Groningen annual Energy Convention 21 November 2006

Oil and gas: what future?

Jean Laherrere [email protected]
ASPO (Association for the Study of Peak Oil & gas) & ASPO France

-Problems of wording
Petroleum = an oily flammable bituminous liquid in upper strata of the earth
Oil = any of numerous unctuous combustible substances that are liquid
Oil is an ambiguous term and includes biofuels (olive oil) and alcohols
Oil should not be confused with petroleum or hydrocarbons

-Reporting data
-publishing data is a political act and depends upon the image the author wants to give (rich in
front of a banker or for quotas, poor in front of a tax collector).
-OPEC productions are ruled by quotas, but because OPEC members were cheating on quotas,
OPEC oil productions are flawed and unreliable. Real data on oil transported by tankers have to be
bought from spy companies (Petrologistics in Geneva).
-oil field reserves are confidential except in UK, Norway and US federal lands.
-words such as energy, oil, reserves, resources, conventional, proved, probable, light, heavy,
reasonable, sustainable, dangerous are badly or not defined on purpose
-reporting any data with more than 2 significant digits shows that the author is incompetent

Reserves end of 2004, publication USDOE/EIA 31 May 2006

Oil & Gas journal World Oil OGJ/WO
Crude oil Gb
world 1 277,181 992 1 081,813 1,2
France 0,146 49 0,160 1 0,9
Russia 60 67,137 9 0,9
Natural gas Tcf
world 6 043,677 6 997,767 4 0,9
France 0,451 0,377 5 1,2
Russia 1 680 2 361,053 2 0,7

End of 2005 OGJ BP OGJ/BP

Oil Gb
World 1 292,549 534 1200,708 502 619 1,1
Russia 60,000 74,436 476 05 0,8
Norway 7,705 9,672 727 8 0,8
Canada 178,7924 16,5 11
China 18,25 16,038 12 1,1
Gas Tcf
World 6 112,144 6 348,068 437 8 0,96
Russia 1 680.000 1 688,046 1
Norway 84,26 84,896 5 1
Canada 56,577 55,950 5 1
China 53,325 82,955 0,6

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-Reserves
Reserves represent the expected cumulative production to be recovered at the end when the field is
abandoned.
There is no consensus on how to assess reserves and there is no world organisation to impose one.
The oil industry has issued some rules (SPE/WPC 1997), but they are used only in internal
estimates.
UN Framework Classifications (1997, 2004) were completely ignored by the industry.
Reserves estimates are uncertain (except when the field is abandoned), but many definitions, as the
SEC (US Securities and Exchange Commission) 1977 obsolete rules (coming from very old SPE
rules), deal with “reasonable certainty “ and refuse the probabilistic approach because the risk
aversion of bankers and shareholders.
Russian oil reserves are a State secret (disclosure = 7 years jail) .
Field reserves are confidential because competition in exploration in most countries, except
Norway, UK and US federal lands. It is surprising to see so many countries where oil belongs to the
country accepting that field data is kept confidential (as in France!).
Reserves represent what will be recovered in future, in a probabilistic approach it has to be the
expected value, but it is better to give a range (mini, mean, maxi) or (low, best, high)
Resource is what is in the ground; reserves are only a small part of resource.
There are several reserve definitions in use:
-US = all companies listed on the US Stock Market are obliged to report only proved =1P ≈
assumed to be the minimum?, but SEC rules = reasonable certainty: what is reasonable?:
probability of 51 or 99 %?
-FSU classification = maximum theoretical recovery ≈ proven + probable +possible = 3P ≈
maximum
-Rest of the world = SPE/WPC 1997 rules (I was a member of the task force) = proven + probable
= 2P ≈ expected value (should be the mean ≈ P40, when given as the median P50, but often
confused with the mode (most likely) ≈ P65); range 1P=90%, 3P=10%
Proved reserves (1P) tell bankers that the company could not be bankrupted, but development
decisions are taken on mean reserves (2P)
All the attempts to improve the data have failed, despite all the claims of good will by governments
and agencies, in particular the JODI (Joint Oil Data Initiative) gathering seven international
agencies under the UN since 2000, providing only some incomplete production data.
Reserve growth occurs when reserves are reported as the minimum (proved), but does not occur
statistically when reported as proven+probable ≈ mean (expected) value.

