Following a peak in production of crude oil, declining world production is likely within five years. In the absence of international agreements to cut consumption, oil demand will be forced down the only way the market knows through yet higher prices. The case for a near-term peak in world oil production rest on four key observations: 1. Oil discovery is well short of consumption levels. 2. Stated OPEC oil reserves are not audited or verified. 3. Unconventional oil resources are volumetrically large but limited in their sustainable production rates. 4. Proper assessment of depletion, and recognition of the number of countries where production is already in terminal decline, underpins predictions of a near-term peak in global oil production. This paper will expand on these four points in turn, to build a detailed assessment of why a peak in global oil production is likely within five years. In doing so, the uncertainty and inadequacy of available information relating to world oil reserves and future production potential will also be highlighted. The transport industry and research community face many challenges in the years ahead. Planning for and adapting to a declining world oil supply is likely to be the most significant. (a) For the covering entry of this conference, please see ITRD abstract no. E216058.
Abstract