Peaking of World Oil Production: Recent Forecasts

Because oil is a depleting, finite natural resource, world conventional oil production will reach a maximum, called “the peak,” after which production will decline. Using differing methodologies and information of widely varying quality, experts and organizations have attempted to forecast the likely year of conventional oil production peaking. Their range of estimates extends from late last year to an apparent denial that it will ever happen. Almost all forecasts are based on differing, often dramatically differing geological assumptions. Explicit account of investment rates in new and expanded production has been relatively rare.

Because of the large uncertainties, it is difficult to define an overriding geological basis for accepting or rejecting any of the forecasts. However, the IEA recently warned that worldwide investment in expanded oil production has been considerably less than needed to continue world oil production that is adequate to meet expected world demand. Thus, geological limits may be yielding to investment limitations.

As noted in previous literature, peak oil presents the world with a risk management problem of tremendous complexity and enormity. Prudent risk minimization requires the implementation of mitigation measures roughly 20 years before peaking to avoid a very damaging world liquid fuels shortfall. Since it is uncertain when peaking will occur or whether it will be due to geological or investment limitations, the challenge is indeed vexing.

Published in: US DOE/NETL-2007/1263
Available from: Global Oilwatch