-Political and technical data

Oil remaining reserves (known discoveries minus cumulative production) can be compared from
political sources giving current proved values and from technical sources after correction of US
Lower 48 and FSU to obtain the backdated mean (expected) crude oil (less extra-heavy) value.
The following graph display my technical data, which is the compilation of several heterogeneous
databases, corrected to best represent the world mean reserves from field, backdated to the year
discovery. The best way should be to backdate to the year where investment are made but it is
impossible to obtain it worldwide by lack of data.
Figure 1: World remaining conventional oil & gas reserves from political and technical
sources

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Political data is always rising from 1950 to now, when from the technical sources, oil remaining
reserves has peaked in 1980! It is well recognized by almost every IOC that, since 1980, oil
discovery is less than oil production
From 1950 to 1979 (oil shock) proved reserves were roughly half of the mean value, the difference
representing the omission of the probable reserves and the incorrect aggregation.
The same data annually shows very well the artefacts of political reporting, compared to the truth,
which is that finding new reserves is a nightmare for oil companies (Scaroni 2006) and that since
1980 the world oil production is much higher than oil discovery.
Figure 2: World annual crude oil (less extra-heavy) mean discovery & production and political
additions (so-called proved)

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Every study based only on the so-called proved reserves should be discarded as useless following
the principle GIGO: Garbage In, Garbage Out.

-Myths to be rejected
To prevent showing decline, all means are used, in particular myths.
-Myth 1: Middle East is under explored
Saudi Arabia has found 80% of the present discoveries with the first 20 NFW (new field wildcat)
from 1935 to 1965 within 12 fields and only 1% with the last 20 NFW from 1997 to 2005 within 16
fields. The country is not under explored, it is finding more fields, but much smaller fields.
Figure 3: Saudi Arabia cumulative oil discovery from IHS and WM in percentage of the last
cumulative versus cumulative number of New Field Wildcats

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 -Myth 2: oil recovery factor (RF) is about 35% in the world and 50% in North Sea, so
world reserves can be increased widely
The most detailed database of IHS reports for 2006 about 11500 fields for the world outside the US
onshore with oil recovery factor ranging from 0,1% to 98 % with an average (by number) of 27%.
In 1997 the database was less documented, reporting only 787 fields with an average of 36%. Raw
incomplete data could lead to the wrong conclusion that recovery rate is decreasing statistically
with time.
In 2001, only 8113 fields (109 fields in FSU compared to 1399 in 2006) are reported with RF with
an average of 26%.
Statistics on oil recovery are meaningless because the reported range is from almost 0% to almost
100%! Average value is quite different when computed with number of fields or with oil reserves.
Figure 4: Oil recovery factor from IHS (world outside US onshore) 2006 & 2001

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Recovery factor depends mainly upon the geology of the reservoir : from 1% for tight reservoir to
85% for very porous and permeable reservoir. Technology cannot change the geology of the
reservoir.

For gasfields, 8560 fields are reported in 2006 with RF with a mean of 61% when in 1997 only 361
fields were reported with a mean of 71%
Figure 5: Gas recovery factor from IHS (world outside US onshore) 2006 & 1997

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It is obvious that in the past only large fields were reported with RF, when now less productive
fields are reported.
There is no indication from the statistics that recovery factor increases with time as suggested by
many. However in 2001 RF for Ghawar was only 47% when in 2004 RF was increased to 60% and
in 2006 to 70%. It is obvious that these reports are political. It is very difficult to improve the
estimate of the oil in place without new wells or new seismic, when reserves estimate improves
with more production data. At the end the reserves are exactly known when oil in place is still a
guess!.
In World Oil December 2005, CEO Statoil T.Overvik stated that Statfjord has recovered 64 % of 8
Gb oil in place (OIP), compared to 48 % in 1979, hoping to reach 70% in the future. But in WO
December 2004 Overvik stated having produced 63 % of 6 Gb OIP. Is the change of OIP a typing
mistake or is OIP a wild guess? IHS reported, in 1998, an OIP of 6.3 Gb with oil+condensate
(O+C) 2P= 4,60 Gb giving a recovery factor of 73 % and, in 2005, an OIP of 6.1 Gb with O+C
2P=4,36 Gb giving a RF of 72 %. IHS does not see any improvement in recovery factor, being
already very high in 1998!
Recovery factor depends mainly upon the geology of the reservoir : 1% for tight reservoir and 85%
for very porous and permeable reservoir. Technology cannot change the geology of the reservoir

