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17--model Tier-1 avg infers global oil production exhausts in Year 2297

click to enlarge ... more peak oil charts @ my SA Instablog & website

Based on 17-model Tier-1 Avg:

Peak Oil: 94-mbd in 2023

Post-peak production Avg Decline Rate to 2050: 0.8%/yr

The year 50% of URR/EUR has been extracted: 2036

The year flow breaches below today's 88-mbd: 2038

The year we virtually run out of oil: 2297 (less than 7mbd & mostly BTL)

Global URR/EUR: 4,138-Gb (1,260-Gb consumed to 2010/12/31 incl 4Gb BTL)

Today's Global Depletion: 31% of URR (Net Depletion Rate: 1.1%/yr)



Aug 20 2011 delayed FreeVenue public release of May 20th guidance @ the MemberVenue ~ Today's monthly revision: (a) updates Tier-1 Outlooks: just our own Hutter Peak Scenario-2500; & (b) downgrades to Tier-2 the Outlooks by Pierre-René Bauquis & Nansen Saleri

 

Global All Liquids production is smashing the annual record set last year. A new quarterly record was set in Q1. Monthly flow, which had slipped to only 83.2 (Jan-2009) at the depth of the Recession, set a new mark of 88.3 in January and is on a pace to break the 90-mbd threshold in January 2013. See our World Production Records venue for higher resolution charts of current extraction.

But all new records are in jeopardy due to the present price spike ... one that could break the $131/barrel monthly high in July 2008. Historical analysis of Crude & Gasoline Price components & future target prices (out to 2035) can be viewed via our Gas Pump & Barrel Meter charts. See the chart comparing our projections with long term Crude Oil Price Forecasts by Deutsche Bank, EIA, IEA, IHS & OPEC. On the lighter side, this chart includes "to the moon Alice" forecasts by Charles Maxwell, Jeff Rubin, Michael Smith, Matt Simmons & theOilDrum.


Backgrounder

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 six decades of forecast studies. A year later we commenced to share these results at our website.

Back in 2005, the 7-model Average indicated a 94-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 2.3-mbd/yr: reduced from 41-mbd (Campbell 85 & CERA 126) in 2005 to today's 27-mbd (Laherrère 86 & CERA 113) spread.

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

 

The initial "original six" Depletion Scenarios chart appeared in 2004. A blended average of its expanded 13 Outlooks was added two years later and this neutral unique production profile has become the première indicator of future oil depletion. After reaching a membership of two dozen in 2008, TRENDLines decided that to maintain the integrity of the data it provides for international petroleum studies, only Tier-1 Scenarios would be added in the future whilst inferior and stale-dated Outlooks would be purged.



Today's Model Reviews:

The Tier-1 Presentation is unfortunately reduced by two stalwart members today. Failure by Pierre-René Bauquis to revise his 2008 Outlook forces a downgrade of his stale-dated projection to Tier-2. Upon annual review of Nansen Saleri's 2008 forecast, his effort was found to be much less robust than his peers, perhaps mainly based on conjecture and is downgraded to Tier-2 as well. TRENDLines looks forward to updates by both practitioners.


A favourite contribution to this 17-model Depletion study is of course my Peak Scenario-2500. The only depletion model that publishes updates monthly, its current revision reflects three factors: (a) decreased UDRO 2050 target to 4.7% (from 5.0%); (b) 6-Gb increase in URR; & (c) the projected annual New Capacity trend to Year 2100 increased to 4.1-mbd (from 4.0-mbd). For the eighth month PS-2500 is predicting Peak Demand (101-mbd in 2033) will pre-empt potential Peak Supply (121-mbd in 2047).

The model revealed in its early life that the onset of terminal production decline was going to be brought on by either (a) constraints in securing sufficient proven reserves at will on an annual basis, or (b) due to the magnitude of rising annual Underlying Decline Observed inevitably surpassing the annual New Capacity installations. The current pegged dates by PS-2500 for these two events are 2055 & 2048 respectively. The earliest of these two factors had been establishing the first year of terminal production decline. Status quo has been truncated.

