7 September 2004

The US Department’s of Energy (DOE) Energy Information Administration (EIA) has released a study that examined long-term supply scenarios for world petroleum. Under the most likely scenario—assuming a 2% annual growth rate for world’s oil demand and the mean value for the amount of oil reserves—the study predicts that petroleum production will reach its peak in 2037.

The study is a re-release of an oil supply prognosis originally published in July 2000, prompted in part by the increasing fuel prices in the USA. There has been no new information or developments that would significantly alter the year 2000 results, stated the EIA. The study is based on estimates of world’s oil resources by the US Geological Survey. The EIA estimates that the world’s growth in oil demand will be 1.9% through 2025.

According to the study, the critical event in world oil production will be when it reaches its peak. The following decline in oil production would leave some oil demand unsatisfied, likely leading to significant price increases.

The date when worldwide production of crude oil will peak depends on the rate of demand growth and assumed reserves. Twelve scenarios were examined in the study, for different oil demand growth rate (0-3%) and different oil reserves. The potential dates for the peak oil production ranged from 2021 to 2112.

Only conventionally reservoired crude oil reserves were analyzed in the study. Additional petroleum supply is expected from unconventional sources. Commercial production has already started from such sources as the Canadian tar sands and Venezuelan heavy oils.

While the EIA analysis is less alarming than some other reports, its authors noted that the results do not justify complacency about both supply- and demand-side research and development.

Source: US DOE (Long-Term World Oil Supply Scenarios)