The Assessment And Importance Of Oil Depletion

in Peak Oil by

Abstract for
Uppsala, Sweden, May 23-25, 2002
Organized by Uppsala University and ASPO, the Association for the Study of Peak Oil

by Colin J. Campbell

The Association for the Study of Peak Oil “ASPO” has three important missions:

  1. to study the endowment of oil in Nature;
  2. to model its depletion taking into account economics and technological factors; and
  3. to raise awareness of depletion so that governments and the public at large can plan accordingly.

The starting point is petroleum geology. A geochemical breakthrough in the 1980s gave insight into the generation of oil, explaining that the bulk of the world’s oil comes from a few epochs of extreme global warming. Oil was preserved only in certain well-understood geological settings. The World has now been so extensively explored that virtually all the prolific areas have been identified.

Understanding depletion is simple. Production starts after discovery and ends when the resource is exhausted, reaching a peak in between at about the half-way mark. Production has to mirror earlier discovery after a time-lag. Discovery peaked in the USA in 1930, followed forty years later by the corresponding peak of production. Discovery in the North Sea peaked in 1974, but advances in technology reduced the time-lag to just twenty-seven years. The same eternal pattern is being enacted from country to country. The fact that World discovery peaked in 1964 means that peak production is now imminent. Each year since 1981, we were finding less than we consumed.

The status of depletion depends on how much has been found and when was it found. The resulting discovery trend can be confidently extrapolated to show what is left to find and produce. These are simple questions but are difficult to answer because of ambiguous definitions and lax reporting practices. Despite the efforts of vested interests to obscure, deny and confuse, technical evidence gives a clear picture of depletion. Production from the North Sea is set to decline at about 6% a year, meaning that Europe’s indigenous supply will have halved in about ten years. World peak is likely around 2010 but could come sooner with higher demand from economic recovery.

Gas is less depleted than oil but has a very different depletion profile. Whereas oil production declines slowly towards exhaustion, gas, being more mobile, can be produced at a high level for a long time but faces an abrupt unannounced terminal decline.

Economic theory was built on the experience of the Industrial Revolution, which in turn relied on a cheap and abundant flow of energy, first from coal and later from oil and gas. The man was perceived to be master of his environment. But now rising population and dwindling resources have reversed the relationship. The imminent decline in the world’s supply of oil, which currently provides 40% of traded energy, calls for a radical change the economic principles on which the World is run, with far-reaching political consequences.

ASPO has a critical role to play in alerting governments to the reality of the situation, and in raising general awareness, so that the public will give governments the mandate for action. The issue cannot be left to market forces alone. Much can be done to ameliorate the tensions of transition, and in finding sustainable solutions. New policies are needed now because technical solutions have long lead times and the adjustments will be difficult.

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