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Chart of the Day: 20-model avg says Peak Oil @ 93-mbd in 2022

click to enlarge - more Peak Oil & Price charts at website
 Tier-1 Scenarios:  This month's Tier-1 revision updates Outlooks by Chris Skrebowski & our own Hutter Peak Scenario 2200

Based on 20-model Avg:

          Peak Oil:  93-mbd in 2022

          Post-Peak Production Avg Decline Rate to 2050:  0.7%/yr  ('til 2050)

          The year 50% of URR/EUR has been extracted:  2031

          The year flow is under today's 85-mbd:  2040

          The year we run out of oil:  2287  (less than 5mbd)

          Global URR/EUR:  3,902-Gb  (1,225-Gb consumed to 2009/12/31 ~ excl 4Gb BTL)

          Global Depletion:  31% of URR  (Net Rate:  1.2%/yr)

Estimated Ultimate Recoverable Resource (EUR-URR)

The Avg URR/EUR Estimate for the Tier-1 practitioners is 4,414-Gb.  Albeit impossible to estimate the volume of renewable BTL (biofuels-to-liquid) included in the Avg, we can infer some guidance available from the Hutter PS-2200:  it attributes a cumulative 512-Gb for BTL thru to Year 2300.  Deducting the the taint of BTL indicates a preferred net URR/EUR of 3,902-Gb.  This figure is quite close 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 & 4-Gb to BTL.

Exhaustion of the first trillion barrels of All Liquids reserves occurred in 2002.  Via the 20-model avg, the second trillion will have passed by Year 2033; then the third by 2069 & fourth in 2153 (incl BTL).  Annual flow will finally breach the 5-mbd threshold in Year 2287 as it approaches exhaustion.

Of the model contributors, the lowest tally is the 2,425-Gb used by both Kjell Aleklett & Colin Campbell.  The high is the EIA-Sweetnam hybrid with its 9.0-Tb URR.


Peak Date & Peak Rate

The 2022 93-mbd PEAK indicated by the 20-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.  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 Colin Campbell & Kjell Aleklett's stern position that 2008 will prove to be Peak, to the 2090 hybrid projection by EIA-Sweetnam.

February's forecasts of Peak Rate range from the joint position by Colin Campbell & Kjell Aleklett that the 85.4-mbd (2008) will never be surpassed, to EIA's 115.6-mbd (2090).

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")


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.  Excluding 4-Gb accrued BTL, the 1,225-Gb of consumed petroleum divided by the 3.902-Gb Avg URR reveals global Depletion of 31% (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 (2,677-Gb), the Net Depletion Rate is a higher 1.2%/yr.

Based on the 20-model Avg, the 2022 PEAK occurs at 42% Depletion.  The 50% crossover of the URR Avg will occur in 2031.


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 - Feb/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 58-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 20-model Avg declines at 0.7% per annum measured from the 2022 Peak to Year 2050.  Alternatively, when calculated from PEAK to the 10-mbd exhaustion threshold in Year 2182, it will average 1.4% annually.  Compare this to the most aggressive 4.8% rate possible for the hypothetical Worst Case Scenario.

Among our Tier-1 practitioners, predictions of First Year Production Decline range from Year 2009 by Colin Campbell & Kjell Aleklett to Year 2091 by EIA.

The Avg Decline Rates range from Hutter's 0.5%/yr to 4.2%/yr by 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 (85.6-mbd), this projection depicts the Average Decline Rate (4.8%) 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 4.8% "strands URR" ... and that phrase is an oxymoron.  Ignore all pundits that suggest a decline rate of post-peak production of over 4.8% in their musings.  And, please read their alarmist TEOTWAWKI forecasts with these hard numbers in mind...


TrendLines Vintage Predictions Scoreboard

Practitioner 2008 Forecast (actual 85.4) 2009 Forecast (actual 84.2) 2010 Forecast (pending 86.0) URR (Gb) 3-yr Error Score
Jean Laherrère '97 85.0-mbd 85.5-mbd 86.0-mbd 2700 1.7mbd
Jean Laherrère '99 86.0 86.0 86.5 2750 2.9
EIA 1995 86.0 87.1 88.4 2273 5.9
Peter Odell Y2k 88.2 89.5 90.7 6000 12.8
Michael Lynch '96 88.0 90.0 92.0 2273 14.4
EIA 1996 90.0 91.0 92.1 2273 17.5
EIA Y2k 89.6 91.4 93.2 3000 18.6
EIA 1999 89.8 91.5 93.2 3000 18.9
Colin Campbell '99 92.6 93.0 91.7 2625 21.7
IEA 1995 91.5 93.3 95.2 2300 24.4
EIA 1998 91.3 93.4 95.5 3000 24.6
IEA Y2k 91.2 93.6 95.8 1919 25.0
EIA 1997 92.6 94.1 95.6 3000 26.7
IEA 1996 93.3 95.7 97.1 2300 30.5
IEA 1998 96.2 97.1 98.0 2300 35.7
Colin Campbell '89 36.7 35.6 34.5 1575 148.8

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!  (rev 9.1231)


The global annual production record of 85.4-mbd was set in 2008.  Monthly flow has been on the rebound since bottoming at 83-mbd in January 2009.  The sector is poised for a new quarterly record in 2010Q4, with the monthly record falling in January 2011.  See the Monthly Report for higher resolution charts of current extraction plus our historical analysis of Crude & Gasoline Price components & future crude price.  The horizon of our Barrel Meter has been enhanced to illustrate 1yr, 5yr, 10yr & 25yr price targets; and 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 (85mbd 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 if would be constructive to provide a platform for these opposing views of the future.

TrendLines Research has been charting the world's very best All Liquids long term production profiles since 2004.  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 (Aleklett/Campbell 85.4 & EIA 115.6) spread.

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


Model Reviews:

The founder of bottom-up methodology was Chris Skrebowski and his Megaprojects analysis.  A victim of its purism, annual upward revisions were required to update its Megaproject horizon.  It and similar efforts at theOilDrum were worst case scenarios that assumed that the oil sector would not add to announced-to-date installations.  Both now admit that the prospect of the industry to stop exploration and development is highly improbable; and have adopted the methodology of our own PS-2200 whereby the recent New Capacity trend is projected forward.  Unlike PS-2200's extrapolation of the trend rate out to 2050, Skrebowski continues new projects 'til 2020 at which time all work mysteriously stops.

Another premise haunting the Skrebowski Outlook is its position that the Underlying Decline Rate Observed started at zero in 2002 and increased incrementally each year ... 4.7% in 2009.  It makes no reference to the 51-mbd of megaprojects built from 1970 to 2002 over and above that needed to increase Demand.

In the end, his 2010 update establishes Peak @ 92-mbd in 2014 ... up 1-mbd and one year.


A favourite member of this 20-model Depletion study is of course my Peak Scenario 2200.  The only depletion model that posts updates monthly, the current revision reflects two factors: (a) 40-Gb increase (RCC up, Kerogen down) in our URR estimate & (b) forecast allowance for Underlying Decline Rate Observed (UDRO) in 2050 decreased to 4. 5% per annum.

Cumulatively, these changes had no effect on the Peak.  Highlights include:

          The Peak:  100-mbd in 20300.5%  ('til 2050)

The onset of Terminal Decline can be brought on by either constraints in securing proven reserves, or due to rising Underlying Decline 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 2.4%.  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 (-0.6%/yr) during the next two decades starting this year.  Whether this year's RCC flow deteriorates or moderates makes 2010 the watershed year in foreshadowing All Liquids future path.

The Peak Scenario 2200 February Update continues the bold assumption that Underlying Decline Rate Observed (UDRO) rises and falls with the American Recessions, and had in fact demonstrated this phenomenon for a sixth time since 1970.  Its last 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 58-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 incorporated within McPeakster modeling.


Further to the 20 Tier-1 models, 16 Tier-2 & Hail Mary outlooks are tracked regularly.  For discussion and posterity purposes, 4 Regular Conventional Crude projections & 8 Invalidated Outlooks are presented as well.  But, it is the Average of the 20 Tier-1 models that reveals the very best guidance, such as:

Future Extraction Rates:

2008: 85.4-mbd
2009: 84.1
2010: 85.6  (pending)
2022:  93  (Peak Year & Peak Rate)
2031: 91  (50% Extraction of URR)
2040: 85  (first year with flow less than today)
2050: 77
2060: 68  (fifty yrs from today)
2075: 55 
( 9.2-billion peak of global population)
2100: 36
2110: 31  (100 yrs from today)
2200:  9   (flows limited to GTL, CTL & renewable BTL)
2300:  4-mbd  (flows limited to GTL, CTL & renewable BTL)


          Post-Peak Production Decline Rate: 

        Worldwide Surplus Capacity:  6.6-mbd (exhausts in 2023)

          The year flow breaches 2010 levels:  2052

          URR/EUR:  

          Depletion of URR: 

          The year 50% of URR consumed:

          The year oil

       Underlying Decline Rate Observed for 2010 All Liquids -  2.9%

(excl BTL) runs out:  2344  210416%      Annual Gross Depletion Rate:  0.4%  (Net:  0.5%)7,624-Gb  (consumed to 2009/12/31:  1229-Gb incl 4Gb BTL)

Disclosure: (no positions)