As with most depletion models, the long-term Supply growth rate assumed continuation of the 1-mbd/yr pace in play since 1970. However, a sea change occurred in July 2010 when my newly implemented Peak Demand module began to detect a waning growth rate in long-term Demand. The module's feedback serves to explain the inability of Consumption to mop up the growing global surplus capacity in the system (6-mbd) since the end of the 2009 G-20 Recessions.

At this time it appears Demand will peak in 2033. Post-peak production decline will average 0.8% during the first two decades. Conversely, when the Peak Demand module is deactivated, PS-2500 projects a potential Supply Peak of 121-mbd in 2047.

In tandem with the Barrel Meter module, Peak Scenario-2500 warns policy makers to target their strategies for transition away from gasoline/diesel transportation fuels at the 2029 time frame when Crude Price faces a permanent breach of a definitive Oil-cost/GDP ratio threshold that historically threatens domestic light vehicle manufacturing and sales.

The model gauges the pace of Underlying Decline Rate Observed @ 3.4% in 2011 and destined to rise to 4.7% by 2050. Its cyclical nature and projected performance can be viewed in a 1970-2050 (UDRO) chart. The model estimates 79-mbd of the 119-mbd of All Liquids Capacity added since 1970 addressed Underlying Decline Observed; and a further 94-mbd is required to attain its 103-mbd capacity target by 2035: 14 to increase present capacity and 80-mbd will address future UDO.

Visit our PS-2500 venue for lots more details and charts on non-conventional dynamics, Underlying Decline Observed & the inherent flaws (and myths) associated with the McPeakster fraternity.


Further to the 17 Tier-1 models, we regularly track 17 Tier-2 & Hail Mary outlooks. For discussion and posterity purposes, 4 Regular Conventional Oil projections & 11 Invalidated Outlooks are presented as well. But, it is the Average of the 17 Tier-1 models that offers up the very best guidance, such as:

Future Extraction Rates:

2008 85.5

mbd

2009 84.4 -
2010 86.8 -
2011 87.8

(pending)

2023 94 Peak Year & Peak Rate
2033 91 extraction passes 2 trillion
2036 89 50% Extraction of URR
2038 88 first year flow is less than today
2050 77 milestone
2052 75 today's 1268-Gb of proved reserves exhausted
2073 56 extraction passes 3 trillion barrels
2087 44 flow is 1/2 of today
2100 36 milestone
2111 31 100 yrs down the road...
2200 14 flows limited to X-Heavy, GTL, CTL & BTL
2300 7 flows limited to renewable BTL

Estimated Ultimate Recoverable Resource (EUR-URR)

The Avg URR/EUR Estimate for the 17 Tier-1 practitioners is 4,138-Gb when we deduct from the nominal average the volume attributable to renewable BTL (biofuels-to-liquid) as calculated by the Hutter Peak Scenario-2500 model. It estimates a cumulative 546-Gb BTL will have been produced thru to Year 2300. This net economic resource number compares remarkably well to the 3,991-Gb Avg derived from the 22-estimates within our similar URR Study with its slightly different mix of practitioners.

TRENDLines calculates Global Past Consumption (to 2010/12/31) to be 1,260-Gb for All Liquids of which 1,100-Gb is attributable to Regular Conventional Oil (light sweet crude) & 4-Gb to BTL.

Exhaustion of the first trillion barrels of All Liquids reserves occurred in 2002. Via the 17-model avg, the second trillion will have passed by Year 2033; then the third by Year 2073 (excl BTL). Annual flow will finally breach the 7-mbd threshold in Year 2297 ... signifying the virtual exhaustion of fossil fuels. From that juncture, only BTL sourced renewable liquids along with the last vestiges of CTL provide Supply.

Of the Tier-1 model contributors, the lowest URR tally is the 2,560-Gb inferred in the PFC Energy Outlook. Highest is the Hutter Peak Scenario-2500 with its 8.0-Tb URR.



