Total CEO Predicts Shortfall in Forecast Global Oil Production
01 November 2007
Financial Times. In a talk at the Oil & Money conference in London, the CEO of Total predicted that global oil output will fall well short of official forecasts from the IEA and the US EIA.
In an unusually stark prediction for the head of one of the world’s biggest oil companies, Christophe de Margerie, CEO of the French group, said it would be difficult to reach even 100m barrels a day.
The International Energy Agency, the rich countries’ watchdog, in its “business as usual” projections, has said oil supply will reach 116m barrels a day by 2030, up from about 85m b/d today. The US government has a similar forecast of 118m b/d in 2030, including a relatively small contribution from biofuels.
Mr de Margerie, however, said while forecasts could always change, “100m barrels [per day] . . . is now in my view an optimistic case”.
He added: “It is not my view: it is the industry view, or the view of those who like to speak clearly, honestly, and not . . . just try to please people.”
De Margerie said that while reserves are sufficient, the constraints are the industry’s ability to produce the oil quickly enough and the willingness of countries owning the reserves to develop them. Other speakers at the conference also warned of the limits to the expansion of oil output.
Thierry Demaraie is also in line with the CEO of Chevron on the peak oil likely timing ~ 2020. Apparently it is more than a belief since he decided to invest Total money in the Nuclear Energy. When one of the major oil company start to diversify its activity from oil it's really sign...
Posted by: Treehugger | 01 November 2007 at 08:32 AM
Even more interesting in the article is the fact that even the CEO of Exon Mobile admit the fact that the Non-Opec oil production is about to decline, what a progress...it is clear that everybody was lying so far in the oil industry. Just like in 1955 when Hurbert predicted Amrica oil production peak in 1970, everybody disregarded it but he was right...EWG in the mid 90s predicted the north sea peak oil in 2000 nobody believe it but it happened to be true. The major energy consultants were confident about the reserves of gaz in north america in the mid 90s that there were no shortage in view and the production peaked in the end 90s....
2020 seems the a good trade off date for the oil peak, with some big problem of disruption in the 2010-2012
Posted by: Treehugger | 01 November 2007 at 08:50 AM
For those interested in Peak Oil discussions and information, here is a good link:
http://www.energybulletin.net/primer.php
Posted by: Richard Sible | 01 November 2007 at 10:21 AM
Richard
Yes that's a good summary, interesting in this link is that the curve of discovery over time is from Exxon Mobile...
Anybody who is about to change its car should think twice before investing in a gaz guzzler. We are told that the current price of oil at 96$ are speculative, I think it is not, I think it is just the right price,
Posted by: Treehugger | 01 November 2007 at 11:00 AM
I hope you Peak Oil people realize the oil interests love that you're rationalizing their unreal profiteering. "Oh, you're right - we're running out! Yeah, that's the ticket! Now bend over. Papa needs another new megayacht!"
Posted by: | 01 November 2007 at 11:04 AM
hi jack, been trolling over on TOD again?
Posted by: John | 01 November 2007 at 11:20 AM
Oil prices are high and it will eventually peak and run out, especially as demand grows in the developing world, but it's important to recognize the significant part being played by the cheapening dollar, the currency in which most of the world denominates oil. And as an owner of stocks and options whose job is to keep even bigger shareholders happy, this guy has a vested interest in further runup. Provided a bubble doesn't develop and pop, the high prices could be quite auspicious for development of alternatives.
Posted by: Jim G. | 01 November 2007 at 11:33 AM
The Peakist come out of the woodwork...
What will you worry about when US and world oil demand drops by two thirds or more by 2020, as the electrified LDVs become common, worldwide?
Carbon dioxide emission will have been shown to be a scientific non worry long before then; even as human linked CO2 emissions decline, and the CO2 levels in the atmosphere stabilize and fall?
Modern 21st century Science, as the IPCC itself confirms in AR4, is close to down grading the residency time of atmospheric CO2 from 50-200 years to but five and half to six years, as Science thought originally prior to the early 1970s. That means atmospheric CO2 levels will respond rapidly to changes, and begin a swift decline.
In 2020, Man will be in the stage of designing the first commercial Fusion power plants. Energy plants, which have the attribute of providing all the virtually inexhaustible energy we will ever need. Plants whose fuels, or its technologies, thanks to the Herculean diplomatic efforts over the last seven years, lead to the re-creation of the international funded ITER consortia. This commomn funding and therefore public technology, are not concentrated anywhere. No concentration of fuels or knowledge will exist in such a manner as to create the equivalents of Fusion Sheiks, similar in kind to the Mid-East and Marxist Oil despots of today.
huge quantities of hydrocarbons will still be available for the much smaller demand for better purpose than to simply burn; serving as the feedstock for medicines and the numerous polymers that so enhance our lives.
It is delightful to contemplate such a pleasant future.
Posted by: Stan Peterson | 01 November 2007 at 11:39 AM
World peak oil will come sooner or later and price will keep going up as production is forcibly reduced, but...
Alberta tar sands can produce enough oil (3 million barrel/day) or about 1 billion barrel/year to satisfy all local Canadian uses for another 170 to 270 years and keep exporting some (to out south of the border neighbour), if we can live with the pollution created by the process.
We hope that all our ground transportation will be electrically powered before local oil runs out.
Posted by: Harvey D | 01 November 2007 at 11:42 AM
Stan
If the transportation become electrified by 2020 then we should see a trend today in that direction, right ? Sorry but I don't see it at all, the only promise are the PHEV coming to market by 2010 at best in very limited quantities. Doubt that will be more than a few % in 2020
Fusion power is still totally speculative to day, no one know for sure that it will work one day in a practical form.
