A report issued this week by a distingushed group of businesses (Arup, FirstGroup, Foster + Partners, Scottish and Southern Energy, Solarcentury, Stagecoach Group, Virgin Group, Yahoo), known as The Peak Oil Group) that sit on the newly-formed UK Industry Task Force on Peak Oil and Energy Security predicts that global oil production may top out as early as 2013. Other sources put the date at 2011. Gas experts have predicted peak natural gas five years later --by 2018.
In reviewing the report, what's interesting is that they don't even consider a Business-as-usual case (steady growth for oil) but only a “plateau”, “descent”, or “collapse” scenario for oil.
Pages 4-5 of the 41 page report called The Oil Crunch-Securing UK's Energy Future, summarize and explore 3 possible scenarios for the UK (and by definition other countries)
"The risk from premature peak oil can be thought of, globally, in terms of three qualitative scenarios. In a “plateau” scenario, like the one Shell foresees, global production will flatten around 2015 and remain on a plateau into the 2020s, propped up by expanding volumes of unconventional oil production because of the decline of conventional oil production.In a “descent” scenario, global production falls steadily as oilfield flows from newer projects fail to replace capacity declines from depletion in older existing fields.
In a “collapse” scenario, the steady fall of the “descent” scenario is steepened appreciably by a serial collapse of production in some – possibly many – of the aged supergiant and giant fields that provide so much global production today.
On balance, having reviewed the state of play in global oil production, the taskforce considers that the “descent” scenario is a highly probable global outcome. We also fear that a “collapse” scenario is possible.
The same three scenarios are also germane to a country-by-country analysis of oil supply, including imports. In the “collapse” scenario as it might apply to an individual oil-consuming nation, a major oil producing nation - or a group of them - decides that it has been overoptimistic in its assessment of reserves hitherto, that its domestic economic requirements for oil are growing, and it slows or even stops oil supply to nations it formerly exported to. In the UK’s case, the taskforce considers that the “descent” scenario is a highly probable outcome for future UK oil supply. As with the global situation, we also fear that the “collapse” scenario is possible.These risks may very well apply to gas as well as oil. Gazprom’s historical behaviour, and
recent events in the Caucasus, add to this concern."
Some nations may face an "energy famine"...so it's time to get pro-active.
China may be anticipating this descent scenario, and is using the current financial crisis to "lock in" 2 billion barrels of oil supplies over the next 20 years:
"As credit streams from troubled Western banks dry up in the financial crisis, Russian oil companies are negotiating multibillion-dollar loans from a more reliable source: the cash-rich Chinese government. Prime Minister Wen Jiabao of China, left, in Moscow on Tuesday for talks with Prime Minister Vladimir V. Putin. Under a proposed loans-for-oil deal, reported by Reuters on Monday, Russian oil companies would borrow $20 billion to $30 billion from Beijing. In return, they would export about two billion barrels of oil to China over the next 20 years."
Source: Russia Seeks to Trade Oil for Loans From China
See my directly related post from yesterday-What will the next economy look like, when this one crumbles? -Walter Derzko
Comments