Front Page, Wall Street Journal - World May Hit Oil Production "Ceiling" By 2012 - Energy Bulletin

[hatrack]

A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day. Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012. This rough limit -- which two senior industry officials recently pegged at about 100 million barrels a day -- is well short of global demand projections over the next few decades. Current production is about 85 million barrels a day.

The world certainly won't run out of oil any time soon. And plenty of energy experts expect sky-high prices to hasten the development of alternative fuels and improve energy efficiency. But evidence is mounting that crude-oil production may plateau before those innovations arrive on a large scale. That could set the stage for a period marked by energy shortages, high prices and bare-knuckled competition for fuel.

The current debate represents a significant twist on an older, often-derided notion known as the peak-oil theory. Traditional peak-oil theorists, many of whom are industry outsiders or retired geologists, have argued that global oil production will soon peak and enter an irreversible decline because nearly half the available oil in the world has been pumped. They've been proved wrong so often that their theory has become debased.

The new adherents -- who range from senior Western oil-company executives to current and former officials of the major world exporting countries -- don't believe the global oil tank is at the half-empty point. But they share the belief that a global production ceiling is coming for other reasons: restricted access to oil fields, spiraling costs and increasingly complex oil-field geology. This will create a global production plateau, not a peak, they contend, with oil output remaining relatively constant rather than rising or falling.

EDIT

ASPO-USA Commentaries appended:

UPDATE (Nov 19)
Dave Cohen of ASPO-USA writes:
Although it seems that we "peakists" can all retire now that the WSJ has posited the idea of a hard limit on oil production by 2012, our work is not quite done yet. As a proponent of a "debased" theory which is "fringe", there is still work to do, to wit:

1) Show that even 90 million barrels/day is almost certainly unattainable, not the 100 million barrels quoted by oil company executives. Everyone can see the new projects (including EOR projects) coming on-stream in the next 5 years. Given a global decline rate of about 4%, it is not rocket science to do the the math and see what the future holds in the best case.

2) Work to discredit (debase?) bogus solutions like corn ethanol or Coal/Gas-to-Liquids or Oil Shale while promoting good alternatives e.g. an extensive rail system in the US, virtual commuting, more fuel efficient cars, wind and solar to augment the electric power grid to meet coming demand for plug-in hybrids (PHEVs) etc.

EDIT

More at:

http://www.energybulletin.net/37382.html

[bananas]

1. Full article at wsj.com - free, no registration needed

Full article: http://online.wsj.com/article/SB119543677899797558.html?mod=hps_us_whats_news
Also, lots of comments at the WSJ energy blog: http://blogs.wsj.com/energy/2007/11/19/to-peak-or-not-to-peak/

edit to add cute graph from the article:

[IDemo]

2. Surprising to see SAIC so pessimistic in the graph

As a major US government space/military contractor, they would have everything to gain with a continuation of the status quo.

[Strelnikov_]

4. SAIC was the contractor who produced the 'Hirsh Report' for the DOE n/t

[fed-up]

3. way to go MSM-only 5 years warning laying it right at the Dems feet nt

[Strelnikov_]

5. "They've been proved wrong so often that their theory has become debased."

Yea, Hubbert was off by, what, 0 years in '70.

They did miss the worldwide peak, though. Predictions clustered around 2010, but it seems we are at peak oil now, 3 years early.

Totally debunked.