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Freddy Hutter, TrendLines Research
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As a data analyst, Freddy Hutter of Trendlines Research provides guidance in chart format on the specialties of peak oil, realty bubbles, baseline GDP projections and election predictions. Virtually each day an update is published to the website's MemberVenue. All charts are made publicly... More
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  • Avg of 18 Peak Oil forecasts says global extraction to rise 11% (to 95-mbd) by 2023  2 comments
    Apr 7, 2010 1:40 PM

    click chart to enlarge ... more peak oil charts at our website
    Below, this month's revision:  (a) updates Tier-1 Outlooks by Pierre-René Bauquis & our own
    Hutter Peak Scenario 2200;  (b) downgrades Outlooks by Kjell Aleklett & Colin Campbell from Tier-1 to the Invalidated Scenarios Archive;  (c) updates the BP Outlook in Tier-2;  (d) introduces the ITPOES Outlook in the Tier-2 category;  (e) downgrades the Jeff Rubin Outlook from Tier-2 to the Invalidated Scenarios Archive.

    2010 global production is on a pace that exceeds the 85.4-mbd annual record set in 2008.  Monthly flow has been on a steady rebound since bottoming at 83.1-mbd in January 2009 (also the worst month of the USA Recession).  The sector is poised for a new quarterly record in 2010Q4 and the monthly record should fall in January 2011.  See the Monthly Report for higher resolution charts of current extraction.  Historical analysis of Crude & Gasoline Price components & future target prices (out to 2035) can be viewed via our Gas Pump & Barrel Meter charts.  A new chart compares our projections with long term Crude Oil Price Forecasts by Deutsche Bank, EIA, IEA, Jeff Rubin, Matt Simmons & theOilDrum.


    In 1972, the Club of Rome attempted to shock stakeholders and policy makers with its Limits to Growth study forecast of All Liquids Peak Oil:  117-mbd in 1995.  Their attempt at awareness that natural resources are finite and in jeopardy with a growing global population was underscored in 1974 with M K Hubbert's similar prediction:  111-mbd in 1995 (excl NGL, deep sea, polar, Orinoco & tar sands).

    Because OPEC manipulation invalidated both these projections, Colin Campbell attempted to update the long term prospects for All Liquids.  The Irish geologist stunned many when in 1989 he declared that All Liquids flow (65.5mbd) would never again re-attain its 1979 pre-crisis Peak of 67-mbd (see all 3 charted).  Well, he was very wrong (86mbd today!).  This episode made it quite clear that the uncertainty & price volatility caused by such pessimistic reports (even by well-intentioned professionals) required addressing by the energy sector.

    In that regard, we saw OECD's IEA, USA's EIA, OPEC and major IOCs step forward with their own annual & bi-annual long term projections in an attempt to set the record straight and stabilize the marketplace.  It didn't happen.  As the ranks of McPeaksters were swelled by a growing element from the lunatic fringe, their well-intentioned message was hijacked and discourse deteriorated to the realm of economic and social collapse as the world runs out of oil.  As the rhetoric escalated, we thought it would be constructive to provide a comparative platform for these opposing views of the future.

    TrendLines Research has been analysing the world's very best All Liquids long term production profiles (and the not-so-good ones) since 2003.  Our database includes five decades of forecast studies.  A year later we began publishing results to our website.

    Back in 2006, the 13-model Avg indicated a 95-mbd PEAK in 2020.  Our not-so-hidden agenda has been to provide a venue where collaboration and comparison encourages a merging of the pessimistic/optimistic camps.  After screening hundreds of scenario proposals, we are humbled with this project's contribution to the narrowing of the spread by an incredible 3-mbd/yr:  reduced from 48-mbd (Campbell 80 & CERA 128) in 2004 to today's 30-mbd (Husseini 86 & EIA-Sweetnam 116) spread.

    Interested in who had the best forecast ten years ago?  Scroll to our Top-16 Vintage Predictions Scoreboard.

    Today's Model Reviews:

    In his third upward revision in three years, Pierre-René Bauquis has increased the Peak Rate of his 2020 target by almost 2-mbd to a baseline adjusted 102-mbd.

    A favourite member of this 18-model Depletion study is of course my Peak Scenario 2200.  The only depletion model that posts updates monthly, the current revision reflects only one factor:  (a) 65-Gb decrease (RCC & Kerogen) in our URR estimate.  A new "layer" chart has been introduced to give a second perspective of its components.

