The point at which the world’s oil output would peak and production would enter a terminal decline might become a global reality as soon as 2011, an expert predicted on Tuesday.
Peak oil, which referred to the point when no further production expansion would be possible, had become a contentious issue of debate in recent years with analysts predicting various dates and scenarios at when peak oil would be a reality.
Speaking at the Oil Africa conference in Cape Town Energy Institute researcher Chris Skrebowski said that while a debate on the issue continued to rage globally, the reality was that the world would soon begin to run out of oil reserves.
In fact, he said that some oil-producing countries had already begun to experience peak oil.
“Approximately 28 of the world’s significant - as well as 40 minor - oil producers are experiencing a decline in production.”
To this extent, Skrebowski explained that the Organisation for Economic Cooperation and Development (OECD) oil-production peaked in 1997 and had now experienced a decline of over 10% of 2,2-million barrels a day a day (bbl/d).
Similarly, the North Sea oil field had peaked in 2000 and production had declined by 1,6-million bbl/d, and non-Opec production peaked in 2002 and had declined by 771 000 bb/d.
The sum total of this fall in production amounted to a 35% decline in global production. However, Skrebowski insisted that it was only once the world experienced a 51% decline in production that the state of peak oil would be reached.
According to Skrebowski, there were eight key pieces of evidence that insisted that the world was looming ever-closer to peak oil. These included the falling rate of discoveries of new oil-fields; sustained high oil prices; the age of the largest fields; the lack of real growth potential in oil-producing countries; the current lack of incremental flows; the sustained depletion of oil reserves; nongeologic threats to future oil-supplies; and the struggle to hold production by many of the major oil producers.
He explained that peak oil was predicted to become a reality in 2011 on the basis that the world’s major oil fields were being depleted at a rate of 4,5% a year.
In other words, if the rate of depletion of the world’s major oil fields continued at a rate of between 4,5% and 5% a year, oil production could peak, and subsequently decline, as early as 2011. However, if the rate of depletion should exceed 5% a year, peak oil could become a reality as early as 2010, said Skrewboski.
Once the state of peak oil was reached, which was represented as 93-million bb/d, Skrebowski explained that global supply would rapidly fall short of demand and would further drive up the oil price.
To this extent, Skrebowski predicted that the oil price could reach as high as $140/bl by 2011 and would continue to rise as supply became increasingly constrained.
Growth in demand
In terms of growth in demand, International Energy Agency (IEA) Senior Analyst Eduardo Lopez said that the demand for oil would be a third higher than it was in 1996. This equated to a projected demand of 94,3-million bb/d, or 50 000 gallons every second, by 2012.
However, chairperson of the Association for the Study of Peak Oil in South Africa Simon Ratcliffe warned that if demand for oil continued to increase unabated, the world’s oil reserves would be deplete by 2030.
As a result, the world was teetering on the edge of a major oil-crisis and Ratcliffe believed that there was an urgent need to reduce dependency on the liquid commodity to avoid an impending disaster.
Ratcliffe thus concluded that the real opportunities in the energy sector lay in renewables and that more effort needed to be invested into developing alternative fuel sources.