-Myth 3: technology increases reserves

Reserve growth is claimed by USGS 2000 report extrapolating the current proved reserve growth in
the US old fields to the backdated proven+probable reserve in the rest of the world. It is a
nonscientical extrapolation as there are two completely different objects. It is as comparing the
temperature in Paris with those in New York without bothering to mention that the first is in Celsius
and the second in Fahrenheit. Previous USGS assessments (Masters) denied reserve growth when
using inferred estimates.
Reserve growth due to technology should be shown on the decline of annual production versus
cumulative production
Field reserve growth is often negative at the end, contrary to genuine expectations before, as the
largest oilfield in the US Lower 48, East Texas, which was estimated for a long time to hold 6 Gb
when decline was only 5%/a, but now, with decline increase to 10%/a, near exhaustion, ultimate
recovery is only 5.4 Gb, with a negative reserve growth of -10%.
Figure 6: Oil decline of East Texas, largest US L48 oilfield 1930-2005

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Over 30 000 wells have been drilled (by over 1700 different operators) 10 times too many (spacing
of 4 acres per well, when 40 acres/w was largely enough), because of rule of capture! There is a
very active water drive and the recovery is estimated at 86 %. Present water cut is over 98%
=14 000 b/d of oil with 1 000 000 b/d of water from 4500 wells! = 3 bo/d/w and 220 bw/d/w

The decline of annual production versus cumulative production is most of the times close to a
straight line, but some shows, as East Texas, a collapse at the end, making the straight line
extrapolation an optimistic estimate, as in the Brent decline (outside the trough in 1989-91 for
works on gas repressuring).
Up to 1997 Brent oil ultimate was estimated to be around 350 to 400 M.m3 with a decline of 8%/a,
but production from 1998 to 2005 (green curve) with a decline of 20 %/a shows that the ultimate
will be around 320 M.m3. Again negative reserve growth.
Figure 7: Brent oil decline showing a late collapse Nov.1976-Apr.2006:

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Modern production aims to get maximum production to get maximum profit (pushed by new
shareholders as pension fund asking short-term large rate of return.
Using multi-branch horizontal wells increases the production, but not the total recovery as shown
by Yibal the largest oilfield in Oman when the decline is about 18%/a and the ultimate is likely to
be around 1750 Gb and not 2370 Mb as reported by IHS in 2006, but 2200 Mb in 1997 and 2095
Mb in 1995: the IHS reported reserve growth of Yibal from 1995 to 2006 is wrong!.
Figure 8: Oil decline of Yibal, largest field in Oman 1969-2003, operated by Shell

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The largest Mexican oilfield Cantarell discovered in 1977 (aggregation of several fields as Akal,
Chac, Kutz, Sihil and Nohoch) was reported by IHS as 15,3 Gb in 1995 and 18,7 Gb in 2006. In
1995 when annual production was at 1 Mb/d, Pemex started an very expensive nitrogen injection
and production raised quickly as they installed 26 new platforms and drilled up to now 190 wells,
but it peaked at 2,1 Mb/d in 2003 & 2004 and starts declining in 2005
Figure 9: Oil decline of Cantarell, largest field in Mexico 1979-2008

The ministry of energy has reported that Cantarell is declining and will produce only 1,4 Mb/d in
2008, meaning a decline of 12%/a (14 %/a was also reported) and an ultimate about 16 Gb
compared to more than 18 Gb for IHS and WM. Again a negative reserve growth !.

