The Association for the Study of Peak Oil&Gas, ASPO (see various articles from K. Aleklett and C.J. Campbell at www.peakoil.net ), a group of former petroleum geologists in the service of prominent petroleum corporations (e.g. BP Amoco) argues for taking a different angle. It assumes a steep ascent in the output curve up to a peak, followed by a comparatively flat descent. The result is that the peak in production comes well ahead of the depletion midpoint, meaning that the production curve peaks far earlier than hitherto anticipated. Initially, this applies to oil, and then, with a time lag, to natural gas. In its mid-2004 updated forecast for oil, the ASPO brought the peak for oil forward from 2010 to 2008.
Dramatic implications of ASPO scenario
Were the ASPO scenario to prove correct, the consequences could be dramatic. Within the space of just a few years, oil supply would start to shrink in the face of trend growth in global demand, driven not least by the increasing hunger for energy in the densely populated Asian countries. ExxonMobil expects 80% additional global demand for energy up to 2020 to come from the developing countries ( see ExxonMobil, A Report on Energy Trends, February 2004, p.3 ). In the worst-case scenario, the already emerging widening of supply/demand gap could trigger a shortage shock leading to price crisis. It would also impact world economic development.
Also conceivable, though, is a more or less steady climb in the price of oil (and later also natural gas), which would tend to rein in demand for the energy carrier and encourage gradual substitution. What is more, price increases would imply an expansion of the reserve base as non-conventional reserves and current resources become more price-competitive. The peak calculated concerning existing reserves could then be delayed for a few more years. The possibility of realigning the energy mix without radical economic disturbance would be all the more likely, the sooner politicians, industry and private consumers respond to the signs of the times in the markets for hydrocarbons.
Venturing to look farther forward on the supply of energy, say to the end of our century, by then the future will already be behind us, at least regarding petroleum. The end-of-the-fossil-hydrocarbons scenario is not, therefore, a doom-and-gloom picture painted by pessimistic end-of-the-world prophets, but a view of scarcity in the coming years and decades that must be taken seriously. Forward-looking politicians, company chiefs, and economists should prepare for this in good time, to effect the necessary transition as smoothly as possible.
Conclusion: Time to act