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The decline of the age of oil

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Brian J. Fleay is remarkable for having written a book which, without his having access to anything like the same resources, parallels the findings of $US32,000.00 'The World Oil Supply 1930 - 2050' published by Petroconsultants of Geneva. The World Oil Supply' is a three volume work which draws on Petroconsultants' database on the upstream oil industry, which is the most comprehensive in the world and which they have been building since the 1950's. (P) Basically, the scenario outlined is that we have been using a meaningless and dangerously misleading method of calculating our future access to oil supply. The method generally employed has been to add up what is thought to be the total extractable reserves of oil in the world, and then divide it by the world's annual consumption. This is called the 'Reserve/Production Ratio', and gives a figure, in years, of how long we have until we 'run out' of oil. (P) The fault in this method is that it assumes that the remaining oil can be extracted at a continuous rate, as though the oil were sitting in some vast underground tank which we can simply drain until empty. In fact, the oil is held beneath the earth in porous rock, and relies on the pressure in the oil field for its flow up the well and into the pipelines. As the oil is extracted, the pressure drops and the flow slows down. Obviously, this can be aided by pumping, but this does not allow the same rate to be achieved. (P) Mr. Fleay argues that only a full audit of the world's oil supply, such as that carried out by Petroconsultants, including a history of the production from each of the many thousands of fields in the world, can start to give us a picture of where we stand. This is because our most immediate problem is not going to be the total amount of oil left in the world, but the declining rate of annual production against a background of burgeoning demand. If the normal laws of supply and demand are allowed to be the only thing to set our future price structure for oil, we're in for a rocky road. (P) Mr. Fleay's book is very readable, thought provoking and somewhat worrying. It is remarkable that the concerns he raises are not much taken into account by people discussing such things as the 'Greenhouse' effect, or by business people for that matter. In fact, because the issue of oil supply affects everyone on the face of the earth, this is a book which should not be left unread by anybody.