0 Ii Back on the Global Agenda a Permanent Decline in Global Oil Production Rate Is Virtually Certain to Begin Within 20 Years

commentary 0 ii back on the global agenda A permanent decline in global oil production rate Is virtually certain to begin within 20 years. Serious planning is needed to deal with the economic consequences.

deplete global reserves by the year 2036. The tion rate over a year is 3 million barrels a day.) Craig Bond Hatfield average estimate of about 550 billion barrels So OPEC must increase its production In 1985, global oil con of producible oil yet to be discovered7 would capacity significantlyifit is to meet even con sumption was 59.7 mil add another 21 years in the unlikely event servative projections of demand by 2005. lion barrels per day1; by that there is no growth in consumption rate. What will maximum potential production 1995 it was more than 69 But such calculations are unrealistic, capacity be between 2010 and 2015, when million barrels per day2• because global oil production rate will pass OPEC will be near (just approaching or just This 16 per cent rise in its maximum and begin to decline long beyond) the mid-point of its ultimate pro demand was supplied almost before resources are exhausted. For example, duction? entirely by an increase in oil oil production in the United States reached The world probably will reach its maxi production by members ofthe its peak in 1970 and has declined since, as was mum oil production rate in the nextl5 years. Organization of Petroleum clearly predicted in 1956 (ref. 8). This fore Growth in global oil-consumption rate dur Exporting Countries ( OPEC) cast was the first to apply to oil production a ing 1996 was considerably greater than its - mostly in the Middle East mathematical model that yields growth in average annual growth for the past ten years. - from 16.1 to 25 million production rate until about half of the pro Such increases are mainly driven by growing barrels per day1,3. Growth in ducible resource has been consumed, after demand in countries where economic production in the North which the production rate declines until the growth is accelerating: since 1985, energy use Sea, Latin America and resource is exhausted. It is possible that new has grown approximately30 per cent in Latin Asia has barely exceeded oil-recovery technology, as used in the North America, 40 per cent in Africa and 50 per cent precipitous declines in Sea, could extend growth in production rate inAsia1• US and Russian oil pro beyond the point at which half of the pro Energy consumption in developing duction. ducible resource has been consumed, but in countries could surpass that in economically Geological data indicate this event the subsequent decline in rate developed countries within 20 years. There that, during the next ten would be accelerated. will be growing competition for a dwindling years, oil production outside oil supply, which raises the question of how 0 PEC countries will remain incapable ofsig How long can growth continue? long standards ofliving can rise in the devel nificant, sustained growth and is likely to For how long can the global oil-production oping world and how long they can be main begin a permanent decline during the first rate continue to grow? Even if the reported tained in the developed world. decade of the twenty-first century. This reserves were accurate, the addition of the Despite the intensive, intergovernmental seems inevitable because new discoveries of average estimate of about 550 billion barrels debates on the environmental effects of reserves are not keeping pace with produc of producible oil yet to be discovered would energy policies, geological constraints on the tion. Globally, new discovery has averaged yield 1,550 billion barrels of oil remaining to amount of inexpensive fluid fuel that can be less than 9 billion barrels per year since 1985 be produced. Taken together with the produced will soon override governments' (ref. 4), while consumption has averaged approximately 800 billion barrels already decisions about future rates of fossil-fuel more than 23 billion barrels per year1• The consumed, this gives 2,350 billion barrels of burning. The past century of unprecedented rate of discovery peaked in the 1960s and has 'ultimate' production, which is greater than economic growth has been based largely on since declined5 , despite record high rates of several recent estimates of ultimate oil pro increasing availability of cheap but rapidly exploration in the early 1980s. duction6,7. The mid-point, at which half of dwindling petroleum resources. It is unfash the ultimate production will have been con ionable in energy policies and economic Low reserves sumed, would be the year 2011, ifproduction theory to recognize a time limit on growth in Most of the reported 'growth' in oil reserves rate remains at its present level. oil consumption rate. But the arithmetic on during the past decade has been from revised But if, as is likely, some of the reported which my argument is based must be estimates: in 1988 and 1989, Venezuela, Iran, reserves do not exist, or if, as discovery rates acknowledged. The coming era of perma Iraq, Abu Dhabi and Saudi Arabia reported of recent years suggest, we have less than 550 nent decline in oil-production rate and the upwards revisions totalling 277 billion bar billion barrels of producible oil yet to dis economic and social implications of this rels 1• This accounts for nearly all the growth cover, or if consumption continues to grow, phenomenon demand serious planning by in global reserves of oil from 1987 (700 bil cumulative production will reach half of the the world's governments. D lion barrels) to 1990 (1,000 billion barrels). ultimate production in the first few years of Craig Bond Hatfield is in the Department of Geology, Because it is improbable that these OPEC the twenty-first century. In this case, global University of Toledo, Toledo, Ohio 43606, USA. countries had valid reasons for such gargan oil-production rate will peak and begin its 1. Basic Petroleum Data Book: Petroleum Industry Statistics Vol. tuan and simultaneous revisions, it has been decline during the first or second decade of XVII, No. 1 (American Petroleum Institute, Washington DC, suggested6 that the increases are political the twenty-first century. 1997). 2. World Oi1216, 17 (December 1995). rather than real, perhaps intended to dis If global demand for oil grows from 1995 3. Knapp, D. H. Oil Gas J. 93, 35-43 (25 December 1995). courage exploration for oil elsewhere in the to 2005 by 16 per cent, as it did from 1985 to 4. Laherrere, J. World Oil 215, 33 (January 1994). world or to help establish OPEC production 1995, demand for OPEC oil by the year 2005 5. Ivanhoe, L. F. World Oil 216, 77-88 (October 1995). quotas. will be 36 million barrels a day. OPEC cur 6. Campbell, C. J. The Golden Century of Oil 1950-2050 (Kluwer, Ifit is the case that the world's oil reserves rently produces 25 million barrels a day and Dordrechl, 1991). 7. Masters, C. D., Root, D. H. & Attanasi, E. D. Science 253, are indeed as great as 1,000 billion barrels, a has an estimated production capacity of 146-152 (1991). continuation of the current oil consumption about 29 million barrels a day, excluding 8. Hubbert, M. K. in Drilling and Production Practice, 7-25 rate of 26 billion barrels per year would Iraqi production. (Iraq's maximum produc- (American Petroleum Institute, Washington DC, 1956).