The peak oil debate continues to rage without any obvious progress. But, upon examination, the peak oil theory falls down because of serious flaws in logic and application. CERA's view, based on two decades of research, is highly unpopular in peakist circles. However, ours is not a view of unlimited resource. A plateau will occur-but not tomorrow, and supply will not "run dry" soon thereafter. We hold that aboveground factors will play the major role in dictating the end of the age of oil.
* Based on a detailed bottom-up approach, CERA sees no evidence of a peak before 2030. Moreover, global production will eventually follow an undulating plateau for one or more decades before declining slowly. Global resources, including both conventional and unconventional oils, 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. Put more simply, the case for the imminent peak is flawed. As it is, production in 2005 in the Lower 48 in the United States was 66 percent 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 ensure that policymakers outside the energy community have a clear understanding of possible outcomes and risks.
Read CERA's recent Press Release on this report.
