findings of leading energy forecasting organizations regarding future petroleum availability and consumption and revisit the subject of peak oil - a topic addressed in an earlier Dovetail report. We conclude with observations regarding U.S. approaches to energy policy.