The oil company loves the oil peakeast ? I don't think so, they don't want people to divest from their business, proof are how shell and Exxon Mobile are reluctant to admit the oil peak.
Posted by: Treehugger | 01 November 2007 at 12:02 PM
What's TOD?
Posted by: curious | 01 November 2007 at 02:05 PM
at $96 a barrel, exploration efforts will re-double.. but these high prices will drive us toward electrics.. hopefully oil prices will not collapse before that happens.
I dont see fusion plants replacing nuclear plants for a long time.. the nuclear plants have become refined to a point that they are very reliable and economical, and further improvements are possible.. eventually no one will be able to beat the simplicity and low cost of solar power with photovoltaic cells.
Posted by: Herm Perez | 01 November 2007 at 05:16 PM
TOD = the oil drum
http://theoildrum.com/
Posted by: Neil | 01 November 2007 at 06:15 PM
TOD is theoildrum.com
Posted by: Philippe | 01 November 2007 at 06:19 PM
"We are told that the current price of oil at 96$ are speculative, I think it is not, I think it is just the right price"
I just finished reading both Twilight in the Desert and Hubert's Peak. From everything I've read/seen/heard, Saudi Aramco's incremental cost per barrel, before transport, is $23 per barrel. Depending on the rig, Brent crude is $31-42 per barrel.
I don't think today's price of ~$96 is "the right price". Their are many things outside of normal exploration/ exploitation that are contributing to that price. One aspect, as another poster noted, is a dollar hedge. Oil prices and the value of the dollar are (loosely) inversely related. There is also a fair amount of risk priced priced in over a possible war with Iran.
A war with Iran would compromise ~3.5mbpd of world oil production. Aramco claims to have swing capacity upwards of 3mbpd, but a lot of traders are calling their bluff. Ghawar and Abiqiq, IMO, have issues with water encroachment. Even if there is enough oil in the ground to meet 3mbpd of swing, it is unlikely the gas/oil/water handling facilities could handle the additional production.
Posted by: GreenPlease | 01 November 2007 at 07:07 PM
This announcement coupled with Chevron investigating Algae->oil is very disturbing. While there is probably enough oil in the ground for 50+ years, the nationalization of such resources and subsequent reduction in forward capital investment in production will force an artificial peak.
Posted by: GreenPlease | 01 November 2007 at 07:11 PM
GreenPlease
What are your references to claim that there is for 50 years of oil in the ground ? first of all this doesn't mean anything, oil in the ground is not a barrel from which you can accomodate the supply and demand just by turning a valve, if you have for 50 years of reserve in the ground it's just means that production will peak 20 years from now, and if the production peak when the demand soars then the prices skyrocket, right. in the 70s when america oil production peaked then increased their import of foreign oil and it trigged the fisrt oil crisis, to day america is no longer the only oil thirsty country and we don't have another planet to tap it. The game is over or soon will.
Saudian oil is the cheapest oil to extract so 23$ doesn't reflect the average price, Tar sand is in the 40$ and don't forget that crude is not gaz, Alaskan oil is even higher. Again he oil price is not determined by cost of extraction but by offer and demand. If prices soars it simply because demand outpaces offers.
Amereca is still in the naive belief that the all oil in the world is ours and therefore the price should be low because our all economy is build around cheap oil.
You should better buy an efficient car right now rather than speculating on cheap gaz coming back
Posted by: Treehugger | 01 November 2007 at 11:01 PM
Cheap gas will occur at the end of the next depression. Though I wonder if the currency used will still be the dollar. As far as fusion goes, (with the exception of the sun) corn ethanol is probably more capital efficient.
Posted by: John Schreiber | 02 November 2007 at 12:55 AM
World's Oil Consumption increased
3.5 % in 2004
1.5 % in 2005
0.7 % in 2006
Despite heavy demand, the supply could not increase enough to match the demand.
All the investments in new fields made by Saudi, Kuwait and Canada will only compensate for the decrease in their existing fields.
Whether the supply could touch 90 million bpd is a big question.
So how will IEA / EIA answer if World's consumption does not touch 115 million bpd by 2030.
Meanwhile the consumption of Bio-fuels are increasing at a rapid pace. Fission can take a big share, but Fusion is still far away.
Posted by: Max Reid | 02 November 2007 at 11:34 AM
@Treehugger
My "source" is extrapolation (and slight modification assuming market forces) of demand and RESERVE curves. I should have said that.
As you stated correctly, just because we have a couple hundred billion barrels of oil in the ground doesn't mean that we can keep pumping it out at current rates.
When I provided those production prices, I did not intend to represent them as what I thought the market price should be. I was only providing them as a basis to demonstrate how powerful the demand side forces (both tangible and intangible) are.
Posted by: GreenPlease | 02 November 2007 at 05:20 PM
Max
I agree with you that the position of the IEA is unsustainable, and they will soon be the only ones argueing that the oil production can be crancked to 130mbpd. I understand that when it comes to oil reserves, IEA rely on OPEC numbers which more and more people in the industry say that they cannot be trusted.
It is funny but he history just repeat itself and man never learns from his mistakes. In 1974 when it became clear that Hubert was right in his prediction, the congress tried to understand why they hadn't been warned of the fact ahead of time. They discovered that tremendous pressures had been put on people who knew in order to avoid them to talk. Plus everybody had forgoten the prediction of Hubert....
Posted by: treehugger | 02 November 2007 at 07:52 PM