Trends in Oil Supply and Demand, the Potential for Peaking of Conventional Oil Production, and Possible Mitigation Options A Summary Report of the Workshop (2006) / Chapter Skim
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Workshop Summary
Workshop Summary
Pages 1-22
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. The interest in peak oil reflects concern that a peaking of global conventional oil production could have extraordinary implications: namely, oil shortages, rapidly rising oil prices and inflation, economic downturns and recessions, andpossiblycatastrophic economic disruptions.
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government policy. Following on the recent analyses conducted for oil peaking, most of the presentations focused on the supply of conventional oil and possible alternatives.
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Innovation guided by market signals will expand and redefine energy resourcesfor example, substitutes will be found as various forms of energy become too expensive.6 It was noted at some point during the workshop that the term "concernist" might be used instead of "pessimist," indicating that there is concern about what a divergence between the demand for and supply of oil would mean for the economies and well-being of the world's population. As noted in several presentations, over the next two to three decades, OPEC will need to increase production of conventional oil substantially to meet forecast growth in world oil demand.
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There were some questions about whether IEA had done a peak oil analysis and how it had done an oil field by oil field analysis to estimate reserves. IEA believes the world has sufficient resources/reserves to meet demand until 2030 and does not foresee any global oil peaking before that year.
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There was also some question about how the USGS establishes its probability estimates. It takes a statistical approach, which is appropriate in the face of uncertainty in estimating oil resources and what proportion of them will become economically viable reserves in the future.
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Jeremy Gilbert cited a study by the Association for the Study of Peak Oil (ASPO) suggesting that global production of conventional oil will reach a maximum within about 5 years.
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It is likely that any peaking of natural gas production would occur after petroleum production peaks. Also, it should be noted, as is done in the presentation on natural gas to liquids in the session on mitigation, that one option is to convert natural gas into liquid fuels, such as diesel fuel.
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Can we be confident that OPEC nations, such as Saudi Arabia, will have the production capacity to meet growing world oil demand as non-OPEC producers reach a plateau or start a decline in production? In particular, Matt Simmons expressed concern that Saudi oil production might be nearing its peak and might not be able to meet the expectations of many analysts for future increases.
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the global availability of conventional and unconventional oil that can be ultimately recovered and used; and (6) the extent to which oil field extensions can be expected to contribute to the oil reserve base.
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substitute liquid fuels from heavy oil/oil sands, coal, and remote natural gas. A scenario analysis of an hypothesized worldwide "crash" mitigation program utilizing related commercial and near-commercial technologies arrived at the following most optimistic possible outcomes: · Waiting until world oil production peaks before embarking on a crash mitigation program that deploys all options simultaneously would leave the world with a significant liquid fuel deficit for more than two decades.
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In starting his heavy oil presentation, Bob Heinemann noted that increasing oil production over the next 10 to 20 years by a sizeable amount to meet projected demand will 9 A plug-in hybrid is a variation of the traditional hybrid vehicle, which incorporates an engine, battery storage, and an electric drive propulsion system. A hybrid vehicle can operate at times on battery power alone, when it does not need the engine, and provides better fuel economy than a conventional vehicle.
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During discussions, it was unclear 10Assuming a value of 5.8 million BTUs per barrel of oil produced and 1 million BTUs per thousand cubic feet (Mcf) of natural gas, an EPR of about 2.7 units of energy output is produced per unit of natural gas energy used.
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However, using methanol as a fuel would require a major infrastructure transition from gasoline and diesel fuel, the primary fuels now used for transportation. In his natural gas-to-liquids presentation, Emil Jacobs noted that natural gas demand is increasing worldwide and that there are extensive reserves of natural gas worldwide, with about 70 percent of conventional natural gas reserves residing in the Middle East and Asia.
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It offers the potential of producing liquid fuels with low greenhouse gas emissions, but it is not clear at this point how a substantial biofuels industry will arise. Who will invest in and promote cellulose conversion technology and other advanced biofuels options?
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· The environmental consequences of increasing use of unconventional oil sources could be serious. Understanding these and other key issues is urgent because of the time lags for adaptation.
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For example, what additions are being made to oil reserves each year, how much investment is required to increase recovery factors, how much oil is being used, what would a plateau in non-OPEC oil production mean, and what will be required to meet growing oil demand for the next few decades? What do the probabilities of reserve estimates imply, and what are the consequences if the higher estimates of reserves (which have a lower probability)
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This study could incorporate the following considerations: What would happen when a peak in global conventional oil production occurs? How can the peak oil challenge be communicated to the public and politicians?
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Are sufficient human resources and capital available for investments to meet global oil demand and avoid serious economic impacts? What should scientists/engineers do next to help inform policy makers and politicians about the issue?
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. · A study could be conducted on the impacts on developing countries of oil price volatility, potential peaking, and international competition for oil.
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