There are many negative reserve growth examples in the world, and in my review of all major
(>100 Mb) oilfields of the world I found few examples of decline showing a real positive reserve
growth and all those examples are due to an exceptional geologic case . The best examples are
Ekofisk, which have seen its chalk reservoir, compacted with the decrease of pressure as such as the
seafloor has fallen by 8 meters (platforms had to be raised) and the compaction has increased the
reserve from 180 to 560 M.m3.
Figure 10: Oil decline of Ekofiisk (Norway) 1971-July 2006

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There is another example of exceptional positive reserve growth, which, is Eugene Island 330 in the
Gulf of Mexico. The largest fault in the area called the Red Fault (studied on the web by several
universities) allows the reservoir to be directly in communication to the source rock and when the
pressure dropped the reservoir was fairly quickly recharged by the source-rock. In 1999 Wall Street
Journal (Cooper) stated from this example that oil was coming from the mantle making oil
renewable and almost unlimited.
Figure 11: Oil decline of Eugene Island 330 (US Gulf of Mexico) 1972-2003

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On the plot of annual production versus cumulative production, there are many example of negative
reserve growth and few of positive reserve growth, sot it is likely that the final proven +probable
reserve growth would be negative, at the most nil when using mean values (by definition mean
values are statistically assumed to not change as it is the expected value), but not positive as
claimed by USGS.
It is surprising to read the statement of Lord Browne BP on World Energy vol. 9 n°2 2006 « the last
30 years the limits to the depth of water in which drilling is possible has increased from around
100 feet to more than 6000 feet » In fact the truth is quite higher for both limits. In the Gulf of
Mexico 100 feet was reached in 1956 (GI043) and in 1975 31 years ago Cognac field (MC194) was
discovered by 1024 feet. In 1977 29 years ago Total drilled Habibas in Algeria offshore by 3028
feet of water (TD 14752‘).Today wells have been drilled by more than 10 000 feet of water
(Chevron 10 011 feet at Toledo in 2004). Why to give such wrong statements to praise the impact
of technology ? It is the case of IEA in May and October 2005 showing a manipulated 1998 Shell
graph on North Sea (Laherrere 2006).

-Myth 4: reserves represents 40 years for oil, 60 years for gas and 250 years for coal!
In France coal reserves and R/P are from BP Review
Reserves Mt R/P years
2000 116 32
2001 36 15
2002 36 17
2003 36 16
2004 15 17
2005 15 25
But in France the last coal mine was closed in 2005 and local authorities refuse surface mining
proposals (in Aveyron and Nievre), so no new production is anticipated, so reserves are nil but
resources still high . Unfortunately most of the ,times reserves are confused with resources, mainly
for coal.
R/P from US proved reserves is about 10 years since the last 80 years, showing that this ratio is
useless for forecasting, in fact it is used to estimate reserves as a thumb rule (even used by USGS).
Using backdated proven + probable (mean reserves) gives a complete different decreasing trend!
Figure 12: US R/P from mean backdated reserves and from proved current

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For the world R/P (crude oil less extra-heavy) decreases from 140 years in 1950 to 35 years to day
and trending towards a 20 years asymptote.
Figure 13: World R/P from my technical database with logistic models 1910-2030

R/P is a very poor indicator for forecasting the future, but used by many.

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-Ultimate estimation
Creaming curve is the plot of cumulative mean discovery versus the cumulative number of
exploratory wells (NFW= New Field Wildcat). It is modelled easily with several hyperbolic cycles.
The display by continent shows the huge inequality of endowment. The ultimate by continent is
shown in the next graph totalising 2000 Gb. My ultimate in 2005 was 2150 Gb but I decrease it
when getting WM (Wood Mackenzie) worldwide (almost) database
Figure 14: Crude oil less extra-heavy creaming curve by continent

Creaming curves are rarely used because few have the detailed and complete data of NFW..

