WORLD OIL FORECAST #6

Richard Duncan
8-30-01


ABSTRACT: World Oil Forecast #6 concludes the following: (1) 23 out of 44
nations [representing 99% of world oil production in 2000] have passed their
production peaks, (2) 3 out of the 7 regions of the world have passed their
peaks, (3) 4 out of 11 OPEC nations have passed their peaks, (4) Non-OPEC
production will peak in 2003, (5) OPEC production in 2017, and (6) world oil
production in 2005.

INTRODUCTION

World Oil Forecast #6 has just been completed for 44 nations comprising more
than 99% of the world oil production in 2000. I used 44 separate models and
the System Dynamics approach utilizing many different sources of numeric
information (i.e., data) including (1) oil discoveries [USGS, World Oil,
etc.], (2) reserve estimates [USGS, O&GJ, BP, etc.], and (3) production data
[BP, O&GJ, World Oil, etc.]. Notable advantages of System Dynamics include
(1) its large selection of simulation tools, (2) great flexibility, (3) ease
of modification and iteration, and (4) high precision.

In this Forecast #6 I consulted with petroleum geologists in North America,
Europe, and the Middle East for their first-hand experience and their
heuristic (i.e., qualitative) knowledge. I call this method “Computer
Augmented Intelligence” (CAI, for short) — it includes techniques I’ve used
(and invented) during the past 30 years while doing many different energy
projects.

Note: The CAI approach has nothing whatsoever to do with e.g., parabolic,
Gaussian, normal, or bell-shaped curves. Nor with Fourier or Laplace
transforms. Nor with …. etc. etc. It is an entirely new and, as far as I
know, unique approach to oil (energy) forecasting.

A PEEK AT THE PEAKS

Some important results of Forecast #6 are summarized below for 44 nations, 7
regions, OPEC, Non-OPEC, and the world. Two indicators are of special
interest: [1] the peak year of production for each nation, region, OPEC,
Non-OPEC, and the world, and [2] “EUR Used”: the ratio of Cumulative Oil
Production (Q at end-2000) and Expected Ultimate Recovery (EUR) expressed in
percent [%].

“Peak Year” means the historic or forecasted year of peak oil production.

“EUR Used” means the ratio of Q (at end-2000) and the EUR expressed in
percent [%]. Briefly put: When “EUR Used” equals 100%, then oil production
stops — forever.

————————————————————————
————————————————————————
REGION I: NORTH AMERICA —
Nation                Peak Year            EUR Used [%]        Comments
USA                    1970                    79.3                   1st nation to peak
Canada                2006                    48.1
Mexico                2005                    46.7
N AMERICA     1984                    69.1%                 1st region to peak
————————————————————————

REGION II: SOUTH AND CENTRAL AMERICA —
Nation                  Peak Year            EUR Used [%]        Comments
Argentina              1997                    62.7
Brazil                      2008                    23.1
Colombia               1998                    47.7
Ecuador                 2006                    43.9
Peru                        1979                    76.6
Trinidad                 1977                    71.5
Venezuela              1970                    51.6                   2nd OPEC nation to peak
S&C AMERICA   2008                    48.2%
————————————————————————

REGION III: EUROPE —
Nation                Peak Year            EUR Used [%]        Comments
Denmark               2000                    29.2
Italy                       1997                    55.3
Norway                 2003                    44.8
Romania                1976                    75.6
UK                         1998                    58.9           2nd peak came from tax breaks
EUROPE               1999                    52.9%                 3rd region to peak
————————————————————————

REGION IV: FORMER SOVIET UNION (FSU) —
Nation                Peak Year            EUR Used [%]        Comments
FSU                      1987                    60.4%                  2nd region to peak
————————————————————————

