A field-by-field analysis of global oil production and development indicates the world is not running out of energy in the near- or medium-term, with a boost in unconventional supplies -- condensate, gas-to-liquids (GTL), natural gas liquids (NGL) and oil sands -- expanding hydrocarbon capacity by as much as 25% over the next decade, according to a forecast by Cambridge Energy Research Associates (CERA). In North America, U.S. capacity is expected to decline, but Canada will gain with the expansion of its unconventional sources.
"We see no evidence to suggest a peak before 2020, nor do we see a transparent and technically sound analysis from another source that justifies belief in an imminent peak," said Robert Esser, CERA's director of Global Oil and Gas Resources. Esser testified Wednesday before a House Energy and Air Quality Subcommittee. "It will be a number of decades into this century before we get to an inflexion point that will herald the arrival of an 'undulating plateau' of global hydrocarbon production capacity."
CERA projects world oil production capacity has the potential to rise to as much as 108 million bbl/d from the current 87 million bbl/d by 2015, with more growth in capacity continuing after that point. "A detailed new audit of our own analysis and the enormous scale of reserve upgrades in existing fields...contradicts those who believe that peak oil is imminent," Esser testified.
To evaluate assertions that the failure of global exploration to replace production in recent years is evidence of a peak, CERA and parent company IHS reviewed detailed data, which indicated output has been more than replaced by exploration and upgrades of previous discoveries. Between 1995 and 2003, they found global production of 236 billion bbl was more than compensated for by exploration success of adding 144 billion bbl and field upgrades of 175 billion bbl.
The biggest gains appear to be from non-traditional sources, which are expected to expand to about 35% of total capacity in 2015, compared with 10% in 1990. The primary unconventional sources, many of which CERA expects to be considered traditional by 2015, include the following:
CERA noted the major risks with its outlook are not below ground, but above ground, and in the immediate term, there will be shortages of qualified people, rigs, yard space and raw materials, along with rising operating costs.
For more information on Esser's testimony, visit www.cera.com.
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