While predictions by Total Chief Executive Christophe de Margerie and others that world oil production is facing a limit of 100 million barrels per day or less have received a lot of attention lately, new long-term energy forecasts from major oil companies and government organizations seem to be quietly converging with that stark assessment. While the latest mainstream energy forecasts don't predict a peak or plateau, they do see little more than 100 million b/d of conventional oil output by 2030 -- the end of the forecast period (PIW Nov.5,p1). Both Exxon Mobil's new long-term outlook and the latest World Energy Outlook from the International Energy Agency (IEA) project conventional oil production of 105 million-106 million b/d against total liquids supply of 116 million b/d. According to the recent US National Petroleum Council (NPC) study, Facing the Hard Truths about Energy, the average of all the forecasts gathered from international oil companies pointed to an even lower global liquids supply of 107 million b/d by 2030, implying conventional oil of less than 100 million b/d (PIW Dec.10,p1). The pattern in these annual projections has been for gradual reductions in total supply figures in recent years, even at much higher prices, despite signs of unexpectedly durable oil demand from emerging markets.

The new forecasts reflect the impact of changing government policies as well as expectations of greater energy efficiency gains among other factors. While the IEA reference forecast makes its projections based on no further change in policy, the Exxon forecast includes measures that would take account of the cost of carbon emissions. In an alternative policy forecast, the IEA projects total liquids supply of just 102 million b/d in 2030, and only 85 million b/d by then if an all-out effort is made to restrain greenhouse gas emissions. One critical complication among these forecasts is the lack of consistency in defining unconventional oil, and given its growing role in the years ahead this is becoming a more critical issue.

Even with the convergence toward 100 million b/d, the mainstream forecasts still involve some admittedly ambitious supply assumptions to get up even to that level. Both Exxon and the IEA see Opec production having to increase by more than 50% from current levels by 2030. The IEA pegs Saudi output at a hefty 17.5 million b/d by then, with big increases from other Mideast producers, too. Exxon projects Opec crude oil production at 47 million b/d, but both stress the obstacles ahead in achieving these kinds of supply increases. While the NPC study highlights the big differences that emerge among supply projections after 2015, the IEA warns that even in the period from now until 2015 balances will be tight, and that even a slight excess of demand or shortfall in supply risks significant upward price pressure.

Source: Exxon Mobil, IEA. Some figures are estimates based on trend lines.