current high oil prices, the debate has intensified and probably shifted
significantly from “if’ there is actually going to be a global oil peak to
“when” there will be one.
Wall Street should get concerned. Energy consultants John S. Herold,
Inc. recently compared the stated reserves of the world’s leading oil companies
with their quoted discoveries and production levels, and predicted
that the seven largest oil companies will all begin seeing production declines
within four years. Deutsche Bank reported recently that global oil
production could peak in 2014.
In 2005, The Guardian newspaper in London wrote about a U.S. government
report on oil shale and unconventional oil supplies that seems to
indicate concern among some government officials. The Guardian story
quoted the report:
World oil reserves are being depleted three times as fast as they are
being discovered. Oil is being produced from past discoveries, but
the reserves are not being fully replaced. Remaining oil reserves of
individual oil companies must continue to shrink. The disparity
between increasing production and declining discoveries can only
have one outcome: a practical supply limit will be reached and future
supply to meet conventional oil demand will not be available....
Although there is no agreement about the date that world
oil production will peak, forecasts presented by USGS geologist
Les Magoon, the Oil & Gas Journal, and others expect the peak
will occur between 2003 and 2020. What is notable ... is that
none extend beyond the year 2020, suggesting that the world may
be facing shortfalls much sooner than expected.18
I find it more useful to approach this global peak debate from a different
angle, by looking at different producing regions, or oilfields, and
when they are likely to peak individually. We know that by the same
Hubbert analysis, the U.S. production, both onshore and offshore, has
peaked. Similar patterns of peak discovery and production have been
found throughout all the world’s main oilfields, including in the North
Sea. The first North Sea discovery was in 1969, discoveries peaked in
1973, and the British portion of the basin passed its production peak in
1999. The British portion is now in serious decline, while production
from the Norwegian portion has leveled off.
Chris Skrebowski, editor of Petroleum Review, a monthly magazine
published by the Energy Institute in London, says that conventional oil
38 THE END OF OIL