It is the rate of production of oil that determines  supply, NOT the SIZE OF THE RESERVES –  ‘The size of the tap, not the tank.’ 

Current data for the decline in oil fields’ production indicates that around 3 million barrels per day of new production must be added every year to sustain supply levels at their current levels. This is equivalent to finding another Saudi Arabia every 3–4 years.

Once conventional oil’s rate of loss exceeds unconventional oil’s rate of production, world production must peak. Production of sweet, light crude actually peaked in 2005 but this has been masked by the increase in unconventional oil production, and lumping together different kinds of material with oil and referring to the collective as ‘liquids’.

Fracking produces mostly shale gas (rather than oil), and the major growth in global ‘oil’ production has been from natural gas liquids (NGL; in part from shale gas). But the principal components of NGL are ethane and propane, so it is not a simple substitute for petroleum.

Oil production is predicted to drop by over 50% in two decades

Energy In, Energy Out: the remaining Oil is hard to get at, and needs increasing amounts of energy to extract

[My note: Charles A. S. Hall, one of the founders of systems ecology, believes you need an EROEI of at least 12 or 13:1 to maintain civilization as we know it. At the beginning of oil extraction, when most of our energy, bridges, sewage treatment, clean water delivery pipes, electric grid, and other absolutely essential infrastructure was built, the EROEI of oil was 100:1.  Now our century-old infrastructure is rusting and crumbling apart, and the EROEI of oil is already too low to replace it, let alone fix much of it].

A lower EROEI means that more energy must be invested to maintain output. As a rough comparison, conventional crude oil production has an EROEI in the range 10–20:1, while tight oil comes in at 4–5:1. Oil recovered from (ultra)deepwater drilling gives 4–7:1, heavy oil 3–5:1, and oil shale (kerogen) somewhere around 1.5–4:1. Tar sands is around 6:1, if it is recovered by surface mining, but this falls to around 3:1 when the bitumen is ‘upgraded’ by conversion to a liquid ‘oil’ substitute.

As conventional oil production has fallen, so has oil’s EROEI as we recover it from increasingly inhospitable locations, and with new technologies. The price of a barrel of oil has trebled over the past decade, but output has  flattened. We may be close to the ceiling of global oil production,² and the prospect of filling the gap with oil from alternative sources is daunting.

Even if we can extract large volumes of gas at a generous production rate, converting our transport system to run on natural gas would be a considerable undertaking, particularly given the timescale imposed by conventional oil production’s rate of decline. And there are many uses for oil and natural gas than to provide liquid fuels [my note: 500,000 products, i.e. all plastics and many other goods, have oil or natural gas as both a feedstock and the source of the energy used to make the product].

[My note: biofuels are the only possible substitute for oil that could directly be pumped into the trillions of existing combustion engines if the fuel created is equivalent to oil.  Ethanol is not a solution, most existing combustion engines can’t burn a fuel that’s more than 10% ethanol.  The EROEI of biofuels is NEGATIVE, ethanol plants are going out of business, and if you burned all of the plants including their root systems in the USA that wouldn’t even equal the energy produced by oil, and burning plants has a much higher EROEI than converting them to liquid fuels.   Scientific papers that find a positive EROEI are nearly always industry-funded and not peer-reviewed, so their data is unavailable to see how they came up with their conclusions. The best overview is one I wrote titled “Peak Soil: Why Biofuels are Not Sustainable and a Threat to America’s National Security” if you want to know more, such as the enormous destructive impacts of using plants for fuel on topsoil, greenhouse gas emissions, eutrophication of rivers, lakes, and oceans, depletion of aquifers, etc..

Replacing oil-powered vehicles with electric versions is an unlikely proposition, given the limitations of time and resources such as rare earth metals.³ The end of cheap, personal transport is a real possibility.

There are many uncertainties, but it seems clear that the age of cheap oil is over. We are entering a very new and different phase of human experience.

Chris Rhodes is an independent consultant based in Reading, UK