Peer-reviewed

"Peak oil" refers to the future decline in world Production of crude oil and to the accompanying potentially calamitous effects. The majority of the literature on peak oil is non-economic and ignores price effects even when analyzing policies. Unfortunately, most economic models of depletable resources do not generate production peaks. I present four models which generate production peaks in equilibrium. Production increases in the models are driven by: demand increases, cost reductions through advancing technology, cost reductions through reserve additions, and production capacity increases through site development. Production decreases are driven by scarcity. The models do not rely on market failures and indicate that a peak in production may arise from efficient intertemporal optimization. The models show that prices are a better indicator of impending scarcity than peaking is and that peak production can occur when any percentage from 0-100% of the original deposit remains.

Published in: Energy Journal, Volume 29, Issue 2, 2008, Pages 61-79
Available from: The Energy Journal

The well known "Hubbert curve" assumes that the production curve of a crude oil in a free market economy is "bell shaped" and symmetric. The model was first applied in the 1950s as a way of forecasting the production of crude oil in the US lower 48 states. Today, variants of the model are often used for describing the worldwide production of crude oil, which is supposed to reach a global production peak ("peak oil") and to decline afterwards. The model has also been shown to be generally valid for mineral resources other than crude oil and also for slowly renewable biological resources such as whales. Despite its widespread use, Hubbert's modelis sometimes criticized for being arbitrary and its underlying assumptions are rarely examined. In the present work, we use a simple model to generate the bell shaped curve curve using the smallest possible number of assumptions, taking also into account the "Energy Return to Energy Invested" (EROI or EROEI) parameter. We show that this model can reproduce several historical cases, even for resources other than crude oil, and provide a useful tool for understanding the general mechanisms of resource exploitation and the future of energy production in the world's economy.

Published in: Energies, Volume 2, Issue 3, September 2009, Pages 646-661
Available from: Energies

This study assesses the threat that depletion poses to the availability of petroleum resources. It does so by estimating cumulative availability curves for conventional petroleum (oil, gas, and natural gas liquids) and for three unconventional sources of liquids (heavy oil, oil sands, and oil shale). The analysis extends the important study conducted by the U.S. Geological Survey (2000) on this topic by taking account of (1) conventional petroleum resources from provinces not assessed by the Survey or other organizations, (2) future reserve growth, (3) unconventional sources of liquids, and (4) production costs. The results indicate that large quantities of conventional and unconventional petroleum resources are available and can be produced at costs substantially below current market prices of around US$120 per barrel. These findings suggest that petroleum resources are likely to last far longer than many are now predicting and that depletion need not drive market prices above the relatively high levels prevailing over the past several years.

Published in: Energy Journal, Volume 30, Issue 1, 2009, Pages 141-174
Available from: The Energy Journal

The search for feedstock replacement options within the petrochemical industry should logically be based upon non-fossil resources. Retaining the functionality of the biochemicals in biomass for use as chemical products and precursors can lead to a sizeable reduction of fossil fuel consumption. This was assessed by using a limited energetic and exergetic cradle-to-factory gate analysis following the principles of life cycle assessments (LCA). A calculation matrix was created for 16 bioenergy crops in their corresponding regions and for a conceptual biorefinery oriented towards existing bulk-chemical products. The optimal biorefinery cropping system was determined according to the fossil fuel mitigation efficiency in relation to chemical feedstock products and land use consumption. The “worst” performer still has a replacement potential of 22.2 GJenergy/tonproduct and 125 GJenergy/ha while the “best” performer can achieve 50.8 GJenergy/tonproduct and 721 GJenergy/ha. In addition to energy, exergy evaluation was included, to indicate potential areas of energy efficiency improvement. The combined evaluations demonstrate that the highest potential of biomass to replace fossil fuel resources is as an alterative feedstock source in the petrochemical industry.

Published in: Chemical Engineering Research and Design, article in press
Available from: ScienceDirect

Denmark possesses only a small share of the exploitation rights to North Sea oil and is a minor producer when compared to Norway and the UK. However, Denmark is still an oil exporter and a very important supplier of oil for certain countries, in particular Sweden.
A field-by-field analysis of the Danish oil and gas fields, combined with estimated production contribution from new field developments, enhanced oil recovery and undiscovered fields, provides a future production outlook. The conclusion from this analysis is that by 2030 Denmark will no longer be an oil or gas exporter at all. Our results are also in agreement with the Danish Energy Authority’s own forecast, and may be seen as an independent confirmation of their general statements.
Decreasing Danish oil production, coupled with a rapid decline in Norway’s oil output, will force Sweden to import oil from more distant markets in the future, dramatically reducing Swedish energy security. If no new gas suppliers are introduced to the Swedish grid, then Swedish gas consumption is clearly predestined to crumble alongside declining Danish production. Future hydrocarbon production from Denmark displays a clear link to Sweden’s future energy security.

