Transcript Long Term World Oil Supply (A Resource Base/Production Path Analysis) Executive Summary - These pages summarize a recent EIA presentation on when.

Long Term World Oil Supply
(A Resource Base/Production Path Analysis)
Executive Summary
- These pages summarize a recent EIA presentation on when world
conventional oil production will peak and the effect of different
estimates of the world conventional oil resource base.
- A larger resource base generally leads to a later production peak.
World oil resource base estimates have trended upward over the
years, from 600 billion barrels estimated in the early 1940’s to as
high as 3,900 billion barrels estimated this year by the U.S.
Geological Survey (USGS).
- To illustrate the important factors affecting estimates of the peak
production year, EIA postulated 12 scenarios based on three
current USGS world conventional oil resource base estimates
(2,248, 3,003 and 3,896 billion barrels - corresponding to high,
mean and low probabilities of occurrence) and four world oil
production annual growth rates (0, 1, 2 and 3 percent.)
Executive Summary (Continued)
- Using a relatively simple algorithm, peak production years were
estimated. The peak production year estimates ranged from 2021
to 2112 across the 12 scenarios. For example, using the USGS
mean (expected) resource base estimate (3,003 billion barrels) and
an annual production growth rate of 2 percent (similar to the current
rate), the estimated peak production year is 2037.
- EIA’s estimates for production peaks occur later than those
generated by other analysts, some of whom predicted the
production peak will occur as early as 2004. EIA’s analysis
indicates instead that world conventional oil production may
increase two decades or more before it begins to decline.
Executive Summary (Continued)
- EIA’s relative optimism is based on:
(1) use of the current USGS world conventional oil resource
estimates, which are both larger and more technically sound than
past resource estimates used by others, and
(2) use of a methodology for estimating the post-peak production
path that is based on the reserve to production (R/P) ratio observed
in the United States since oil production peaked in 1970.
- Other factors, e.g., choice of different production curve
hypotheses, market dynamics, technological advances, and
economic policies, could change the results, perhaps substantially.
Overview
• Oil Resources (Estimates)
• Year of Peak Oil Production (Scenarios)
– U.S.
– World
• What Might Change the Estimated Time of Peak Production?
• Conclusions
The Year of Peak Production
When will worldwide conventional oil production
peak?
Lower 48 Crude Oil Reserves & Production, 1945-2000
Crude Oil Reserves, Billion Barrels
35
Peak
Reserves
1959
4.0
Peak
Production
1970
3.5
30
3.0
25
2.5
20
2.0
15
1.5
10
Lower 48
Reserves
1.0
5
Lower 48
Production
0.5
0
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
0.0
2000
Crude Oil Annual Production, Billion Barrels
40
Texas Oil and Condensate Production, and
Texas First Purchase Price (FPP), 1980-1999
100
Thousand Barrels Per Day
1986 Production
Decline 13%
Average old well declines
15% each year.
2,500
80
2,000
1986
Price
Decline
51%
1,500
1,000
500
90
1998
1997
Production
Production
Decline
Increase
14%
1%
70
60
50
1998
Price
Decline
44%
40
30
20
Production
TX FPP 1999$
0
Jan-80 Jan-82 Jan-84 Jan-86 Jan-88 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98
10
0
TX First Purchase Oil Price, 1999$
3,000
Published Estimates of World Oil Ultimate Recovery
USGS 5% 2000
USGS Mean 2000
USGS 95% 2000
Campbell 1995
Masters 1994
Campbell 1992
Bookout 1989
Masters 1987
Martin 1984
Nehring 1982
Halbouty 1981
Meyerhoff 1979
Nehring 1978
Nelson 1977
Folinsbee 1976
Adams & Kirby 1975
Linden 1973
Moody 1972
Moody 1970
Shell 1968
Weeks 1959
MacNaughton 1953
Weeks 1948
Pratt 1942
0
0.5
Source: USGS and Colin Campbell
1
1.5
2
2.5
Trillions of Barrels
3
3.5
4
Different Interpretations of a Hypothetical 6,000 Billion Barrel
World Original Oil-in-Place Resource Base
6,000
5,000
4,200
Billion
Unrecovered
3,000
Billion
Unrecovered
Unrecoverable
Reserves
Growth
Undiscovered
4,000
3,000
Reserves Growth
Adds 10%
2,000
50%
Recovery
Factor with
Reserves
Growth
40%
Recovery
Factor
Without
Reserves
Growth
1,000
Proved
Reserves
