Two Years Remission for Financial Bad Conduct
PEAK
Chris Skrebowski
aspo-usa.com/2009proceedings/Skrebowski_Oct_12_2009.pdf
My conclusions at very best
•Supply will start to tighten the moment economic recovery occurs and prices will rise
•Much depends on Opec’s use of its spare capacity of about 5mn b/d
•Much depends on Opec’s oil price ambitions
•Rapid oil price rises would threaten economic recovery
•Oil supply will most likely peak in 2014/15 at under 92 million barrels/day
•There could be supply shortfalls in winter before Peak
•Oil supply in international trade will peak earlier than the oil production peak
Peak Oil matters because ‘The flows matter’
•Consumers need delivery flows
•Reserves are only useful as flows
•Peak oil is when flows can’t meet the demand
•The oil industry is slow moving and predictable
•Flows can be geologically constrained –e.g., the North Sea
•Flows can be politically constrained –e.g., Russia, Saudi Arabia
•Flows can be physically constrained –e.g., Nigeria
•Flows can be skills constrained –e.g., lack of experienced engineers
•Flows can be capital constrained –e.g., Mexico, Venezuela
•Many talk of reserves and ignore flows
•Others talk about access and ignore flows
•Peak Oil flows will occur no later than 2015.
Latest BP statistics (2009) show Peaks are already happening
•OECD production peaked in 1997and has now declined by 2.5 million b/d (-11.5%)
•Non-Opec, non-FSU production peaked in 2002 Has now declined by 1.50 million b/d (-4.24%)
•Total non-Opec production decrease in 2008 -613,000 b/d
•North America/Mexico peaked in 1997 now down 602,000 b/d (-4.2%)
•North Sea -UK/Norway/Denmark peaked in 2000now declined by 1.87 million b/d (29.4%)
•Around 28 significant producers in decline (accounting for over40mn b/d)
•About 50% of global production from decliners
•Can the other 50% outrun depletion and meet demand? For how long?