Published in: Energy, article in press
Available from: ScienceDirect or Global Energy Systems

According to the long term scenarios of the International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA), conventional oil production is expected to grow until at least 2030. EIA has published results from a resource constrained production model which ostensibly supports such a scenario. The model is here described and analyzed in detail. However, it is shown that the model, although sound in principle, has been misapplied due to a confusion of resource categories. A correction of this methodological error reveals that EIA’s scenario requires rather extreme and implausible assumptions regarding future global decline rates. This result puts into question the basis for the conclusion that global “peak oil” would not occur before 2030.

Published in: Energy Policy, article in press
Available from: ScienceDirect or Global Energy Systems

Continued reliance on oil is unsustainable and this has resulted in interest in alternative fuels. Coal-to-liquids (CTL) can supply liquid fuels and have been successfully used in several cases, particularly in South Africa. This article reviews CTL theory and technology. Understanding the fundamental aspects of coal liquefaction technologies is vital for planning and policy-making, as future CTL systems will be integrated in a much larger global energy and fuel utilization system.
Conversion ratios for CTL are generally estimated to be between 1 and 2 barrels/ton coal. This puts a strict limitation on future CTL capacity imposed by future coal production volumes, regardless of other factors such as economics, emissions or environmental concerns. Assuming that 10% of world coal production can be diverted to CTL, the contribution to liquid fuel supply will be limited to only a few mega barrels per day. This prevents CTL from becoming a viable mitigation plan for liquid fuel shortage on a global scale. However, it is still possible for individual nations to derive significant shares of their fuel supply from CTL, but those nations must also have access to equally significant coal production capacities. It is unrealistic to claim that CTL provides a feasible solution to liquid fuels shortages created by peak oil. For the most part, it can only be a minor contributor and must be combined with other strategies.

Published in: International Journal of Energy Research, article in press
Available from: Wiley Interscience or Global Energy Systems

The world petroleum complex has been on a treadmill, struggling to add increments of new production to keep pace with growing demand and depletion. If the oil price shock of 1979–1981 is considered an aberration due to panic inventory building, recent real oil prices are at levels not seen since the 19th century. The analysis in this review shows that geophysical models of peak oil predict a pre-mature peaking in world oil production and a decline rate more rapid than the average 3% annual rate of decline observed in countries past peak production. This review also finds that political decisions and events play an important role in determining world oil production and that reserve additions respond to expected prices and costs. The actions of the world oil cartel, the business cycle, and the delayed response of oil demand and supply to prices indicate that the peak of conventional oil production will only be known until well after it has occurred. Despite rapid advances in output from Brazil and West Africa, crude oil production outside OPEC and Russia appears to have peaked in 2002, at least for now. Another tangible indicator of a coming peak is the expansion of unconventional oil production, which is on a collision course with efforts to curb greenhouse gas emissions. A clear policy direction for carbon regulation that encourages technological innovation is imperative as peak oil approaches.

Published in: International Review of Environmental and Resource Economics, Volume 1, Issue 4, Pages 327-365
Available from: International Review of Environmental and Resource Economics

In recent years, the economic and political aspects of energy problems have prompted many researchers and analysts to focus their attention on the Hubbert Peak Theory with the aim of forecasting future trends in world oil production.
In this paper, a model that attempts to contribute in this regard is presented; it is based on a variant of the well-known Hubbert curve. In addition, the sum of multiple-Hubbert curves (two cycles) is used to provide a better fit for the historical data on oil production (crude and natural gas liquid (NGL)).
Taking into consideration three possible scenarios for oil reserves, this approach allowed us to forecast when peak oil production, referring to crude oil and NGL, should occur. In particular, by assuming a range of 2250–3000 gigabarrels (Gb) for ultimately recoverable conventional oil, our predictions foresee a peak between 2009 and 2021 at 29.3–32.1 Gb/year.

Published in: Energy Policy, article in press
Available from: ScienceDirect

The logistic function has been used to describe the discovery and production of oil and natural gas at the national level. This type of functional representation provides a direct approach for estimating the available supply of the resource and the time at which that supply will be essentially depleted. The mathematical characteristics of the function imply restrictions, which are not necessarily applicable to natural resource-production patterns. We examine these restrictions in the context of crude-oil production at a regional level. We attempt to show that statistical estimates of the functional parameters based on actual crude-oil production could satisfy the mathematical restrictions inherent in the logistic function.

Published in: Energy, Volume 9, Issue 7, July 1984, Pages 565-570
Available from: ScienceDirect