The formation of Crude Most geologists view crude oil and natural gas as the product of compression and heating of ancient organic materials over geological time. Planktons High temperature High pressure Flourish during the last Global Warming (Jurassic Age 300 million to 200 million yrs ago). Dead body sank to ocean floor and become thick sediments. Oil
USA claims worlds first oil well Titusville Pennsylvania 1859
Ghawar, Saudi: The world’s largest oil field Ghawar was discovered in 1948 and put on stream in 1951. Estimated to have 71 billion barrels of proven reserves. Ghawar
Peak oil is…..
the point at which we can no longer increase the amount of oil we pump. From that moment the entire globe will have an ever decreasing supply of oil.
Why is oil supply peaking, how do we know?
M King Hubbert
- 2 discoveries
Fields peak when ½ the oil has been extracted.
There is a time lag between discovery of an oil field and that field’s peak production of about 25-40 years.
Peak to Peak 40 years US-48
Peak to Peak 30 years Egypt
Peak to Peak 27 years Russia
Peak to Peak 25 years United Kingdom
World Oil Discovery Trend Historical Data ExxonMobil
Where is it? Regular Conventional Oil
2004 was a key year for depletion
All spare capacity used. OPEC has recently suspended their quota system.
But also in 2004:
Refinery spare capacity nearly disappeared
Sulphur removal capacity did disappear
Tankers were costly and in short supply
‘ Peak Oil’ in 2007/08?
Whatever approach we use the answer seems to be ‘Peak’ in 2007/2008
Before that, if all goes to plan, the world can, possibly, meet likely demand
After that it is hard to see how demand can be met without demand destruction
But, there are no guarantees
Various Predictions of World Oil Production Peaking
Skrebowski: After 2007
Bakhtiari: Before 2010
Douglas - Westwood: As early as 2016
EIA (Nominal case): 2016
Shell: After 2020
Campbell: Around 2010
USGS 95% probability 2032
USGS 5% probability 2012
WORLD OIL DEMAND
We currently require 84 mbd of oil, and that will rise by around 2-3 mbd by the end of the year. Demand is growing ~2 % per year.