CERA Reports: Peak Oil Theory Based on Faulty Analysis

There is a useful new Cambridge Energy Research Associates, Inc. [CERA] report out strongly critical of peak oil theory. Instead, the report's authors argue, technology advances mean we are set to see a near-doubling in oil supply by mid-century, and then an "undulating plateau", before decline begins toward the end of this century.

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But as CERA Chairman Daniel Yergin points out, technology innovation could make even this muted scenario too pessimistic:

"This is the fifth time that the world is said to be running out of oil," says CERA Chairman Daniel Yergin. "Each time -- whether it was the 'gasoline famine' at the end of WWI or the 'permanent shortage' of the 1970s -- technology and the opening of new frontier areas has banished the specter of decline. There's no reason to think that technology is finished this time."

Comments

[Scott Teresi]

Whether or not this graph is optimistic on production (Peak Oil advocates like Campbell seem to be pessimistic; oil companies tend to be quite optimistic), what may be left out of this graph is demand. If demand is increasing much faster than the upward slope of supply, then we may be dealing with many of the effects of nearing "peak oil" (scarcity, high prices) sooner than the graph would communicate.

[galewhitaker]

I believe that you are correct about technology helping the oil companys generate more oil and the the oil supply will last a long time into the future. The aspect of the problem that you seem to be ignoring is that all the methods that are being used (e.g. deep water) to find and retrieve more oil are very expensive. I think the world will be a very different place if the price of oil is over $100/barrel. Obviously the oil supply last a long time if no one can afford to use it.

[Edmund OShea]

Discoveries of Oil Peaked in the early 1960's. If there were any North Sea or North Slope size fields left we would have found them with all the Great Technology by now. Ghawar the largest field on earth which has been in production since the early 1950's has a water injection of 5 million bbls of water a day to get 4.5 million bbls a day out. The large recent find in the Gulf of Mexico is estimated to be 15 billion bbls, that is 1/2 year of world consumption. Why are we looking for oil 250 miles out at sea if there is so much available? We are consuming 4 bbls for every 1 bbl we have been finding since 1999. This technology better start producing or we will be sitting in the dark warming ourselves by burning Yergin's book, which was also fiction like this report. Edmund