CENTRE D'ANALYSE STRATEGIQUE

Les pics mondiaux de production du ptrole et du gaz et leurs impacts sur l'avenir des nergies
Pierre-Ren BAUQUIS
Professeur Associ ENSPM (IFP School) Professeur TPA (TOTAL Professeurs Associs) Expert auprs de l'Acadmie des technologies

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28 octobre 2006 1

PARTIE 1

UN POINT SUR LE PICS DU PETROLE ET DU GAZ

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Brief summary of past findings and views

The only "publically available data" on oil reserves are the so called "proven reserves". Unfortunately, they are totally useless to study and predict "Peak Oil". The only "usable" concepts for "peak oil estimation", at oil basins levels, countries levels or world level are : Ultimate reserves concept Evolution of past exploration performances and production curves (creaming curves) King Hubbert methodology (world applicability).

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PROVEN RESERVES : AN OPTIMISTIC PICTURE

1973
GTOE Years of consumption GTOE

2000
Years of consumption

Oil world reserves Gas world reserves

86 52

30 48

140 140

40 65

Observing the "visible part of the iceberg" leads to conclude that we have plentiful and fast growing oil and gas reserves and that there is no problem
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What the R/P (Reserves/Production) ratio means

World oil production (Mbep/d)
140 120 100 80 60

??

!
30 years R/P = 40 years

40

this area = already used

20 0
65 70 75 80 85 90 95

this area = reserves left

00

05

10

15

20

25

30

35

19

19

19

19

19

19

20

20

20

20

20

20

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20
5

19

20

20

28 octobre 2006

40

But a closer look (at ultimate reserves) suggests a different picture

Ultimate reserves (conventional crude, worldwide)

1973

2000

G barrels

2000 - 3000

2000 - 3000

Between 1973 and 2000, ultimate reserve estimates have practically remained flat.
source: PR Bauquis 26-28 novembre 2000 - Global Foundation

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1000

1500

2000

2500

3000

3500

500

Gb

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1940 1949 1950 1959 1960 1969 1970 1979 1980 1989

Source: IFP/DSEP adapted from Martin (1985) and Campbell (1992) - Updated 2000
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HISTORICAL VIEWS ON ULTIMATE RESERVES

1990 2000

Pratt (1942) Duce (1946) Pouge (1946) Weeks (1948) Leverson (1949) Weeks (1949) MacNaughton (1953) Hubbert (1956) Weeks (1958) Weeks (1959) Hendricks (1965) Ryamn (1967) Shell (1968) Weeks (1968) Hubbert (1969) Moody (1970) Weeks (1971) Warman (1972) Bauquis (1972) Schweinfurth (1973) Linden (1973) Bonillas (1974) Howitt (1974) Moody (1975) WEC (1977) Nelson (1977) De Bruyne (1978) Klemme (1978) Nehring (1978) Nehring (1979) Halbouty (1979) Meyerhoff (1979) Roorda (1979) Halbouty (1979) WEC (1980) Strickland (1981) Coliti (1981) Nehring (1982) Masters (1983) Kalinin (1983) Martin (1984) Ivanhoe (1984) Masters (1987) Campbell (1991) Masters (1991) Townes (1993) Petroconsult. (1993) Masters (1994) USGS (2000)

* Cumulative production + proven reserves + possible reserves yet to be discovered

THE IRREVERSIBLE DECLINE OF OIL PRODUCTIONS IN THE USA

(*) Discoveries are registered as per their initially declared sizes and their timing is forwarded by 33 years 28 octobre 2006 CAS - PARIS

Source : King Hubbert 1956 - Updated by Jean Laherrere

Oil and condensate discoveries and worldwide production of liquid hydrocarbons

Gboe/year (5-year average)

70
Deep sea (>500m)

60 50 40

Kashagan / Shah Deniz Classic exploration Liquid HC production

Sources: - Discoveries: IHS (excl. onsh US/Canada and GoM Shelf ) (May 2005) - Production: BP Statistical Review of World Energy (June 2004)

58 Excl. non-conventional oils such as Athabasca and Orenoco

47 39 34 36 32 29

36

30 20 10 0
1 1 1 0 1 1

26 20 23 21 23 24

27

16
9

15

20

0.9

14 7
2 5 7

1.5

12

13
4.2 2.2

11
4.7

01/05 06/10 11/1516/20 21/25 26/30 31/35 36/40 41/45 46/50 51/5556/60 61/6566/70 71/7576/80 81/8586/90 91/95 96/002001 2004 (*)

