"Peak Oil: Not enough oil for the G20 package," By Kjell Aleklett, Aleklett Energy Mix, Apil 3, 2009

The world’s wealthiest nations, the G20 group, have decided to light a fire but have forgotten a very important detail – to check whether there is sufficient fuel to enable the fire to burn. Historically we have never had global economic growth without a simultaneous increase in the use of energy. This means, primarily, an increase in the use of fossil fuels. For a few nations – China, USA, Russia, India, Australia and South Africa – coal is a very important fuel. However, the most important fuel for the world economy is oil. All nations of the world use oil.

When the economies of different nations are compared, one usually compares their GDP(PPP), Gross Domestic Product (Purchasing Power Parity) per capita. If one furthermore compares how much oil nations use one can see that, since the Second World War, all nations have had to increase their oil use to get economic growth. If we compare how much oil is needed per 1000 dollar GDP (PPP) per person we get a suitable figure for comparison. The amount of oil different nations use varies. In 1980 Sweden, together with the USA, was the worst in the world since we needed the most oil. Nuclear energy and increased use of biofuels have helped us in Sweden to improve but we are still not as good as, for example, France, Germany and the United Kingdom.

During the last 20 years we have had global economic growth of approximately 3% per annum. Fuel use in the form of oil has increased, on average, by half of this rate, i.e. 1.5% per annum. In the future prognoses made by the International Energy Agency, IEA, they believe that we can increase our efficiency of fuel use but we will still need more oil. The documents that resulted from the G20 meeting assume that this fuel will exist to allow future global growth.

To get an appreciation of the scale of the task we can examine the economic growth that the world experienced from 2003 until 2007. In 2003 oil consumption was 77 million barrels per day and in 2007 it was around 85 million barrels per day, i.e. an increase of 10 percent. At the moment consumption is around 84 million barrels per day. If the stimulus package that the G20 group decided on is to generate the same amount of growth as seen in the 2003 to 2007 period then we will need an increase of 8 to 9 million barrels per day during the next 5 years. Such an increase is not possible.

The Global Energy Systems group at Uppsala University has just published an article in the scientific journal Energy Policy (see article) in which we show that oil production from those fields that are currently in production will decrease by 6 percent per year during the next 5 years. This means a decrease in the rate of production by 18 million barrels per day after 5 years. The G20 nations want to increase oil use but the forces of Nature say that there will be a decrease. For the G20 nations to get what they want the world’s oil industry would need to bring online new production of 25 million barrels per day over the next 5 years.

The USA-based company CERA has studied all the projects that the oil industry currently plans to bring online in the coming years. Last summer they arrived at an optimistic estimate that saw 14 million barrels per day of new production. One week ago they revised this increase downwards by 7.6 million barrels per day since companies are now postponing projects.

The same nations that now require increased oil consumption will meet in December with the world’s other nations in Copenhagen. They will then discuss what measures they can take to reduce oil consumption. They do not discuss what volumes of renewable energy will be needed but we have made an initial preliminary estimate and we find that 30 million barrels of oil per day must be replaced with renewable fuels and electricity by 2030 to keep a GDP(PPP) growth rate of 3 percent. What the G20 group should discuss is what investments will be required for this transformation of the energy system to become reality.


Kjell Aleklett, Professor of Physics
Global Energy Systems, Uppsala University, www.fysast.uu.se/ges
President of ASPO International, the International Association for the Study of Peak Oil & Gas, www.peakoil.net
Mobile: +70 425 0604
Email: kjell.aleklett@fysast.uu.se

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Original article available here