GLOBAL AND NATIONAL PEAKS IN OIL AND GAS PRODUCTION

Recent scenarios project global oil production peaking some time between late 2005 and 2040. These scenarios entail estimates of both long-term rates of global oil production and ultimate global oil recovery, and thus require economic market analysis as well as geologic resource assessment. Long-term consumption is best forecast as a range of scenarios, and ultimate oil recovery is best estimated as a probability distribution. Forecasts of the date of peak global oil production are problematic and may not form a sound basis for policy.

Forecasts of peak oil production for individual nations are less problematic, and often the forecasts fall within a narrow time period. Only a few oil-producing basins underlie most nations. Typically a few large fields account for most of a basin's production. Peak oil production in most nations coincides with peak production from their largest fields. These nations face a range of well defined energy policy issues.

Cantarelle field dominates Mexican production, and it contributes almost 25 percent of the national government's revenue. The field began to decline in 2005 at a projected rate of 10 percent per year for several years. The expected loss of revenue to the national government will create strains for Mexico and its neighbors.

Indonesia possesses 14 oil-producing basins. Production began in 1883 and peaked in 1996. Indonesia, a nominal member of OPEC, began importing oil in 2005 while selling gasoline at subsidized prices. Attempts to increase gasoline prices in line with crude prices have been poorly received. Attempts to foster increased oil exploration have met with mixed results.

Gas production scenarios follow the pattern of oil production, though global gas production is forecast to peak well after oil. Similarly, peak national gas production poses a range of well-defined policy issues.

The Groenigen field was the main source of gas for the Western European market in 1961, and was supplemented by later North Sea gas discoveries. These giant fields are declining, and new gas sources are being sought from several sources outside the EU.

Recent media attention focused on global energy forecasts suggest a range of alarming peak oil scenarios. In the coming years, however, near-term national energy production peaks are more likely to drive energy policy nationally and internationally.