-Modelling of future » oil » production

Future production is modelled by drawing with several cycles a curve which the area below it until
the end of production represents the ultimate. The model has to fit past data with value and slope.
The model will represent the best that Nature can offer, if there is no constraint from the demand or
from investments. It is likely that there will be not a peak but a bumpy plateau (with chaotic
prices) following 2004 Paul Volcker’s forecast of 75% chances to have in the ,next 5 years an
economic crisis.
-Cumulative discovery & production
We start with cumulative crude oil less extra heavy (or cheap oil) with 2 Tb (2000 Gb) ultimate.
With 3 cycles for exploration (surface exploration, seismic, deepwater) and 2 cycles for production
(pre-shock and after shock), the oil midpoint production is at 2005 and the oil peak at 2012 .
Figure 15: World cumulative crude oil (less extra-heavy) mean discovery & production with
forecast for an ultimate of 2 Tb 1900-2050

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Present cumulative discovery is over 1800 Gb, leaving less than 200 Gb for yet to find, which is
less than the accuracy of the ultimate (taken with only one significant digit for well showing its
inaccuracy).
- -World annual “oil”
-Crude oil less extra-heavy discovery & production
Annual crude oil discovery peaked around 1960
Figure 16: World annual crude less extra-heavy oil mean discovery and production with
logistic model for U = 2000 Gb (no demand or investment constraint)

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 -liquids production
The oil demand, as it is published by USDOE/EIA and IEA includes all liquids even synthetic oil as
GTL (gas-to-liquid), CTL (coal-to-liquid) and BTL (biomass-to-liquid).,
All liquids ultimate is estimated at 3 Tb being the sum of
-crude less extra-heavy 2000 Gb
-extra-heavy 500 Gb
-natural gas liquids and GTL 250 Gb
-synthetic oil (BTL, CTL) & refinery gains 250 Gb
Crude oil less extra-heavy (cheap oil) is modelled in the previous graph with an ultimate of 2 Tb..
The rest being expensive oil is modelled (red curve) with an ultimate of 1 Tb, making an all liquids
ultimate of 3 Tb, with a peak around 2050. The all liquids peak is around 2015 and over 90 Mb/d,
but this is theoretical assuming no constraint from the demand or from investments. The all planned
megaprojects up to 2010 are well known for oilfields with estimates of cost, maximum plateau and
timing despite most are optimist (McNamara law saying that the ratio for frontier projects between
initial estimate and reality is pi (3,14) for cost and e (Euler number = 2,8) for time. Skrebowski
(Petroleum Review 2006) has forecasted an oil peak in 2010 at 94 Mb/d. This detailed forecast is in
line with our theoretical forecast from ultimate 3 Tb. But CERA (OGJ 14 Aug. 2006) forecasts,
using the same megaprojects, that oil production in 2015 will be 110 Mb/d (but from 88.74 Mb/d in
2006?), forgetting to allow a likely lag and reduction in the realization of the projects as did
Skrebowski. But these forecast are only for oil projects and do not included synthetic oil.
Doubling the ultimate of expensive oil (red curve), making the all liquids ultimate at 4 Tb, will not
change the oil peak date, changing only the slope after the peak.
Figure 17: World liquids production (no demand or investment constraint)

IEA 2005 forecast is plotted with 115 Mb/d in 2030.

Al-Husseini former VP Aramco E&P stated that IEA forecasts are much too high for Middle East
and for Russia

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Skinner (WEC 2006) has forecasted unconventional oil as GTL and BTL up to 2015 .He foresees
only a moderate increase of 4 Mb/d from 2005 to 2015 when I foresees more than the double; but
including NGL and refinery gains
Figure 18: Unconventional oil supply 2002-2015 Skinner WEC 2006

IFP (Champlon Brussels workshop 7 Sept. 2006) has gathered numerous predictions on oil peaks
and has delimited ASPO (green curve) and companies, research centers (light blue curve) and these
two groups overlap for over half when USGS(yellow) looks out of range
Figure 19: date of oil peaks from IFP

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 -US & FSU-Russia forecast
FSU has peaked in 1988, then collapsed drastically, but Russia recovered from 1997 up to now .
But Russian estimates are overestimated, using FSU classification (Kalimow 1979 & 1993) with a
maximum theoretical recovery (3P). My estimate as Leonard 2003 (former Yukos VP) is that
Russia is presently peaking, despite CERA and USDOE optimistic forecasts.
Figure 20: Oil production for US, FSU & Russia with several forecasts 1900-2030