Peak Date & Peak Rate

The 2023 94-mbd PEAK indicated by the 17-model Avg rests atop a backdrop Plateau (defined as within 2-mbd of Peak Rate) running from 2017 to 2031. As such, even minor Peak Rate variances of the Avg can result in significant shifts of the PEAK DATE. Six years ago our first exercise in averaging, using seven models, indicated a 94-mbd PEAK in 2020. The multi-model "average" for PEAK DATE in our Depletion Scenarios' updates since 2005 has ranged from 2013 to 2030; and we have reported PEAK RATE "averages" running from 91 to 96-mbd.

Today's Tier-1 models' Peak Date ranges from 2011 by Jean Laherrère to Year 2036 by IEA ... a span of 25 years.

May's forecasts of Peak Rate range from 86-mbd by Jean Laherrère to CERA's 113-mbd ... a difference of 27-mbd.

We are humbled with this project's contribution to the narrowing of the spread by an incredible 2.3-mbd/yr. Today's high-to-low spread of 27-mbd has been diminished from 41 (Campbell 85 & CERA 126) just six years ago. While the pessimists have only upped their forecasts by a mere 0.2-mbd/yr in that time frame, the optimists have in turn been dropping by 2.2-mbd/yr. Trivia alert: if this unholy methodology continues, by 2024 the camps should merge with both agreeing to a peak rate of "88"!


Depletion

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. Using the 17-model avg, and excluding 4-Gb accrued BTL, the 1,256-Gb of consumed petroleum divided by the 4,138-Gb avg URR reveals global Depletion of 31% (to 2010/12/31) ... the passing of one third of URR is near at hand.

The global Gross Depletion Rate (32-Gb annually extracted liquids as a percentage of global URR) is 0.8%/yr today. If measured as a percentage of remaining resource (2,882-Gb), the Net Depletion Rate is a higher 1.1%/yr.

The consensus 2023 PEAK occurs at 41% Depletion. The 50% crossover of the inferred URR avg will occur in 2036.


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 Nov/2007, Peak Scenario-2500 has uniquely provided regular monthly reporting of Global UDO/UDRO status. Its (charted) 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 by year-end 2009. The UDRO rises & falls with surges coinciding with the American economic Recessions. Below, the PS-2500 finding is compared to short/medium term practitioner estimates of present/future All Liquids UDRO:

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

2.0% - IEA (2010-2035 avg)

2.1% - CERA (2009-2030 avg)

3.4% - Hutter Peak Scenario-2500 (2011, rising to 4.7% 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% - Total (2009)

5.0% - Deutsche Bank (5% in 2009, rising to 8% by 2030 ... 6.7% avg)

5.2% - Schlumberger (2009-2030 avg)

5.25% - Sadad al Husseini (2009)

6.0% - PFC (by 2030)

7.0% - UK Energy Research Centre (2009)

9.0% - consensus at theOilDrum & PeakOildotcom (2009)


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 17-model avg declines at 0.8% per annum measured from the 2023 Peak to Year 2050. Alternatively, when calculated from PEAK to the 10-mbd exhaustion threshold in Year 2242, it will average 1.0% annually. This is quite manageable for policy makers and stakeholders when compared to the most aggressive rate mathematically possible (5.2%) as illustrated in the hypothetical Worst Case Scenario.

Among our Tier-1 practitioners, predictions of First Year Production Decline range from Year 2012 by Jean Laherrère to Year 2037 by IEA.

The Avg Production Decline Rates to exhaustion range from the Hutter PS-2500's 0.8%/yr to 3.7%/yr by 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 2011 (87.8-mbd), this projection depicts the Average Decline Rate (5.2%) required mathematically to completely exhaust this very conservative Resource figure.

Significantly, this exercise reveals that half (44) of this year's 88-mbd All Liquids production rate will still be flowing in Year 2034, and in fact won't dip below 10-mbd until Year 2052. After 2057, All Liquids flow is limited to sourcing via BTL (biofuels-to-liquid). A post-peak production decline rate higher than 5.2% "strands URR" ... and that phrase is an oxymoron. Ignore all pundits that suggest a decline rate for post-peak production of over 5.2% in their musings. And, please read their alarmist TEOTWAWKI forecasts with these hard numbers in mind...



original article:  trendlines.ca/free/peakoil/Scenarios/sce...