Cumulative
Production
30%
Recovery
Factor
0
USGS Approach
1995 Campbell/Laherrere Approach
Campbell-Laherrère World Oil Production Estimates, 1930-2050
Production Peak
2004
Campbell
Laherrere’s Oil Production Forecast, 1930-2150
Production Peak
2010
Laherrere
EIA World Oil Production Projections, 1990-2020
60
High Economic Growth Case
Reference Case
Low Economic Growth Case
Billion Barrels Per Year
50
High Oil Price Case ($28.04 per barrel in 2020)
Low Oil Price Case ($14.90 per barrel in 2020)
40
Reference Case ($22.04 per barrel in 2020)
30
20
10
0
1990
1995
2000
Source: International Energy Outlook 2000
2005
2010
2015
2020
Annual Production with 2 Percent Annual Growth & Decline
40
Billion Barrels per Year
35
30
USGS Estimates of Ultimate Recovery
2016
Ultimate Recovery
Probability
BBls
---------------------------Low (95 %)
2,248
Mean (expected value)
3,003
High (5 %)
3,896
2% Growth
& Decline
25
High Prices Can
Affect Demand
4.1% Decline
1979-1983
20
15
10
History
7.8% Growth
1963-1973
Mean
5
0
1900
1925
1950
1975
2000
2025
2050
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2075
2100
2125
Annual Production Scenarios with 2 Percent Growth Rates and
Different Decline Methods
60
USGS Estimates of Ultimate Recovery
History
2037
Billion Barrels per Year
50
40
Ultimate Recovery
Probability
BBls
---------------------------Low (95 %)
2,248
Mean (expected value)
3,003
High (5 %)
3,896
Mean w/ 2% Growth and
2% Decline
Mean w/ 2% Growth and
10 R/P Ratio Decline
2016
2% Growth
& 10 R/P Ratio Decline
30
2% Growth
& 2% Decline
20
10
0
1900
1925
1950
1975
2000
2025
2050
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2075
2100
2125
Annual Production Scenarios with 2 Percent Growth Rates and
Different Resource Levels (Decline R/P = 10)
70
USGS Estimates of Ultimate Recovery
Billion Barrels per Year
60
50
40
2047
Ultimate Recovery
Probability
BBls
---------------------------Low (95 %)
2,248
Mean (expected value)
3,003
High (5 %)
3,896
2%
Growth
2037
2026
Decline
R/P = 10
30
20
10
0
1900
History
Mean
Low (95 %)
High (5 %)
1925
1950
1975
2000
2025
2050
2075
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2100
2125
Annual Production Scenarios for the Mean Resource Estimate
and Different Growth Rates (Decline R/P = 10)
70
USGS Estimates of Ultimate Recovery
2030 @ 3% Growth
Billion Barrels per Year
60
50
Ultimate Recovery
Probability
BBls
---------------------------Low (95 %)
2,248
Mean (expected value)
3,003
High (5 %)
3,896
2037 @ 2% Growth
2050 @ 1% Growth
40
30
Decline
R/P = 10
20
History
10
0
1900
Mean
1925
1950
1975
2000
2025
2050
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2075
2100
2125
Annual Production Scenarios for the Mean Resource Estimate
Showing Sharp and Rounded Peaks
60
Billion Barrels per Year
50
40
USGS Estimates of Ultimate Recovery
Peak in 2037
Decline @ R/P = 10
Ultimate Recovery
Probability
BBls
---------------------------Low (95 %)
2,248
Mean (expected value)
3,003
High (5 %)
3,896
30
Peak in 2030
Decline @ 5 %
2%
Growth
20
History
10
0
1900
Mean
1925
1950
1975
2000
2025
2050
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2075
2100
2125
12 EIA World Conventional Oil Production Scenarios
90
Peak Range 46 yrs or 91 yrs
USGS Estimates of Ultimate Recovery
80
Billion Barrels per Year
70
60
2067
2021
Ultimate Recovery
Probability
BBls
---------------------------Low (95 %)
2,248
Mean (expected value) 3,003
High (5 %)
3,896
2112
3%
Growth
2%
Growth
50
900 Billion Bbls
Moves Peak 10
Years
From 2037 - 2047
40
1%
Growth
Decline
R/P = 10
30
20
10
0
1900
History
Mean
Low (95 %)
High (5 %)
1925
1950
0%
Growth
1975
2000
2025
2050
Note: U.S. volumes were added to the USGS foreign volumes to obtain world totals.
2075
2100
2125
WORLD OIL PRODUCTION SCENARIOS
Estimated Peak
Production Rate
Ultimate
Annual
Probability of Recovery Production
(Million
(Million
Estimated
Ultimate ReGrowth Rate
barrels per
barrels per
(Billion
Peak
Year
covery
year)
day)
barrels)
(Percent)
95 Percent
2,248
2,248
2,248
2,248
0.0
1.0
2.0
3.0
2045
2033
2026
2021
24,580
34,820
42,794
48,511
67
95
117
133
Mean
(expected
value)
3,003
3,003
3,003
3,003
0.0
1.0
2.0
3.0
2075
2050
2037
2030
24,580
41,238
53,209
63,296
67
113
146
173
5 Percent
3,896
3,896
3,896
3,896
0.0
1.0
2.0
3.0
2112
2067
2047
2037
24,580
48,838
64,862
77,846
67
134
178
213