One question has vexed oil companies and consumers alike for the past few decades: when will we finally run out of oil? Some say the peak has already happened, others say it is fast approaching. But a recent analysis of global oil capacity by IHS Cambridge Energy Research Associates finds that overall petroleum supplies should grow though 2030, with no evidence of a peak of supply before then.
In the group’s report, The Future of Global Oil Supply: Understanding the Building Blocks, global oil productive capacity is expected to grow to as much as 115 million barrels per day through that period from the current level of 92 million barrels per day – a 25% increase.
Once the supply level reaches its peak, IHS predicts that oil will remain on an “undulating plateau” for several decades rather than falling off sharply.
“There is more than an adequate inventory of physical resources available to increase supply to meet anticipated levels of demand through 2030,” said Peter Jackson, IHS CERA senior director. “It would be easy to interpret the market and oil price trends from 2003 through 2009 in isolation to support the belief that a peak in global supply has passed or is imminent. But this only illustrates that the market continues to act as the shock absorber of major volatility.”
According to the energy and commodity data firm Platts, U.S. crude oil production for 2009 is on target to have its biggest one-year jump since 1970, averaging 5.268 million barrels per day through October. With the jump in the Gulf of Mexico, combined with the emergence of two other new oil-production trends, it appears the U.S. has a chance of at least maintaining oil output in the range of five million to six million barrels per day for some years to come, the firm said.
The peaking of global oil demand—rather than scale and deliverability of below-ground resources—could have a major impact on the flow of supply, according to IHS CERA’s analysis. “So much will happen between now and 2030 to affect demand, from changes in the automobile engine and the electric battery to changes in demographics and values,” Jackson added. “Peak demand may ultimately prove to be the main driver of long-term supply.”
Photo courtesy of SisPau Images under the Creative Commons License.