From Oil-based Technology and Economy – Prospects for the FutureDanish Technology Council and IDA, March 2004 (Author Klaus Illum)

FromMatthew R. Simmons:Twilight in the Desert.The Coming Saudi OilShock and the WorldEconomy. (2005)

Production from Danish North Sea fields. Danish Energy Authority 2002 and 2005

In Oil-based Tecnology and Economy – Prospects for the FutureThe Danish Technology Council and IDA, March 2004. (Author Klaus Illum)

Scenario S1Implications of the assumption made in the WEO2004 Reference Scenario

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'2002' '2007' '2012' '2017' '2022' '2027' '2032' '2037' '2042' '2047' '2052'

Gb

/yea

r

'Demand ' 'Prod.total ' 'Conv.prod.exist ' 'Non-conv.prognos. '

'Conv.prod.new ' 'New findings ' 'Non-conv.requir. '

"Demand"

Total production

Production from exist. conv. reserves

Production from new conv. reserves

Reserve additions (conv.)

Non-conv. production. Forecast

Non-conv. ProductionRequired

Demand growth 1.6% per year

Ultimate reserves (conv.): 2855 Gb

Reserve additions (conv.): 20 Gb/year (first years)

Scenario S1

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'2002' '2007' '2012' '2017' '2022' '2027' '2032' '2037' '2042' '2047' '2052'

Mb

/day

'Middle.East ' 'FSU ' 'Latin.America ' 'Africa '

'North.America ' 'Europe ' 'Asia ' 'Other '

'New conv.capacity ' 'Non-conv.capac.prog ' 'Non-conv.capac.req '

New conv. capacityAll regions Non-conv.

capacityRequired

Non-conv. capacityForecast

Middle EastExist. reserves

Implications of the assumptions made in the WEO2004 Reference Scenario

Production capacity by region

Scenario S2

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'2002' '2007' '2012' '2017' '2022' '2027' '2032' '2037' '2042' '2047' '2052'

Gb

/yea

r

'Demand ' 'Prod.total ' 'Conv.prod.exist ' 'Non-conv.prognos. '

'Conv.prod.new ' 'New findings ' 'Non-conv.requir. '

"Demand"

Total production

Non-conv. ProductionRequired

Non-conv. production. Forecast

Reserve additions (conv.)

Production from exist. conv. reserves

Production from new conv. reserves

Demand growth 1.9% per year

Ultimate reserves (conv.): 2660 mia. tønder

Reserve additions (conv.): 16 Gb/year (first years)

Scenario S2

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'2002' '2007' '2012' '2017' '2022' '2027' '2032' '2037' '2042' '2047' '2052'

Mb

/day

'Middle.East ' 'FSU ' 'Latin.America ' 'Africa '

'North.America ' 'Europe ' 'Asia ' 'Other '

'New conv.capacity ' 'Non-conv.capac.prog ' 'Non-conv.capac.req '

Non-conv. capacityRequired New conv. capacity

All regions

Non-conv. capacityForecast

Middle EastExist. reserves

Production capacity by region

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45

2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

2000 mia. tønder tilbage i 2005 (*)

1000 mia. tønder tilbage i 2005 (*)

Store nye reserver findes i de kommende

Mindre nye reserver findes i de kommende år

Vækst2% om året

Mia. tønder/år

Med en vækst på 2% om året bliver der i de næste 14 år brugt 500 mia. tønder

Det er halvdelen af den mængde, der blev brugt i de sidste hundrede år

Nu er forbruget så stort, at går det rigtigt stærkt:

(*) + 750 mia. tønder fra naturgaskondensat, tjæresand m.m.

år

Fra Klaus Illum ”I Drivhuset”, udgivet af 3F, marts 2006

”The industrialised world is built on cheap energy.…..Now the cheap fossil-fuels fiesta is ending, climate change is upon us, and our models of global industry, commerce, food production, and transportation may not survive”

James Howard Kunstler: The Long Emergency. Surviving the converging catastrophes of the twenty-first century. (2005)

The longer the oil industry succeeds in meeting a growing demand – i.e. the more the global economy becomes depending on oil – the worse the situation when oil production capacity can no longer meet demand.

The higher the rise, the steeper the fall.

Therefore, common sense dictates that hundreds of billions of dollars be spent on investments that make the world economy less dependent on oil, rather than spending the money on investments in additional oil production capacity.

Conclusions:

I samtlige beregninger, der udarbejdes til at vurdere langsigtede energi- og klimapolitiske tiltag, baserer Energistyrelsen sig i lighed med mange andre IEA medlemslande på agenturets forudsætninger om den langsigtede råoliepris. IEA har gennem mange år opbygget et internationalt ry for at levere solide og kompetente analyser af den mulige udvikling i olieproduktion og –forbrug.

Alongside many other IEA member countries, the Danish Energy Authority relies on the agency’s long-term crude oil price forecasts for all computational assessments concerning long-term energy and climate policy. The IEA has through many years gained an international reputation of providing well-founded competent analyses of the potential development in oil production and demand.

The Danish Energy Authority, 14. March 2006. On www.ens.dk

Well, let’s have a look at some IEA projections

Energistyrelsen, 14. marts 2006. På www.ens.dk

2004:

IEA WEO 2004 IEA WEO 2005

Crude oil price projections

”In all, it does appear that with current market fundamentals, $60 is, in effect, a pretty low price."

Paul Horsnell of Barclays Capital Inc., London. OGJ, March 16, 2006

IEA WEO 2006 ?

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2005 2010 2015 2020 2025 2030

Mb/day Global oil consumptionIEA projections 2004 and 2005

REF2004

REF2005

ALT2004

ALT2005

Reference scenario and Alternative scenario

Growth 2004 - 2030:

REF2004: + 41.3 Mb/day

REF2005: + 33.2 Mb/day

Difference ALT - REF in 2020: - 10%

IEA, WEO 2004

But, in WEO 2003, p. 107-108: Continued consumption growth at 1.6% p.a.”implies a decline in the global proven reserves to production ratio fromaround 40 years to under 20 years in 2030”. When the R/P ratio is under 20 years, production is most certainly declining.