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-Iran
M. Saeidi (VP of Iranian Atomic organization) stated (Guardian 27 Aug. 2006) that Iran has only
25 to 30 years of oil, contrary to NIOC reports of 132 Gb with a R/P of 93 years (2004 OPEC report
& BP Review) or more than 3 times more. Ali Bakhtiari (ASPO & former NIOC) has already
declared that NIOC estimates were exaggerated when reality is close to 40 Gb (from estimates of
M.A.Saidi (geologist and former NIOC head). In 2005 Iran has produced 4 Mb/d with a cumulative
production of 58 Gb. R/P of 25-30 means that remaining reserves are close to 40 Gb, giving a total
discovery about 100 Gb.
Spy companies (IHS, WM), which sell technical data do not want anymore to upset NOCs
(National Oil Company), which are now becoming their clients. They have recently increased their
estimates as shown in the following graph, to match official reports, totalling at end of 2005 190
Gb for IHS 2P (against 165 for IHS 2004), 190 for NIOC 1P and 125 Gb for WM 2P (against 105
for WM 2004)
Figure 21: Iran: cumulative oil discovery & production from different sources 1908-2005

Last year in ASPO Lisbon I plotted future production with two ultimates: 120 Gb (my guess) and
200 Gb (NIOC estimate) and I concluded that Iran need quickly nuclear plants. Saeidi and Saidi
confirm that 120 Gb is a likely ultimate, which leads to an oil peak right now. The claimed last
large discoveries as Azadegan found in 1999 (reserves are reported as 6 Gb for IHS, 3.5 Gb for
WM, 2.6 to T Gb for Salameh 2005 and 26 Gb (oil in place?) by the medias for a production of only
260 000 b/d), which is not yet developed despite the Japanese signed a contract in 2004 and they are
now withdrawing under US pressure; or Yadaveran (Koushk + Hosseinieh) discovered in 2002
(reserves of 3 Gb for IHS , 1.7 Gb for WM and 30 Gb (?) for some medias) which is negotiated
with the Chinese and the Indians. But Iranian oil contracts are very poor, and US oil companies are
forbidden to operate. Such fields will only impact the decline and not the Iranian oil peak.
The 2003 UN population scenarios (low, and medium which in the past were always too high) is
compared to USCB forecast leading to a likely population peak at 80 millions around 2050.

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Figure 22: Iran: forecast of oil production and of population 1910-2070

The oil production per capita shows a spike around 1970 and a plateau from 1990 to 2010 with a
sharp decline beyond.
Figure 23: Iran: forecast of oil production per capita 1910-2050

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Iran has large reserves of gas but not enough to provide exports for earning money and national
consumption and replacing declining oil. They will need nuclear plants quick and should start now
to build them.

-Denial of signed contracts

Our forecast is based on ultimate reserves but as already stated it assumes that there is no constraint
from the demand or from the investments. A recent trend of denial of signed contracts in Bolivia,
Russia and Venezuela is a bad sign for investors, but foreign investment and technology are needed
in these countries, which are spending oil money for social uses.
All these constraints will make the oil peak a bumpy plateau and will lead to chaotic prices.

-Natural gas
The remaining natural gas reserves reported as proved by nations display the same divergence with
the technical data. The problem is that technical database is more difficult to obtain, because the
difference between IHS and WM is wider than for oil as WM reports only so called technical gas,
which can be produced when IHS reports discovery, including a lot of stranded gas. Technical data
has peaked since 1980
Figure 24: world remaining NG reserves from different sources.

World cumulative discovery and production is modelled with a logistic curve but the largest
gasfield (North Dome found in 1971 being North field in Qatar and South Pars in Iran reported as
1991 by IHS) represents about 15 % of the ultimate (Ghawar represents only 6%) and upsets the
curve, so it is separated from the curve
Figure 25: 2006 forecast: World conventional cumulative gas conventional discoveries and
production with logistic models

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The ultimate NG was estimated at 10 000 Tcf (10 Pcf) 10 years ago (Laherrere, Perrodon, Campbell
1996) for conventional and 12 Pcf including non-conventional. We keep these values, as updated
data confirm these round values, but if gasification of coal works (problem of sequestration of
CO2), the ultimate can increase but it will not change the peak only the later decline.
The world NG production will peak in 2030 about 140 Tcf/a when USDOE 2006 forecasts for 2030
182 Tcf/a and rising, but IEA 2005 has decreased from 2004 the value to 165 Tcf/a.
Figure 26: World annual gas discovery & production as forecasts