    The model concludes the onset of terminal production decline can be brought on by either (a) constraints in securing sufficient proven reserves, or (b) due to rising Underlying Decline Observed surpassing the trend of annual New Capacity installations.  PS-2200 pegs dates on these two events:  2051 & 2031 ... the latter establishing its 2030 Peak.

    PS-2200 & Colin Campbell's Depletion Model are the only models with ongoing analysis of narrowly defined Regular Conventional Crude (light sweet oil).  The departure in their views (see RCC chart) represents the rift between the optimistic & pessimistic camps.  RCC peaked @ 68-mbd in 2005, and has been declining at a rapid 2.5%.  Whereas Campbell foresees this rate continuing unimpeded 'til 2030, Hutter's position is that the rapid decline was Recession inspired and EOR/Reserve development activities will keep RCC flow in virtual plateau (-0.4%/yr) during the next two decades starting this year.  Whether or not this year's RCC flow deteriorates or moderates makes 2010 the watershed year in foreshadowing All Liquids future path.

    The Peak Scenario 2200 March Update elaborates on its bold hypothesis that Underlying Decline Rate Observed (UDRO) rises and falls with the American Recessions.  It contends UDRO has just demonstrated this phenomenon for a sixth time since 1970.  On cue, its most recent loss cycle peaked at 3.1% in 2008, and will trough at 2.5% in 2012, before climbing to 3.7% in a probable 2017 Recession.  The model estimates 79-mbd of Capacity was added since 1970 to address Underlying Decline Observed, and a further 59-Gb will be required for that purpose by 2030.  The latter figure compares to IEA WEO-2008's estimated 45-Gb to 2030 & CERA's 2009 finding of a 31-mbd requirement over the next 21 years.

    The rippled profile results from the harmonics of the underlying 7 unique flow streams.  Visit our PS-2200 venue for lots more details and charts on URR linearization, non-conventional dynamics, Underlying Decline and the inherent flaws (and myths) incorporated within McPeakster modeling.

    As mentioned in the intro, 2010 global production is on a pace to set new quarterly and annual records.  To alleviate the skew caused by projections that have declared 2008 as Peak Year, the integrity of the average is being protected by downgrading the Outlooks by Kjell Aleklett & Colin Campbell from Tier-1 to the Invalidated Scenarios Archive.  Similarly, there's downgrade of the Jeff Rubin Outlook from Tier-2 to the Invalidated Scenarios Archive.

    Over the years, we've been supportive of the IPCC Reports but have warned that the underlying science assumptions have at times been hijacked by political operatives within the scientific community assisting the UN.  Two of own efforts have been to present charting that exposes the junk science behind Gore-type rhetoric with respect to rapid sea level rise & the real available fossil fuel resource available for energy projections.

    Another troubling event with respect to the discussion of peak oil occurred last month that mirrors such agenda-driven adventures.  The UK's ITPOES (Industry Taskforce on Peak Oil Energy Security) presented what we feel to be a very political conclusions that defy the science within its own supportive documents.

    Because of the high publicity it received, the second report of the ITPOES is introduced today to our Tier-2 presentation.  It is relegated to Tier-2 because it chose not to include the projections of its own underlying forecast document (the Chris Skrebowski scenario in our February update) and instead suggests to the UK Gov't that "the world is imminently running out of oil".

    In our February update, Skrebowski virtually admitted that the inherent fault in his bottom-up model is that it was in effect only a "worst case scenario" because it only recognized firm announced megaprojects.  It used a premise that the energy sector is unlikely to install any future facilities after its short horizon.  At ASPO-2005 his model was predicting a 2007 peak.  His model necessitated annual upward revisions as new projects were made public.  We applauded Chris (and other McPeaksters) who have in recent months adopted our own practice of applying a reasonable factor for future new capacity based on recent norms.

    In the Skrebowski case, he now somewhat tackles this issue by assuming some new commissions will take place past 2015 ... but only to 2020.  A great first step, eh!  In the summary chart (pg 23 - figure 3.5 of his submission to ITPOES) he illustrates 2015-2020 production as an 89.5-mbd plateau.

    Conversely, ITPOES describes his submission in its (pg 6) Executive Summary:  "The net flow rate data shows that increases in extraction will be slowing down in 2011-13 and dropping thereafter"  It goes on to present in its Taskforce View (chapter 6) a production projection chart (pg 39 fig 6.6 - footnoted to represent Skrebowski findings in Chapter 3) that ignores his 2014 92-mbd peak and instead imparts its own 2013 91-mbd production cap followed by an immediate 1% decline resulting in a mere 63-mbd rate by 2050.

