Oil Supply Analysis by Bill Butler

Bill Butler moderates The Suncor Energy and Canadian Oil Sands Resources Group on Yahoo. The group is primarily composed of members that probably should be classified as peak oilers, which I know will turn many of you off. I hope you will read his analysis and take it for what its worth. This week he presented his analysis of our oil supply. It is very simplistic, but probably as accurate as most of the more analytical studies. There certainly will be projects added and perhaps a few not included in the database, but it takes an average 7 years from the announcement of a project until it is brought online. Oil companies are becoming more active in exploration, but that also takes a lot of time. It certainly should give you pause for thought.

Chris Skrebowski's Megaprojects report (and here), a tabulation of new oil production projects includes everything from 40,000 bbl/day on up. ...

The 3.5 to 5 million bbl/day per year of new oil production coming online sounds encouraging until you take depletion of old fields into account. For the purpose of the following calculations we will assume that everything goes according to Skrebowski's tables - everything comes online on time, there will be no hurricanes, no political/military problems, etc. (If we are going to get into trouble with everything going right, then having things go wrong certainly isn't going to help things - and Murphy's Law is still very much alive.)

Historically, oil production from existing fields has decreased at about 4% per year due to depletion. If we take 4% of current world oil production of 84.5 million barrels per year (current EIA data - presumably all liquids), then we would need 3.38 million barrels of new production per year just for total production to stay constant. If we assume world population is increasing at 1% per year then we would need 5% of 84.5 = 4.23 million barrels of new production per year just to keep oil production per capita even. On this basis, if you use Skrebowski's everything-goes-right numbers, the peak in oil production per capita is in 2009, and it's downhill after that.