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Global gas will peak around 2030, but as gas is ten times more expensive to transport than oil, there
are several natural gas local markets: North America, Europe, Asia Pacific and now South America.
There is still flared gas because too far from consumption centers and there is large amount of
unconventional gas with tight reservoirs, gas shales, CBM (coalbed methane). But unconventional
gas needs a very large amount of drilling and growth will be slow. The attempts in the 70s to
produce dissolved gas in geopressured aquifers (Gulf Coast) demonstrate that problems are almost
insurmountable. Hopes in oceanic hydrates are dreams as these hydrates are too dispersed
(decimetric or metric accumulation) to be one day produced if a way to produce them is found =
again a myth!

Gas shortage will occur soon in North America and it is why they are rushing to build LNG
terminals. Conventional natural gas production will decline sharply when comparing to the
discovery shifted by 23 years.
Figure 27: US + Canada + Mexico: conventional gas production & shifted discovery by 23
years: 1900-2030

Natural gas production in Europe is peaking but consumption is rising sharply. Europe is counting
too much on Russia gas. Europe will suffer soon of gas shortage and high prices despite recent
studies by WM.
Figure 28: Europe: natural gas consumption & production for an ultimate of 750 Tcf: 1930-
2050

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IEA recognizes that the European Union gas supply balance will need to import (mainly from
Russia and Algeria) in 2020 about 500 G.m3 (18 Tcf)
Figure 29: Supply and demand of natural gas for European Union from IEA

Europe is counting on Russia gas reserves, which are overestimated because the FSU 1979
classification (Khalimov 1979, 1993) is dealing with the maximum theoretical recovery (3P).

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The largest West Siberia gasfield Urengoi (for many still the world largest!) is sharply declining
(Milov 2005, Stern 2005) and its likely ultimate is about 240 Tcf when reported as 370 Tcf by IHS
and 267 Tcf by WM.
Figure 30: Urengoi gas decline 1979-2020

My estimate of FSU ultimate is about 2000 Tcf and FSU gas production should peak (no
investment constraint) about 2020 at less than 35 Tcf/a (presently 27), with a potential of export less
than 10 Tcf. But if Russia is making a lot of money from oil and gas export; Gazprom finance is
used by the government leaving no enough to invest in the very expensive development large
gasfields (over 100 Tcf) of Yamal peninsula (Bovanenko discovered in 1971) and Barentz sea
(Shtokman discovered in 1988). Yamal gaspipeline has been planned for decades and still not
completed.
Russia is also promising to export gas to US and Asia (3 Tcf/a for China in 2011 signed in March
2006). Putine (reported as the next Gazprom head when obliged to quit Russia presidency in 2008)
is making alliance with Sonatrach to squeeze Europe gas needs. But FSU was used to waste gas
because it was considered in the past as unlimited (Moscow flat fees include gas heating and there
is no meter). Large savings could be realized. Last winter Gazprom shut gaspipeline not only for
Ukraine and Europe but also for all Russian consumers as it was very cold and production was not
able to supply the demand (Milov 2006).
Figure 31: FSU: annual consumption & production of natural gas with an ultimate of 200 Tcf
(no investment constraint) 1950-2030

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Europe gas needs are unlikely to be filled, if the demand continues as in the past (business as usual),
by the present exporters. More LNG terminals will be then necessary.

