Survey of Energy Resources 2007
This Commentary concludes that the world is rapidly approaching the end of the First Half of the Age of Oil, during which production grew, new fields were found and developed with the help of improved geological knowledge and advances in technology. The evidence suggests that the peak of world discovery was in the 1960s, meaning that the corresponding peak of production for 'Conventional Oil' is approaching. The world started using more than it found in 1981 and that gap has widened since. Granted, certain areas (e.g. Iraq) have been closed to exploration in recent years and that increased investment will have an impact, but the overall position is dictated by the underlying constraints of nature.
The evidence suggests that the Second Half of the Age of Oil is dawning and that it will be characterised by the decline of oil and all that depends on it. It is stressed that oil will not finally run out for very many years, if ever, but the onset of decline is inevitable, thanks to the resource limits of nature and the immutable physics of the reservoir. The timing of the peak currently attracts much debate, but is considered less important than the vision of the long decline that comes into view on its far side.
Given the central position of oil in the modern economy, the onset of decline threatens to be a time of great economic and geopolitical tension. It certainly means that governments are starting to address the issue seriously, and the present evaluation is offered as a reasonable starting point. The risk that it will prove to have under-estimated the levels of future oil supply is certainly less than that of entering the new world unprepared and with no appropriate policies. Certainly, countries that begin to address the issue and implement the necessary changes will find themselves enjoying huge advantages over those which continue to live in the past and have blind faith in unspecified technological solutions, or the ability of an open market to deliver.
J. Peter Gerling
Federal Institute for Geosciences and Natural Resources (BGR), Germany