Elsevier

Energy Policy

Volume 38, Issue 9, September 2010, Pages 5290-5295
Energy Policy

Communication
Global oil depletion: A review of the evidence

https://doi.org/10.1016/j.enpol.2010.04.046Get rights and content

Abstract

Within the polarised and contentious debate over future oil supply a growing number of commentators are forecasting a near term peak and subsequent decline in production. But although liquid fuels form the foundation of modern industrial economies, the growing debate on ‘peak oil’ has relatively little influence on energy and climate policy. With this in mind, the UK Energy Research Centre (UKERC) has conducted an independent, thorough and systematic review of the evidence, with the aim of establishing the current state of knowledge, identifying key uncertainties and improving consensus. The study focuses upon the physical depletion of conventional oil in the period to 2030 and includes an in-depth literature review, analysis of industry databases and a detailed comparison of global supply forecasts. This Communication summarises the main findings of the UKERC study. A key conclusion is that a peak of conventional oil production before 2030 appears likely and there is a significant risk of a peak before 2020.

Introduction

Conventional oil (namely crude oil, condensate and natural gas liquids) currently accounts for over 97% of global liquid fuels production and is still expected to account for around 90% in 2030 (IEA, 2008). But many commentators are forecasting a near-term peak and subsequent terminal decline in the production of conventional oil, with alternative sources being unable to ‘fill the gap’ on the timescale required (Aleklett et al., 2009, Campbell and Heapes, 2008). In contrast, others argue that liquid fuels production will be sufficient to meet global demand well into the 21st century, as rising prices stimulate new discoveries, enhanced recovery and the development of non-conventional resources such as oil sands (Adelman, 2003, Mills, 2008, Odell, 2004). While the global economic recession has changed the short-term outlook, many are forecasting renewed supply constraints around 2013 (Blanch et al., 2010, ITPOES, 2010).

Given the polarised, contentious and confused nature of the peak oil debate, the UK Energy Research Centre (UKERC) chose to undertake an independent, thorough and systematic review of the evidence, with the aim of establishing the current state of knowledge, identifying key uncertainties and improving consensus. The project focused upon the physical depletion of conventional oil in the period to 2030 and included an in-depth review of more than 500 studies, the analysis of industry databases and a detailed comparison of 14 global supply forecasts (Sorrell et al., 2009). The following summarises the main findings.

Section snippets

Context

Conventional oil is defined here to include crude oil, condensate and natural gas liquids (NGLs) and to exclude liquid fuels derived from oil sands, oil shale, coal, natural gas and biomass.1

Data quality and interpretation

Publicly available data sources are poorly suited to studying oil depletion and their limitations are insufficiently appreciated (Bentley et al., 2007). The databases available from commercial sources are better in this regard, but are also expensive, confidential and not necessarily reliable for all regions. While terms such as ‘proved’ (1P) and ‘proved and probable’ (2P) reserves are widely used, these are defined and interpreted in different ways with only limited progress towards

Key variables

While the observed lognormal size distribution of discovered fields is partly the result of sampling bias, there is insufficient evidence to conclude whether a ‘linear fractal’ or ‘parabolic fractal’ better describes the population size distribution (Laherrère, 2000). But the number of small fields is of secondary importance: while technical improvements and higher prices should make more of these fields viable, their exploitation will be subject to rapidly diminishing returns. Although there

Methods of estimating resource size

The ultimately recoverable resources (URR) of a region depend upon economic and technical factors as much as geology and can only be estimated to a reasonable degree of confidence when exploration is well advanced. There are a variety of methods for estimating URR, with ‘geological’ techniques being more appropriate for relatively unexplored regions and techniques based upon the extrapolation of production or discovery trends being more appropriate where exploration is advanced. The confidence

Methods of forecasting future supply

Methods of supply forecasting vary widely in terms of their theoretical basis, inclusion of different variables, level of aggregation and complexity. Each approach has its strengths and weaknesses and none should be favoured in all circumstances. Curve-fitting models are straightforward and widely used, but lack an adequate theoretical basis; are sensitive to the choice of functional form, neglect key variables and can perform poorly as a result. Econometric models provide a better match to

The global ultimately recoverable resource

Estimates of the global URR for conventional oil vary widely in their definitions, methods, assumptions and results. Although such estimates have been trending upwards for the last 50 years, the mean estimate of 3345 Gb from the USGS (2000) represents a substantial departure from the historical trend.2

The global supply outlook

Comparison of global oil supply forecasts is hampered by the lack of transparency of many of the models, the inconsistency in the definition and coverage of liquids and the range of methods and assumptions used. There is considerable scope for improving consensus by revealing and comparing key assumptions and systematically exploring the sensitivity of forecasts to those assumptions. Models need to better integrate supply and demand and explore a wider range of socioeconomic scenarios.

Although

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