-Fossil fuels forecasts

Fossil fuel production can be easily forecast when ultimates are well estimated. But there are very
few inventories of fossil fuels resources (the best and only homogeneous being BGR in Germany).
And when done resources are confused with reserves.
My ultimate estimate is as follows, leading to peak (if no demand or investment constraint)
Ultimate in Gtoe peak
-oil 400 2015
-gas 300 2030
-coal 600 2050
The UN 2003 population forecast (medium; low/medium, low) is added, but the medium/low is g-
for me the most likely.
Figure 32: World annual production of coal, oil and gas & population 1800-2200

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Population peak coincides happily with coal peak, around 2050
The combined fossil fuels will peak around 2030 (no demand constraint

Figure 33: World annual fossil fuel production 1850-2150

The world fossil fuel consumption (=production) per capita shows that after a sharp rise from 1950
to 1973 (oil shock) it is flat around 1,4 toe/cap since the last 30 years and it will stay at its level

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until 2025. But from 2025 to 2050 consumption per capita will fall with a slow decline of about 1
%/a.
Figure 34: World annual fossil fuel production per capita 1875-2125

More nuclear reactors will be needed, because renewable cannot replace the fossil fuels in volume.
Also, when present reactors use only U235 (0.7% of the uranium), present reserves (15 Mt) will be
short around 2035 to fill an energy growth of more than 1.5%/a, new generation IV (in particular
Fast Neutrons Reactors to increase uranium and thorium reserves by a factor of 60) will be needed
around 2030.

-Primary energy
Primary energy historical evolution is hard to get because non-commercial energy (wood & dung,
energy from muscle: human and animals) are badly or not reported. Also equivalences to convert
each energy in a single unit (joule or toe) are badly defined.
Figure 35: World annual primary energy mix 1800-2005

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World primary energy displays an obvious concave curve from 1800 to 1973 first oil shock and
beyond up to now (11,6 Gtoe in 2005) a fair (not for all, in particular in the last few years) convex
curve. Official (USDOE and IEA) forecasts being the wishes of business as usual (continuing to
have a over 3%/a growth for the next 30 years) lead to over 16 Gtoe in 2030. Extrapolation of the
past 30 years leads towards an asymptote at 15 Gtoe. Fossil fuels forecast (figure 33) is plotted and
the gap between primary energy and fossil fuels (being nuclear and renewables) was 2 Gtoe in 2005
and is likely to be 6 Gtoe in 2050. It is doubtful that renewables can fill this gap without the help of
nuclear plants.
Figure 36: World annual primary energy 1800-2100

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IPCC reports 2001 and 2007 are based on 40 energy scenarios (SRES) designed by IIASA on
mostly unrealistic grounds (that I described already in an IIASA workshop in 2001 in particular for
gas dreaming of methane hydrates). These 40 scenarios for 2100 range from 12 to 66 Gtoe, with an
average of 37 Gtoe, meaning that the gap to fill beyond fossil fuels (at 4 Gtoe/a) could be 33 Gtoe !
Figure 37: World IPCC scenarios for primary energy 1990-2100

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Conclusions
Fossil fuels public data are unreliable, in particular on reserves, confused with resources. Even
production data are flawed, because publishing data is a political act and depends upon the motive
of the author. There are several reserves definitions : US= proved = minimum, FSU = maximum
and rest of the world = mean or expected value. Oil data are disturbed because OPEC members
fight between themselves on quotas. IEA reports are also flawed (missing 1999 barrels led to the
10$/b). political remaining reserves are growing since the last 50 years when technical remaining
(confidential) reserves are decreasing since 1980 because discovery is now much less than
production.
Economists do not think wrong, they think on wrong data.
Official production forecasts are based on continuous growth wishes, denying any peak. Realistic
forecasts need to estimate the ultimate recovery, based on the extrapolation of creaming curves,
data mostly confidential except in UK and Norway.
There are many myths based on general statements without any proof, but dismissed by individual
field data. R/P is a very poor parameter for forecasting the future, but used by many.
Oil (liquids including synthetic oils) will peak in less than 10 years, if there is no constraint from
the demand or investments, or will follow a bumpy plateau with chaotic prices.
Gas is not global because the high cost of transport and shortage could occur before oil shortage in
North America or Europe. World gas will peak around 2025.
Coal will peak around 2050, because reserves are often confused with resources (case of France).
But in situ gasification, if viable, may convert resource into reserves.
Fossil fuel per capita is flat at 1,4 toe/cap since 1975 and will stay until 2025.
Primary energy will flatten and may trend towards 15 Gtoe. Even with this low level the gap with
fossil fuels will be hard to fill without new generation nuclear plants.

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