guardian | A former British Petroleum (BP) geologist has warned that the age of cheap oil is long gone, bringing with it the danger of "continuous recession" and increased risk of conflict and hunger.
At a lecture on 'Geohazards' earlier this month as part of the postgraduate Natural Hazards for Insurers course
at University College London (UCL), Dr. Richard G. Miller, who worked
for BP from 1985 before retiring in 2008, said that official data from
the International Energy
Agency (IEA), US Energy Information Administration (EIA), International
Monetary Fund (IMF), among other sources, showed that conventional oil
had most likely peaked around 2008.
Dr. Miller critiqued the
official industry line that global reserves will last 53 years at
current rates of consumption, pointing out that "peaking is the result
of declining production rates, not declining reserves." Despite new
discoveries and increasing reliance on unconventional oil and gas, 37
countries are already post-peak, and global oil production is declining
at about 4.1% per year, or 3.5 million barrels a day (b/d) per year:
"We need new production equal to a new Saudi Arabia every 3 to 4 years to maintain and grow supply... New discoveries have not matched consumption since 1986. We are drawing down on our reserves, even though reserves are apparently climbing every year. Reserves are growing due to better technology in old fields, raising the amount we can recover – but production is still falling at 4.1% p.a. [per annum]."
Dr.
Miller, who prepared annual in-house projections of future oil supply
for BP from 2000 to 2007, refers to this as the "ATM problem" – "more
money, but still limited daily withdrawals." As a consequence:
"Production of conventional liquid oil has been flat since 2008. Growth
in liquid supply since then has been largely of natural gas liquids
[NGL]- ethane, propane, butane, pentane - and oil-sand bitumen."
Dr. Miller is co-editor of a special edition of the prestigious journal, Philosophical Transactions of the Royal Society A, published this month on the future of oil supply. In an introductory paper co-authored with Dr. Steve R. Sorrel, co-director of the Sussex Energy Group
at the University of Sussex in Brighton, they argue that among oil
industry experts "there is a growing consensus that the era of cheap oil
has passed and that we are entering a new and very different phase."
