20 controlled source electromagnetic resonance
Oil supply set to grow to
2030 with no peak evident
Above ground drivers, not the amount of
Of course looking further ahead, it is important to
below ground resources will be crucial
recognize that oil is a finite resource and that at some
stage supply could fail to meet demand on a consistent
factor to flow of oil supply in the coming basis. It is impossible to be precise about the timing
decades. Peter Jackson reports.
of this event, but given the pace at which demand has
increased in the past decade a pivot point may well be
F
ears about 'running out' of oil are recurrent. reached before the middle of this century. Much depends
At their strongest, they coincide with periods on key factors such as global economic growth, the
of high prices and tight supply-demand capability of the upstream industry, costs, government
balance. The latest such period of 'peak oil' policies on access and taxation, the evolution of
concerns became very evident from 2004, when strong oil renewable and alternative energy sources – particularly
demand ran up against capacity constraints. In contrast, for transportation – and the effect of climate change
IHS CERA’s reference case for global liquid productive issues on policies and regulations concerning the use of
capacity shows growth through 2030 to around 115 fossil fuels. However, there is time to prepare and to make
million barrels per day (mbd) and finds no evidence of a rational decisions to avoid being forced into short-term
peak in supply appearing before that time. approaches that may not resolve longer-term problems.
Hydrocarbon liquids – crude oil, condensate, extra
heavy oil, and natural gas liquids– are a finite resource;
Subsurface issues
but based on recent trends in exploration and appraisal Many studies of future oil supply examine subsurface
activity, there should be more than an adequate inventory issues and focus in particular on the scale of the
of physical resources available to increase supply to meet resource while giving limited consideration to technology,
anticipated levels of demand in this time frame. Post- economics, and geopolitics. Though belowground factors
2030 supply may well struggle to meet demand, but an are critical, it is aboveground factors that will dictate
undulating plateau rather than a dramatic peak will likely the ultimate shape of the supply curve. This IHS CERA
unfold. Moreover, if the 'peak demand' now evident in Report presents the main points in our current productive
the OECD countries is a precursor of later developments capacity outlook to 2030 and discusses the architecture
in the emerging markets, world demand itself could of future conventional and unconventional oil supply.
eventually move on to a different course. In order to provide a framework, the methodology and
foundations of the outlook are reviewed and the results
At the crossroads
of supporting studies on decline rates and giant fields are
In the short term the industry is at another crossroads included.
following the precipitous fall in demand in 2008–09 in In so doing, this report addresses the debate over
response to the onset of the recession. The oil price has 'peak oil'. There is much emotion involved in that
roughly halved from its peak of $147 per barrel in July debate. In our view much would be gained by lowering
2008, OPEC has recently cut production, OPEC spare the emotional level and instead shifting to a more
capacity has nearly tripled to 6.4 mbd, and the industry objective dialogue, based on a comparative view of data,
has slowed its pace of expansion. Early in 2009 IHS CERA methodology, and analyses. Our hope is that this paper
estimated that as much as 7.5mbd of new productive can contribute to such a discussion and exchange. Our
capacity could be at risk by 2014 if costs remained high hope is that out of such a dialogue will come a deeper
and oil prices hovered just below the cost of the marginal understanding of the world’s oil supply in the decades
barrel for two years. Since then the oil price has recovered ahead –a question crucial to the world’s overall future.
strongly to around $70–$80 per barrel, and some There are many areas of overlap between IHS CERA’s
confidence has returned. Even in these unpredictable view of future oil supply and other outlooks. Oil is a finite
times the industry has continued to invest and to build resource, and at some stage supply will begin to fall short
new productive capacity; indeed, Saudi Arabia recently of meeting demand on a consistent basis if there is no
brought onstream the giant Khurais field, which at break in the connection between economic growth and
plateau is expected to produce 1.2mbd. With sustained oil demand. The basic differences in opinion appear to
investment, a healthy cushion of spare capacity, and slow center on when this will happen and on what happens
to moderate post-recession economic growth, supply after the inflection point. The view that oil supply will
should not present major problems, at least in terms of plummet after the inflection point and oil will run out,
availability, in the short term. like the gasoline in an automobile, is misleading for the
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