Oil Production: Will the Peak Hold?

The theory of peak oil remains as contentious as ever, and by definition is unresolved. The supporting evidence starts with the bull market in crude prices in recent years, inspiring some to proclaim that global production is about as high as it ever will be.

The optimists counter that technology will save the day, through new discoveries that offset declining production from aging fields and recovering more oil from older wells that would otherwise run dry.

The jury is still out on the big picture, and it may remain so for years. In the meantime, there is no shortage of data to review. Case in point: the reported peak (so far) in global crude oil production came in May 2005 at 74.3 million barrels per day (bpd), as our chart below shows, according to numbers from the U.S. Energy Information Administration. In fact, there's been only three months when global production crossed above 74 million bpd, with the latest one coming last October at 74.1 million bpd, or just below the May 2005 summit.

click to enlarge

It's any one's guess if the old high will stand or not. And, of course, there are questions about the accuracy of EIA's numbers. In fact, there's skepticism that any database attempting to consolidate such an unwieldy beast as the world's oil production into one number. Nonetheless, everyone will be watching the updates, eager to declare victory for their side. All the more so considering how close last October's total was to the May 2005 apex. As we wrote this article, EIA's monthly production figures run through October 2007. The November report is coming soon.

Meantime, as the world ponders the supply side of the oil market, there's far less mystery on the demand side. In fact, it's the same old story: up, up and away.

Comments

[Greg Pinelli:]

While oil production and reserve data are almost as slippery as the substance they deal with the jury is most decidedly not out on peak oil....consider the folowing..
1. Anywhere from 4-12% decreased output from almost every major oil complex (the giants)...Burgen..Cant... to mention the North Sea and Alaska..which are old news
2. Delays..and more delays in bringing on any large new source anywhere..the list of wanna bes..gonna bes is too long to list..but I'll throw out Sakhalin and Kashagen for starters
3. Look at your own chart! In spite of $100 oil and growing demand we topped out in production in 2005...name another resource that can be got where the price triples in a few years and market suppliers aren't going 24/7 to bring out product??? It ISN'T there..
I'd also like to remind our readers that today's oil production figures include liquids that either aren't sustainable (tar sand oil) or were never part of supply numbers previously.

2008 Feb 07 07:58 PM

[erniem:]

In a way the entire notion that peak oil is fallacious is, uhh, shortsighted. The notion that production will increase due to tech that allows more production from declining fields is similar to the notion that beating a half dead horse will increase it's speed. It will. For a short period before it dies.

2008 Feb 08 10:25 AM