The future of oil and the wedge of hope
10 Nov 2010
The future of oil depends a lot on what we can call “the wedge of hope.” That’s the name my wife came up with in a snap, when I showed her the graph below:
It’s from the International Energy Agency’s new World Energy Outlook, published yesterday, with the “wedge of hope” being the light blue triangle in the middle, representing “fields yet to be found.” (It doesn’t say “the wedge of hope” on the original graph, of course, or else my wife wouldn’t be very clever. I added that in myself.)
As I reported for National Geographic News (“Has the world already passed ‘peak oil’?”), the IEA said that the world may have passed the all-time peak of crude oil production, back in 2006. (That’s the dark blue hump forming the base of oil production.)
Whether we’ve already passed the peak of crude oil, the IEA says, depends on countries’ climate policies, the demand—and hence the price—of oil, and other factors. In their “New Policies Scenario,” which takes countries at their word that they’ll stick to the climate change commitments that they’ve made over the past couple of years for cutting greenhouse gas emissions.
Assuming they’ll stick to these commitments might be overly optimistic. But on the other hand, these pledges are fairly weak compared with what most scientists say is necessary to avoid severe climate change. So we’d better hope that they would at least stick to those commitments.
In any case, it’ll take probably another decade or so to see for sure whether we’ve passed the all-time peak.
After the peak in 2006, the IEA is now forecasting only a slight dip, and then a plateau for the next 25 years. But this plateau is strangely flat, suspiciously flat. It this plausible? How did they arrive at this?
One way of approaching it is to look at the wedge of hope. It starts off as a sliver, right now, and then gradually grows until, in 2035, it’s responsible for about 20 million barrels a day of production. However, it takes time to get new fields online—several years, at least—and it’s taking longer all the time, as the projects become more expensive and more technically difficult , and oftentimes more politically fraught.
Kashgan, a huge oil field in Kazakhstan’s part of the Caspian Sea, was discovered in 2000, and its first oil is expected by 2012, according to one site, Offshore Technology. That might be overly optimistic. But even if it pans out, that’s a 12-year lag between discovery and first oil, and then it would still take at least a couple of years for its production to ramp up to its peak.
I think the wedge of hope may have to be shifted into the future, about a decade. If so, it looks to me like there wouldn’t be a flat plateau for 25 years, but instead would be a decline of crude oil. It would be a real, clearly defined peak.
I’ll have more to say about other parts of the World Energy Report over the next several days. Stay tuned!