This is not exactly startling news here. It is just a new peak in all liquids. Not a new peak in conventional crude. Thus those who predicted a peak in convention crude in 2005/2008 still seem safe as far as this report is concerned. The IEA already predicted that all liquids would peak much later than conventional crude. That is not exactly a reason to laugh off peak oil however. They still call such a future "stark" and add that it is not good news for oil consuming nations.
Has the World Already Passed “Peak Oil”?
The year 2006 may be remembered for civil strife in Iraq, the nuclear weapon testing threat by North Korea, and the genocide in Darfur, but now it appears that another world event was occurring at the same time—without headlines, but with far-reaching consequence for all nations.
That’s the year that the world’s conventional oil production likely reached its peak, the International Energy Agency (IEA) in Vienna, Austria, said Tuesday.
According to the 25-year forecast in the IEA's latest annual World Energy Outlook, the most likely scenario is for crude oil production to stay on a plateau at about 68 to 69 million barrels per day.
In this scenario, crude oil production "never regains its all-time peak of 70 million barrels per day reached in 2006," said IEA’s World Energy Outlook 2010.
In previous years, the IEA had predicted that crude oil production would continue to rise for at least another couple of decades.
Now, because of rising oil prices, declines in investment by the oil industry, and new commitments by some nations to cutting greenhouse gas emissions, the new forecast says oil production is likely to be lower than the IEA had expected.
End of Cheap Oil
The projected flat crude oil production doesn’t translate into an immediate shortage of fuels for the world’s cars and trucks. IEA actually projects that the total production of what it calls “petroleum fuels” is most likely to continue steadily rising, reaching about 99 million barrels per day by 2035.
This growth in liquid fuels would come entirely from unconventional sources, including "natural gas liquids," which are created as a by-product of tapping natural gas reservoirs.
The consequences for the world’s energy consumers of this increased reliance on natural gas liquids and other unconventional fuels are stark.
"The age of cheap oil is over," said Fatih Birol, IEA chief economist.
"If the consuming nations do not make major efforts to slow down the oil demand growth, we will see higher oil prices," Birol said, "which we think is not good news for the economies of the consuming nations."
A major reason for the rising prices and flatlining production is that for "the currently producing fields of crude oil, the production will decline," Birol said.
Today's active oil fields produce about 70 million barrels per day, but by 2035, he said, "they will produce less than 20 million barrels per day of oil."
The oil barrel is half-full.