    ITPOES disturbingly misrepresents the new Skrebowski plateau methodology and presents its own unfounded dire forecast.  Agenda-based distortions of scientific data do not further the discussion ... instead these actions call upon stakeholders and policy makers to question their credibility and integrity.

    BP has finally updated its stale dated 2004 projection with a long term outlook amending its peak to 99-mbd in 2030, up from 90 in 2015.  Elevation from Tier-2 status to Tier-1 is pending greater detail.

    With respect to the oil study by Kuwait University's College of Engineering & Petroleum (Nashawi et al) released this month, it joins a select few studies mentioned in the Footnotes below that unfortunately do not approach the definition of All Liquids.  Its 2008 production of 72-mbd includes RCC + some deep sea + some X-Heavy in Venezuela, but is substantially short of All Liquids 85-mbd tally for the year.

    Further to the 18 Tier-1 models, 16 Tier-2 & Hail Mary outlooks are tracked regularly.  For discussion and posterity purposes, 4 Regular Conventional Crude projections & 11 Invalidated Outlooks are presented as well.  But, it is the Average of the 18 Tier-1 models that reveals the very best guidance, such as:

    Future Extraction Rates:

    2008: 85.4-mbd
    2009: 84.2
    2010: 85.7  (pending)
    2023:  95  (Peak Year & Peak Rate)
    2035: 92  (50% Extraction of URR)
    2045: 85  (first year with flow less than today)
    2050: 82
    2060: 72  (fifty yrs from today)
    2075: 60 
    ( 9.2-billion peak of global population)
    2100: 40
    2110: 34  (100 yrs from today)
    2200: 10   (flows limited to GTL, CTL & renewable BTL)
    2300:  4-mbd  (flows limited to GTL, CTL & renewable BTL)

    Estimated Ultimate Recoverable Resource (EUR-URR)

    The Avg URR/EUR Estimate for the Tier-1 practitioners is 4,121-Gb when we deduct from the nominal average the volume attributable to renewable BTL (biofuels-to-liquid) as calculated by the Hutter PS-2200 model.  It attributes a cumulative 512-Gb for BTL thru to Year 2300.  This compares quite well to the 3,785-Gb Avg derived from our URR Study with its slightly different mix of providers.

    TrendLines calculates Global Past Extraction (to 2009/12/31) to be 1229-Gb for All Liquids, of which 1077-Gb is attributable to Regular Conventional Crude (light sweet) & 4-Gb to BTL.

    Exhaustion of the first trillion barrels of All Liquids reserves occurred in 2002.  Via the 18-model avg, the second trillion will have passed by Year 2033; then the third by Year 2068 & fourth in Year 2119 (excl BTL).  Annual flow will finally breach the 5-mbd threshold in Year 2292 as it approaches exhaustion.

    Of the Tier-1 model contributors, the lowest URR tally is the 2,439-Gb used by Chris Skrebowski.  The high is the EIA-Sweetnam hybrid with its 9.0-Tb URR.

    Peak Date & Peak Rate

    The 2023 95-mbd PEAK indicated by the 18-model Avg rests atop a backdrop Plateau (defined as within 2-mbd of Peak Rate) running from 2018 to 2033.  As such, even minor Peak Rate variances of the Avg can result in significant shifts of the PEAK DATE.  Our first exercise in averaging the models (13) indicated a 95-mbd PEAK in 2020.  Depletion Scenarios' Updates since 2006 have highlighted PEAK DATES ranging from 2013 to 2030; and we have reported PEAK RATES running from 91 to 96-mbd.

    Today's Tier-1 model Peak Dates range from Sadad Al Husseini's 2011 to the 2090 hybrid projection by EIA-Sweetnam.

    March's forecasts of Peak Rate range from 86-mbd by Sadad Al Husseini to EIA-Sweetnam's 115.6-mbd.

    We are humbled with this project's contribution to the narrowing of the spread by an incredible 3-mbd/yr.  Today's spread of 30-mbd has diminished from 48 just five years ago.  Generally, the pessimists have been upward revising their forecasts an average 1-mbd/yr, while the optimists have in turn been dropping by 2-mbd/yr.  (Trivia Alert:  this unholy methodology indicates that by 2020 the camps should merge with both agreeing to a Peak Rate of "96")


    A well, field or province depletes from the first day it is drilled.  The total crude extracted from a field thus far divided by its original volume is its status of Depletion.  Excluding 4-Gb accrued BTL, the 1,225-Gb of consumed petroleum divided by the 4,121-Gb Avg URR reveals global Depletion of 30% (to 2009/12/31).

