Saturday, December 29, 2007

Oil limits

Last month, I posted on an interesting WSJ article that discussed a plateau in oil production. In it, I said:

The idea of oil production reaching a "constant" level of output that it can't push through sounds suspiciously like a natural limit to me. The article references 100 million bpd as that limit several times. I'm not implying there's a natural law from which we can't deviate, but given the plethora of challenges currently found in oil discovery, drilling and funding, I wonder what happens north of 100 million bpd. Does each marginal barrel have an increasing incremental cost of extraction? Does it cost $150 per barrel to go from 100 million to 105 million bpd say?
Returning to this topic, I came across a great post a few days ago (yes, I know, but the holidays area time consuming endeavor) with a more in-depth look at the fact that "forecasters are converging on 100 million b/d" (h/t The Cost of Energy):
While the latest mainstream energy forecasts don't predict a peak or plateau, they do see little more than 100 million b/d of conventional oil output by 2030 -- the end of the forecast period. Both Exxon Mobil's new long-term outlook and the latest World Energy Outlook from the International Energy Agency (IEA) project conventional oil production of 105 million-106 million b/d against total liquids supply of 116 million b/d.
Both links are worth a read.

1 comment:

Nathan Schock said...

It's a fascinating topic and invites a question: how are we going to make up the pending shortfall in transportation fuel? I think this was largely left out of the recent discussion on the Energy Bill, but is something the bill (at least partially) addresses through the biofuels mandate and the increased CAFE standards.