Guest Editorial: Peak Oil Theory Could Distort Energy Policy and Debate
Authors: Jackson Peter M. 
Published: February 2015

The "peak oil" debate continues to rage without any obvious progress. In essence, the peak oil lobby suggests, as it has been doing unsuccessfully for many years, that global production will soon reach a peak and then decline rapidly thereafter with dire global consequences. The "market view" of Cambridge Energy Research Assocs. (CERA), based on 2 decades of research, is also not a view of unlimited resources, but concludes that a plateau rather than a peak will occur—although not tomorrow—and that supply will not "run dry" soon thereafter. We hold that above-ground factors will play the major role in dictating the end of the age of oil.

To summarize several primary conclusions:Based on a detailed bottom-up approach, CERA sees no evidence of a peak before 2030. Global production eventually will follow an undulating plateau for one or more decades before declining slowly. Global resources, including both conventional and unconventional oil, are adequate to support strong production growth and a period on an undulating plateau.Despite his valuable contribution, M. King Hubbert's methodology falls down because it does not consider likely resource growth, application of new technology, basic commercial factors, or the impact of geopolitics on production. His approach does not work in all cases—including on the United States itself—and cannot reliably model a global production outlook. For example, production in 2005 in the contiguous 48 states in the United States was 66% higher than Hubbert projected.The debate should now move toward a better understanding of the key drivers of production, including the scale of global resources and the likely production outlook, which form the core of current disagreements and confusion. At the same time, there is a need to identify the signposts that will herald the onset of the inevitable slowdown of production growth and to ensure that policymakers outside the energy community have a clear understanding of possible outcomes and risks.

We respect the urgency and seriousness with which some with whom we disagree put their case. However, the peak oil theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues. Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges of delivering liquid fuels to meet the needs of growing economies. This is a very important debate, and as such it deserves a rational and measured discourse.

Resource Availability

Our analysis finds that the remaining global oil resource base is actually 3.7 trillion bbl—three times as large as the 1.2 trillion bbl estimated by peak oil theory proponents.

The global resource base of conventional and unconventional oil, including both historical production of 1.1 trillion bbl and yet-to-be-produced resources, is 4.8 trillion bbl and is likely to grow. This analysis of global reserves and resources includes both conventional and unconventional oil, as well as estimates of both field-upgrade potential and yet-to-be-found resources. CERA's global liquids supply outlook is not one of endless abundance. Based on a range of potential scenarios and field-by-field analysis, world oil production will not peak before 2030, but the idea of a peak is itself a dramatic and highly questionable image.