REGION V: MIDDLE EAST —
Nation                Peak Year            EUR Used [%]        Comments
Iran                      1976                    44.6                    3rd OPEC nation to peak
Iraq                      2036                    24.8                    OPEC
Kuwait                2035                    30.9                    OPEC
Oman                   2005                    43.5
Qatar                    2008                    35.8                    OPEC
Saudi Arabia       2019                    29.1                    OPEC
Syria                     1995                    48.8
UAE                      2026                    21.2                    OPEC
Yemen                  2006                    18.2
MIDDLE EAST   2020                    30.5%            Has 2% of world’s population
————————————————————————

REGION VI: AFRICA —
Nation                Peak Year            EUR Used [%]        Comments
Algeria                 2006                   48.6                      OPEC
Angola                 1999                   38.7
Cameroon            1985                   61.1
Congo                  1999                   35.5
Egypt                   1993                   63.3
Gabon                  1996                    47.7
Libya                    1969                    43.2                   1st OPEC nation to peak
Nigeria                 2007                   44.7      OPEC: “anarchy, filth, and brutality…”
Tunisia                 1983                   63.8
Eq. Guinea           2005                   14.5
AFRICA              2006                    46.1%
————————————————————————

REGION VII: ASIA PACIFIC —
Nation                Peak Year            EUR Used [%]        Comments
Australia               2000                    50.2
Brunei                    1979                    63.6
China                     2012                    40.0                    1.3 billion people
India                  1997/2006 (tie)       44.4                    1.1 billion people
Indonesia              1977                     69.4                    4th OPEC nation to peak
Malaysia                2006                    42.6
P N Guinea             1993                    39.2
Vietnam                  2005                    22.8
Thailand                 2006                    25.9
ASIA PACIFIC     2010                    47.8%             Has 60% of world’s population
————————————————————————

WORLD —
Category              Peak Year            EUR Used [%]        Comments
OPEC                         2017                   35.3%                72% of world oil exports in 2000
Non-OPEC                2003                   58.7%
WORLD                    2005                   46.5%
————————————————————————
————————————————————————

DISCUSSION

1. 23 out of 44 nations are past-peak; 24 if you count India (i.e., 1997 &
2006 are tied).

2. A few nations that I count as “past-peak” could — in fact — establish
new peaks in the future. Time will tell.

3. In contrast to Item 2, a few nations that are NOT counted as “past-peak”,
could — in fact — already be past-peak. Example: I forecast that Kuwait’s
peak will occur in 2035, however it’s actual peak may turn out to be 1971
when it produced 1.1 billion barrels compared to a mere 0.8 billion barrels
in 2000. Thus Kuwait would have to increase its 2000 level of production by
a whopping 37% to establish a new and higher peak. This may never happen.

4. 3 out of 7 regions are past-peak, and by 2010 all regions except the
Middle East will be past-peak.

5. In World Oil Forecast #1 (done in 1996 and presented at Princeton
University) I forecasted that the European peak would occur in 2000. Too
optimistic! It actually occurred in 1999.

6. The CAI method calls for one complete new oil forecast each year for each
nation, region, and the world. In this series of forecasts, each production
peak is tracked by a “phase diagram” (i.e., a graphical technique, not shown
here). For example: In Forecast #1 (done in 1996) through Forecast #6 (done
in 2001), I have predicted the world oil production peak six times as
follows: once at year 2007, twice at 2006, and three times at 2005
(including this Forecast #6, summarized above). Thus the annual series of
world oil forecasts is converging on the year 2005. That’s my best forecast
at this time

CONCLUSION

Industrial Civilization (IC), as it were, is now staggering at the brink of
a sheer cliff so that a strong gust of ill wind (e.g., depression spook
(many intuit what’s happening), collapse of the Sumo Giant (Japan), the
dot.com disease, resource and ethnic wars (e.g., Middle East, Macedonia, ad
infinitum), boatloads of refugees, etc.) could topple the global IC at any
time.

Richard C. Duncan, Ph.D. of the Institute on Energy and Man is the author of the Olduvai Theory.

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