    The global Gross Depletion Rate (31-Gb annually extracted liquids as a percentage of global URR) is 0.8%/yr today.  If measured as a percentage of remaining resource (2,896-Gb), the Net Depletion Rate is a higher 1.1%/yr.

    Based on the 18-model Avg, the world's resource of 4,121-Gb is 30% depleted.  The 2023 PEAK occurs at 41% Depletion.  The 50% crossover of the URR Avg will occur in 2035.

    Underlying Decline Rate Observed (UDRO)

    The IEA WEO-2008 calculates that the Natural Underlying Decline Rate is 5% in post-peak Regular Conventional Crude fields and as much as 15% in non-conventional post-peak Deep Sea fields, for a weighted avg of 9%.  A Producer's EOR activities can improve extraction results and diminish the loss factor.  After EOR activity, IEA calculates the loss to be 6.7% for Conventional & Deep Sea fields.

    I call this net absolute figure, more applicable to our depletion studies, Underlying Decline Observed (UDO).  It is expressed in millions of barrels per day (mbd) per annum.  More commonly, analysis of RCC or All Liquids is conducted in percentage terms per time interval - appropriately the Underlying Decline Rate Observed (UDRO).  To maintain a production plateau, Production Capacity must be incrementally increased each year to match UDO loss.  And, when the New Capacity trend no longer exceeds the UDO trend, Terminal Production Decline will commence.

    Since November 2007, Peak Scenario 2200 has uniquely provided regular monthly reporting of Global UDO/UDRO status.  Its long term analysis found that over the last 40 years, UDRO has averaged 2.7% annually.  This means that of the 119-mbd of new facilities built since 1970, 79 served to address UDO & only 40-mbd raised Extraction Capacity from 51 in 1969 to 91-mbd today.  Below, PS-2200 is compared to short term practitioner estimates of present/future All Liquids UDRO:

       1.5% - CERA (2009-2030 Avg)

       1.9% - Adam Brandt (2007 - sole peer-reviewed contribution)

       1.9% - IEA (2008-2030 Avg)

       2.9% - Freddy Hutter's Peak Scenario 2200 - March/2010 (4.5% by 2050)

       4.1% - Matt Simmons (2009-2030 Avg)

       4.2% - EIA (2009-2030 Avg)

       4.2% - Jeff Rubin (2009)

       4.5% - OPEC (2008)

       4.7% - Chris Skrebowski (2010)

       5.0% - Deutsche Bank (2009, rising to 8% by 2030)

       5.0% - Total (2009)

       5.2% - Schlumberger (2009-2030 Avg)

       5.25% - Sadad al Husseini (2009)

       7.0% - UK Energy Research Centre (2009)

       9.0% - consensus at theOilDrum & PeakOildotcom (2009)

    CERA's 2009 study has determined that flow from currently in-place Capacity will deteriorate by only 31-mbd in the next 21 years.  In its recent WEO-2008, IEA presumes 45-mbd of new Capacity is required to sustain a plateau 'til 2030.  My own PS-2200 projects a figure of 57-mbd is more probable.

    Post-Peak Decline

    The absolute volume of decreased annual production in a post-peak well, field or petroleum provinces is its Decline;  often quoted in percentage terms as an annual Decline Rate.  The TrendLines 18-model Avg declines at 0.5% per annum measured from the 2023 Peak to Year 2050.  Alternatively, when calculated from PEAK to the 10-mbd exhaustion threshold in Year 2196, it will average 1.3% annually.  Compare this to the most aggressive 4.9% rate mathematically possible for the hypothetical Worst Case Scenario.

    Among our Tier-1 practitioners, predictions of First Year Production Decline range from Year 2012 by Sadad Al Husseini to Year 2091 by EIA.

    The Avg Decline Rates range from Hutter's 0.5%/yr to 4.2%/yr shared by both EU/WETO & Chris Skrebowski.

    Worst Case Scenario

    This hypothetical projection was introduced in Feb/2008 to put in perspective the ludicrous & persistent "running out of oil" comments by McDoomer & Lunatic Fringe elements within the McPeakster fraternity!

    Using the lowest recognized estimate of All Liquids URR/EUR (2021-Gb by EWG/LBST 2008), and assuming things collapse after  2010 (85.7-mbd), this projection depicts the Average Decline Rate (4.9%) required mathematically to completely exhaust this very conservative Resource figure.

    Significantly, this exercise reveals that half (42.5) of this year's 85-mbd All Liquids production rate will still be flowing in Year 2034, and in fact won't dip below 10-mbd until Year 2054.  Finally, All Liquids exhausts in 2083.  A post-peak production decline rate higher than 4.9% "strands URR" ... and that phrase is an oxymoron.  Ignore all pundits that suggest a decline rate of post-peak production of over 4.9% in their musings.  And, please read their alarmist TEOTWAWKI forecasts with these hard numbers in mind...