(*) 4-year average

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Prospective de la production ptrolire mondiale (first draft : final draft objective end 2006)
Production par pays ou Zones gographiques (hydrocarbures liquides naturels Pays de lOCDE 2005 USA Canada Mer du Nord Autres Sous total Pays de lOPEC 2005 Arabie Iran Irak Koweit Venezuela Algrie + Libye Nigria Emirats + Qatar Autres Sous total Pays non OCDE non OPEC

2005
8 3 6 1 18 9 3.5 2.5 2 2 2 2 3 1 27

2020
6 4 4 1 15 12 5 5 3 4 3 3 4 1 40

2050
3 5 1 1 10 7 3 4 2 5 1 1 1 1 25

2100
1 3 0.5 0.5 5 4 2 2 1 4 0.5 0.5 0.5 0.5 15

Russie et autres : Kazakstan, Azerbadjan, 36 Angola, Mexique, Argentine, Colombie, Brsil, Congo, etc Schistes bitumineux
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43

30

20

Total Monde GTep / mb/d 4 / 81

5 / 98

10
10

28 3.5 /octobre 2006 / 50 69 2.6

Gas-hydrocarbon discoveries and production worldwide

Gboe/uear (5-year average)

70
Deep sea (>500m)

65

60 50 40 30

Kashagan / Shah Deniz Classic exploration Liquid HC production

52

Sources: - Discoveries: IHS (excl. onsh US/Canada and GoM Shelf ) (May 2005) - Production: BP Statistical Review of World Energy (June 2004)

26

23 15
9 11

23
13

20 10
3 6 1 2 11 6

18 14
7 8

1614 15
3.9 1.4

2.2

01/05 06/10 11/1516/20 21/2526/30 31/3536/40 41/45 46/50 51/5556/60 61/6566/70 71/75 76/80 81/8586/90 91/9596/002001 2004 (*)

(*) 4-year average

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2000 2006 : a historical warning by ASPO

Are we here ?
A few peak oil websites
3w.peakoil.net 3w.aspofrance.org 3w.oilcrisis.com 3w.peakoil.com

ASPO France members (June 2006):

Jean Laherrre (formerly Total) Pierre-Ren Bauquis (fy Total) Carlos Cramez (fy Total) Jean-Luc Wingert Xavier Chavannes (Paris VII) Jean-Marc Jancovici (fy Envt) Alain Perrodon (fy Elf) Paul Alba (fy Elf) Maurice Allgre (fy IFP) Jacques Varet (BRGM) Adolphe Nicolas (Montpellier Uni) Jean-Marie Bourdaire (ex Total) Bernard Rogeaux (EDF)

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A reminder of previous PRB views about "peak oil"

1972
IFP report to United Nations by Brasseur-Masseron Bauquis about ultimate reserves. Publication in French in the "Revue de l'Energie" 50th birthday of the paper "What energies for medium terme (2020) and long term (2050)" in which peak oil is estimated to take place around 2020 for a world production of around 100 Mb/d (all natural liquid H.C.). Publication in English of a slightly expanded version in "la revue de l'IFP" plus versions in Spanish, German, Russian and Arabic. Publication by IFP School in "Les cahiers de l'Economie" of the paper "Quelles nergies pour les transports au XXIe sicle (in French and in English).

1999

2001

2004

In 2006 the author still maintains and clarifies his 1999 views as follows : date range 2020 (+ 5 years) world production level 100 Mbd (+ 5 Mbd) World oil price "stabilized" in $ 2000 at 100 $/bbl (+ 20 $)
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A new methodological approach of peak oil by Paul Alba and Olivier Rech (1)
Utilisation de la dynamique des phases et de la reprsentation f/c rf. note Paul Alba Olivier Rech du 13.10.2004 (30 pages). Reprsentations inities en 1994 par Paul Alba (ex Directeur des Etudes Economiques du Groupe ELF de 1985 1991). Poursuivies en 1999 par Olivier Rech dans son DEA. (actuellement Ingnieur Economiste lIFP).

