Peak oil: Facts converge with theory
The theories for predicting timing of peak oil, despite using different methodologies, have arrived at remarkably similar conclusions. Whether peak oil occurred in 2006 or will occur in 2010, what is certain is a shoot-up in prices, given the enormous appetite for energy in China and India, say RAM VENKATACHALAM and SHANMUGANATHAN N.
Over the last couple of years, this column has elaborated on the different theories that predict the timing of peak oil.
It has also analysed other influencing factors such as world oil discovery peaking in the 1960s, the low net energy returns from unconventional sources like tar sands and the dilapidated status of the exploration/drilling industry that could impede ad ditional production in the foreseeable future.
With crude hitting an all-time high of $80 a barrel on NYMEX yesterday, this is probably a good time to summarise the discussion and to see whether the actual numbers have been in line with the forecasts made.
Given in the Table is a summary of the four theories that could be used to estimate the timing of peak oil.
All four methodologies show a remarkable confluence in their predictions regarding the timing of peak oil.
So why is there a difference in timing between the four approaches? Firstly, predicting peak oil is not an exact science and there are various factors (below ground reserves, unverifiable production data and production policies of national oil companies) that are open to very subjective interpretations. More importantly, the definition of ‘oil’ itself is different in the four methodologies. Hubbert Linearisation is primarily concerned with conventional crude while the Giant Oil Fields study and the Mega Projects database add unconventional sources such as tar sands and natural gas liquids in their forecasts.
This difference is however not significant from a long-term perspective.
Conventional crude still accounts for the bulk of our supplies (more than 85 per cent) and a peaking of conventional crude would imply that the peak for the entire basket would soon follow.
It is indeed remarkable that in spite of the above issues and differences, the range of peak oil as determined by the above four studies varies only by 5 years.
The interesting point to note is that each of the above four approaches has taken an independent and different methodology in estimating peak oil and yet, all four have come to similar conclusions.
More interestingly, Chris Skrebowski started his ‘Mega Projects Database’ study to disprove the peak oil theory and after completing the study, became a convert to the peak oil camp.
Read the full article at: The Hindu Business Line
