The IEA has put out their World Energy Outlook for 2008. The whole document can be had for about 150 Euros if you like, or there will be plenty of in-depth analysis at places like The Oil Drum and elsewhere.
Here are a few key points to ponder…
Per excerpts from the Guardian:
The agency says there is enough oil to support rising demand and output, with proven reserves of up to 1.3tn barrels – or enough for 40 years – and potential reserves of as much as 3.5tn barrels. But it says the increased output “hinges on adequate and timely investment”.
I’m sure that will be no big deal in our current financial dilemma…
Up to 64m barrels a day of extra gross capacity – the equivalent to almost six times that of Saudi Arabia today – needs to come on stream between 2007 and 2030. Almost half of that is required by 2015, with an extra 7m barrels a day over current plans approved within the next two years “to avoid a fall in spare capacity towards the middle of the next decade”.
Say what? We are jumping up and down when we find fields capable of punching out 100,000 barrels per day, but to keep up we will need to find multiple fields capable of putting out over one million barrels of high-quality (read: relatively light & sweet crude) per day? How is this possible? Does anyone truly believe that the outer US continental shelf or the Arctic will produce enough oil to meet this expected demand?
Here’s a graph of the IEA’s projected numbers for oil output over the next few decades, courtesy of the Oil Drum. (original source here). Note that by 2020 we are supposed to replace about half of current production with fields yet to be developed, and by 2030, a good 20-25% of overall output is to come from fields yet to be found. How comfortable are you with that thought? Personally, it doesn’t give me a warm fuzzy… We will definitely find some additional fields over time, but I have little confidence that they will be large enough or possess high-quality oil that will be needed to replace what is depleting right now.
It appears the IEA has backed off their initial estimate of a 9.1% decline in existing fields to a lower figure of 6.7%. Slightly more comforting… sorta.
Tumbling oil & gasoline prices have taken many people’s focus away from oil markets right now. Most of us have other things to worry about like jobs, housing prices, etc. Keep in mind that prices have only corrected to where they were in 2005 or so. The current financial mess is causing a deflationary cycle right now that has both strengthened the US Dollar and hurt businesses of all sizes. Both of these forces, along with others, has triggered a massive decline in oil prices for now. How long prices stay low is anyone’s guess and in a large part, it probably depends on the larger economic picture.
One thing is certain for sure… current fields are depleting, and we are banking our industrial future on finding oil fields of a size and number that have not been found in 30 years or more.
Plenty of good analysis & discussion at The Oil Drum: