Abstract

When we call oil and gas fossil fuels, we admit that they were formed in the geological past and are therefore subject to depletion. Oil provides 40% of traded energy, 90% of transport fuel, and is critical for agriculture. The oil industry has great knowledge and experience. It has searched the world with sophisticated technology, always looking for the biggest and best prospects. Extrapolation of the discovery trend of the past, therefore, offers the best means of forecasting future discovery and production. Since oil has to be found before it can be produced, it follows that production has to mirror discovery after a time-lag. World discovery on this basis peaked in 1964, meaning that the corresponding peak of production is now imminent. The consensus of published reports of the total endowment of ‘conventional oil’ is just under 2000 × 10⁹ barrels. To this has to be added bitumen, heavy oils, deepwater oil, polar oil and natural gas liquids, bringing the total to about 2700 × 10⁹ bbl: Experience to-date shows that the peak in any country comes at, or before, the midpoint of depletion, which respects both the physics of the reservoir and the fact that most of the oil in any country occurs in a few large fields. Accordingly, we can expect global peak to come around 2010, followed not long afterwards by the peak or plateau of gas. The world must now prepare for the transition to declining oil and gas supply. Market economics that inevitably encourage rapid depletion have done immense damage by persuading governments to ignore resource constraints. In the past, geologists had a mission to identify the resources of the world for the benefit of mankind, and indeed they have still more to do in identifying what remains to be found in ever smaller and more difficult fields. But a far more important new mission is to explain just how finite the resources are, so that governments may adopt policies to cut demand, for which there is great scope, and bring on renewable energies as fast as possible. Failure to recognize the consequences of depletion leads to international tensions with countries vying with each other for access to the remaining oil supply, half of which lies in just five Middle East countries.