Ce sont des mthodologies danalyse mathmatique de la forme des chroniques. (notions de trajectoires possibles, de pentes dynamiques, de paliers, de comportements asymptotiques et de convergence).
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A new methodological approach of peak oil by Paul Alba and Olivier Rech (2)
Ces mthodologies sont applicables au problme du peak oil rf. 1 : Article de P. Alba et O. Rech dans la Revue de lEnergie, n 561 de novembre 2004. rf. 2 : Prsentation dO. Rech lASPO (Berlin 2004). Formulation mathmatique de la production (yn) mondiale de lanne n (tn) supposant connues les RUR (Rserves Ultimes Rcuprables) et la production dune anne de rfrence (yo) au temps 0 (to) log yn = log yo + log yo + C (tn-to) e -1
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From global accumulated production to URR estimates for conventional liquids

Ultimate Recoverable Reserves

0.50
Growth rate

0.10
1945

1973

lope ve s i osit 3 : p ble rate 5-7 194 staina u Uns

Pessimistic scenario (2500 Gb or 342 GT) USGS (2000) (3345 Gb or 458 GT)

Optimistic scenario (4000 Gb or 548 GT)

1988 2004

0.09

0.45
0.01
CAS - PARIS IFP - Economic Studies Division

10

50

100

342

458

548

1000

1900

1923 1945
10

0.1

Accumulated production in billions of tonnes (log)

0.08
1

1973 28 octobre 2006

100 1000

16

From extrapolating the world accumulated production to the annual production curve

Ultimate Recoverable Reserves scenarios

5000

Pessimistic scenario (2500 Gb or 342 GT) USGS (2000) (3345 Gb or 458 GT) Optimistic scenario (4000 Gb or 548 GT)

Million tonnes

4500
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PARTIE 2

PRINCIPALES CONSEQUENCES DU PIC PETROLIER

la question du prix des nergies la question des transports

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OIL Prices 2005 2050 (Arabian Light in US $ 2000/bbl)

A dream view presented in Cambridge by P.R. B on 15/03/06

US$/bbl
250 200 150 100 50 0 2005 2011 2017 2023 2029 2035 2041 2047 2053 Oil Prices

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Annule et remplace

Conclusions about "peak oil" - 1

Since June 2006 it can be considered that views about Peak Oil in France have become reasonably similar :
TOTAL : Thierry Desmarest around 2020 / around 100 Mb/d ASPO France : J. Laherrre around 2015 / less than 100 Mb/d IFP : Y. Mathieu ondulated plateau 20150/2030 less than 100 Mb/d

This point of view is widely different from those among the "optimists" who believe that Peak Oil is not "reserves related" but a political problem : insufficient investments and restrictive policies about investments by OPEC countries, Russia and Mexico :

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Exxon-Mobil ongoing at ad. Campaign "no signs of peak oil" Aramco July 2006 "no reserves problems" BP : John Browne May 2006 - "There is no reserves problem" Mike Lynch (ex MIT) "similar and above 120 Mb/d" USGS, DOE, EIA, IEA 28 octobre 2006
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Conclusions about "peak oil" - 2

The work conducted by Paul Alba and Olivier Rech leads to the important conclusion that their optimistic view about peak oil is practically identical to PR. Bauquis view, i.e. : Peak around 2020 Peak around 80 Mb/d for conventional oil and around 100 mb/d for all natural liquid H.C. (oil).

Il est essentiel que l'IFP, TOTAL, les Universits ou les autres organismes de recherches consacrent plus d'efforts l'tude des pics du ptrole et du gaz. Ces efforts devront porter tant sur des mthodologies "top down" que sur des analyses "bottom up".

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conclusions - 3
La survenue du pic de production du ptrole (entre 2015 et 2025 trs probablement) puis du gaz (entre 2020 et 2030) vont modifier fondamentalement notre industrie. Aprs le pic du ptrole, les prix du ptrole et du gaz changent de logique : ils deviennent lis ceux de leurs substituts. Ds que le dclin s'amorce l'OPEP perd son rle de rgulateur des prix, mais peut garder d'autres fonctions .

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conclusions - 4
Le dclin du ptrole et du gaz durera tout au long du XXI me sicle et au-del. Ce sera paradoxalement l'"ge d'or" du ptrole et du gaz (prix levs et relativement prvisibles). Ce sera l'ge d'or pour les ptroliers mais aussi pour leurs fournisseurs et pour les entrepreneurs du secteur paraptrolier. Ce sera aussi l'ge d'or des "mariages" entre nergies fossiles, nergies renouvelables, et nuclaires.

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