Cambridge Energy Research Associates (CERA) headed by the sometimes controversial chairman Daniel Yergin, released a new analysis of future oil supplies. They claim that rather than oil peaking and then rapidly declining the correct Model for Post-2030 Oil Supply is an undulating plateau.
In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by CERA finds that the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponents -- and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future. ....
Global production will eventually follow an “undulating plateau” for one or more decades before declining slowly. The global production profile will not be a simple logistic or bell curve postulated by geologist M. King Hubbert, but it will be asymmetrical – with the slope of decline more gradual and not mirroring the rapid rate of increase -- and strongly skewed past the geometric peak. It will be an undulating plateau that may well last for decades.
During the plateau period in later decades, according to the CERA analysis, demand growth will likely no longer be largely met by growth in available, commercially exploitable natural oil supplies. Non-traditional or unconventional liquid fuels such as production from heavy oil sands, gas-related liquids (condensate and natural gas liquids), gas-to-liquids (GTL), and coal-to-liquids (CTL) will need to fill the gap.
I tend to believe in the "undulating plateau" theory with some modifications. Four of my questions relating to this theory are: 1) when does this happen? 2) what fuels will be in the mix to supply the shortfall of fossil fuels? 3) What will be the price of fuels at that time? and 4) Does it really matter what the proper theory is?
Rather than the "undulating plateau" starting in 2030, I believe that, within a few years if not already, we will enter a period when energy prices continue to increase at a rate much higher than inflation and that this will continue until our renewable energy resources can reverse this trend. We have reached the peak of "conventional oil" and the shortfall is being made up by recovering oil from more expensive sources that in many cases is more expensive to refine.
Not to mention the global warming that will occur unless legislation is implemented worldwide requiring power plants to be built that discharge much, much less carbon than current plants do.
Energy conservation is the most effective means of reducing growth of energy needs. However we still have to build more renewable energy plants, more nuclear plants and accelerate the use of IGCC coal plants with carbon capture. No one source will keep up with demand even with the most drastic energy conservation programs. One of the main reasons for this is that developing countries must be allowed to use more energy to bring their standard of living to a higher level. China and India cannot do this with renewable energy alone, some of the smaller countries might be able to.