    TrendLines Vintage Predictions Scoreboard

    Practitioner2008 Forecast (actual 85.4)2009 Forecast (actual 84.2)2010 Forecast (pending 86.0)URR (Gb)3-yr Error Score
    Jean Laherrère '9785.0-mbd85.5-mbd86.0-mbd27001.7mbd
    Jean Laherrère '9986.086.086.527502.9
    EIA 199586.087.188.422735.9
    Peter Odell Y2k88.289.590.7600012.8
    Michael Lynch '9688.090.092.0227314.4
    EIA 199690.091.092.1227317.5
    EIA Y2k89.691.493.2300018.6
    EIA 199989.891.593.2300018.9
    Colin Campbell '9992.693.091.7262521.7
    IEA 199591.593.395.2230024.4
    EIA 199891.393.495.5300024.6
    IEA Y2k91.293.695.8191925.0
    EIA 199792.694.195.6300026.7
    IEA 199693.395.797.1230030.5
    IEA 199896.297.198.0230035.7
    Colin Campbell '8936.735.634.51575148.8

    Post OPEC-Crisis forecasting of an All Liquids PEAK commenced in 1989.  Our archive of pre-2001 projections reveals that the Jean Laherrère 1997 Outlook (France) is the current title holder for best overall Vintage Predictions, by merits of its least cumulative errors over the three year span.

    Second place goes to the Jean Laherrère 1999 Outlook & third place to the EIA 1995 Int'l Energy Outlook (NYSE:USA).

    We also add 3 honourable mentions to the Jean Laherrère 1997 Outlook for its best forecast for all three of the monitored years ... all of 'em being accurate to within 1-mbd!

    Disclosure: no positions
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Comments (2)
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  • GhostOfSpec
    , contributor
    Comments (167) | Send Message
    "At ASPO-2005 his model was predicting a 2007 peak."


    As I posted elsewhere, you really mischaracterized what he actually said and just cherry pick from his presentation. His presentation:


    Chris knows that things are in constant flux and carefully qualifies his statements. But very accurately predicted that there would be problems meeting demand in 2008. And he very accurately predicted that there would be demand destruction in response to to the difficultly meeting demand.


    From one of his slides:
    --------------‘Peak Oil’ in 2008?
    *Whatever approach we use the answer seems to be ‘Peak’ in 2008
    *Before that, if all goes to plan, the world can, possibly, meet likely demand
    *After that it is hard to see how demand can be met without demand destruction
    *But, there are no guarantees


    Indeed . . . 2008 suffered a massive shortfall and a spike of prices to $147/barrel. Then huge demand destruction occurred.


    He gives an entire slide on what can adjust his views . . . the first two happened (massive recession and demand destruction)
    ------------Delaying ‘Peak Oil’
    *Economic slowdown/recession
    *Demand destruction via high prices
    *Systems overperforming
    *Peace in Iraq
    *Middle East opening to investment
    *But, accelerating projects produces cost inflation rather than more oil


    But you prefer to latch onto one random sentence. I guess when you own analysis stinks, you need to mischaracterize the work of professionals to make yourself feel better, eh?


    "Agenda-based distortions of scientific data do not further the discussion ..."
    LOL! Now THAT is rich.
    8 Apr 2010, 02:44 AM Reply Like
  • Freddy Hutter, TrendLines R...
    , contributor
    Comments (3628) | Send Message
    Author’s reply » Chris Skrebowski routinely underestimated future annual New Capacity and overestimated Underlying Decline Observed. His first forecast (May 2005) of Peak Oil was quite specific: "it will happen within 31 months". Well, December 2007 came and went! So did 2008. And 2009.


    2010 is on pace to set a new annual record. A new quarterly production record will be set in Q2. Most instructional is the sector's 6.6 million barrels/day of surplus capacity. In March 2010, Skrebowski admitted extraction will rise another 8% and pushed his forecast of Peak Oil to 2014. Chris is one of the best practitioners, but his former methodology had an inherent "worst case scenario" fault due to the limited visible horizon (5 yrs) of new facilities. He has recognized this and has continually improved his model.


    Generally, McPeaksters started these annual declarations in 1989. They do not further the discussion by these silly announcements. Governments, stakeholders & policy makers have all dismissed this cult and their social engineering agenda.
    8 Apr 2010, 03:46 PM Reply Like
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