No Technological Fix for Falling Oil Stocks

Nigel Wilson, Energy Writer
November 22, 2005

DECLINING production from the world's major oil fields could not be made up by technological advances or the development of new discoveries, a Swedish energy expert warned yesterday.In Perth to launch the Australian chapter of the Association for the Study of Peak Oil and Gas, Professor Kjell Aleklett of Uppsala University said four fields the size of the North Sea would have to be found for oil production to meet expected world demand in 2025.

"This is just not possible," he told a meeting of transport bureaucrats.

"There is no possibility that the 65 current oil-exporting countries can lift output sufficiently to meet demand when production is declining in 54 of them."

He said 75 per cent of known world oil reserves were in Muslim countries, and the rest of the world would have to be conscious of this as supplies of traded oil tightened.

About 1 per cent of world oil fields, "mostly in desert countries", were responsible for 50 per cent of production and this trend would continue, he said.

Professor Aleklett, who heads the APSO organisation in Europe, said that the answer to closing the gap between current world demand for 85 million barrels a day and projected demand of 115 million barrels a day in 2025 "must come from something other than technology".

The APSO is an international network of scientists, mostly affiliated with European institutions and universities, that aims to determine when world production of oil and gas will peak and decline, and the consequences.

Peak oil theory, which holds that at some stage exploitation of the world's known oil reserves will be greater than the oil remaining, developed from the work of Shell geophysicist M King Hubbert in the 1950s which correctly predicted oil production in the US would decline from the 1970s, despite an upsurge in exploration.

Professor Aleklett said the world was addicted to oil.

Current knowledge of the way petroleum systems worked suggested no new big oil fields would be found, unless they were off Greenland or in Siberia, both of which posed development challenges.

He noted that despite popular prejudices, China - with 21 per cent of the world's population - accounted for only 8 per cent of world oil and gas demand.

This compared with the US - with 5 per cent of the population - which accounted for 25 per cent of consumption.

If China lifted its demand to 21 per cent of world oil production by 2030 it would need 25 million barrels a day.

This compares to current demand of just 6.3 million barrels of oil a day.