World Oil Production Has Not Reached Peak

World Oil Production Has Not Reached Peak – In this section and the next few articles, we will talk about The Petrodollar and the Geopolitics of Oil which is part of Tesla’s Revolution as the leader of the electric car company today. To understand more, we recommend reading the following article – and the series;

Is Wind Energy a Great Success as Well?

Oil and Power — Who’s More Powerful?

Oil after the Second World War

The war in Iraq after 9/11 was about oil?

Oil Play a Role in the First Gulf War

Petrodollar Causes Many Wars

Oil is a Weapon in a Financial and Economic War

Natural Gas Play a Role in this New ‘Cold War’

World Oil Production Has Not Reached Peak

World Oil Production Has Not Reached Peak
Credit: LA Visions

We need to find new oil fields to continue producing enough oil, yet the volume of discovered oil has declined every decade since the 1960s. Real warning signs for peak oil appeared in the 1980s, as global annual production levels rose above the number of discovered barrels. For several decades we have been eating into our stock of oil in the ground. Yet, to the surprise of many, total oil production has continued to increase substantially in the last 10 years,70 despite the growing gap between discoveries and production.

The answer to this mystery relates to what type of oil we are talking about. Oil production in recent years increased only due to rapid growth in unconventional oil production from shale oil, tar sands, extra-heavy oil, and deep-sea oil fields. The total sum of conventional easy-to-produce oil has declined since at least 2005, from a peak of around 68 to a level of 60 million b/d (figure 1). This is oil that is extracted in either onshore or shallow offshore reservoirs, up to 300 meters depth, and without special techniques such as hydraulic fracturing or heat injection. So conventional easy-to-extract Peak Oil has arrived already, just as we predicted in 2008.

Other sources of oil cost up to $90 per barrel and require far greater infrastructure and labor investments. The increasing need for oil companies to invest in unconventional oil to expand production is a sign of oil companies’ belief in the end of easy cheap-to-extract oil. Ex-Shell CEO van der Veer has explained the end-of easy-oil concept very well in several publications. This statement was published in a Council of Foreign Relations publication in 2008;

So what is easy oil? We don’t know exactly but we wouldn’t be surprised if this oil would peak somewhere in the next 10 years. Then there’s the unconventional oil. We’ve got the unconventional oil onstream. But what the total is, we are not that precise.

World Oil Production Has Not Reached Peak
Figure 1.

In addition to conventional and unconventional oil, three other sources of liquid fuels, not shown in figure 1, exist; natural gas liquids (NGL), biofuels, and refinery gains. All have added to total world liquid fuel supplies in the last two decades. NGLs are produced as a part of natural gas extraction and are primarily converted into petrochemicals and to lesser extent gasoline. Total production of NGLs grew from 6.4 to 10.5 million b/d between 2000 and 2015. Biofuels have a non-fossil origin and are derived from corn ethanol in the United States, sugarcane in Brazil, and sugar beets and rapeseed in the EU, and grew from 0.3 to 2.6 million b/d in the same period. And refinery gains are increases in volume when processing crude oil because the resulting products weigh less per unit of volume than crude oil doe. In a simplified sense the crude oil molecules when split are ‘spread’ across more liters. Refinery gains grew from 1.5 to 2.4 million b/d between early 2000 and the end of 2015. 

In 2006, the International Energy Agency (IEA) predicted that by 2030, demand and supply could reach 116 million barrels per day, as an extrapolation from previous years. Global demand for crude oil grew an average of 1.8% per year from 1994 to 2006. After reaching a high of 86 million barrels per day in 2007, however, world oil consumption decreased in both 2008 and 2009 due to the international financial crisis. At present oil demand is projected by the IEA to increase by 20% from 2007 levels, to reach 104 million barrels per day by 2030, a 0.8% average annual growth, mainly due to demand growth in the transportation sector. Over 65% of the oil used in the United States, and 59% worldwide, is used in passenger vehicles powered by internal combustion engines. This Revolution is therefore of particular importance if we are to mitigate the effects of peak oil.

6 thoughts on “World Oil Production Has Not Reached Peak

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