Posted on Wednesday, October 24th, 2007
(Podcast) There are only 1200 days to go until global oil production reaches its all-time peak, according to the editor of the Petroleum Review. Worse, says Chris Skrebowski, the chances are the crisis will break even sooner.
Skrebowski made the claim at the ASPO conference in Houston last week on the basis of the latest results from his Megaprojects model, which he explains in an interview with Lastoilshock.com. Unlike other peak oil forecasters Skrebowski does not extrapolate future production from estimated reserves or resources, but balances the additional supplies expected from fields that are currently being developed against the decline in existing production capacity, which the International Energy Agency estimates at about 4% per year. By this measure, peak output will arrive in 2011, and from then on supply will fall increasingly short of predicted demand.
This approach is possible because on average it takes the oil industry over 6 years to turn a newly-discovered field into one that actually produces oil, so the maximum additional oil production capacity that is likely to come on stream is fairly well known for about 6 years in advance. However, in an industry plagued by shortages of skilled staff and rampant cost inflation, projects are often delayed, and fields sometimes produce less than expected.
Skrebowski’s forecast chimes with the IEA’s Medium Term Oil Market Report issued in July, but their conclusions are very different. The IEA describes its predicted shortfall in 2012 as a “supply crunch”, while Skrebowski talks of a “historical discontinuity”, or peak oil.
NB Some listeners have reported problems with lastoilshock.com podcasts using Quicktime, but they seem to play perfectly well on RealPlayer and Windows Media Player.