The Physical and Economic Factors That Contribute to Uncertainty over Future Oil Production

World oil production from 1965 to 2011, and three projections for future production.
World oil production from 1965 to 2011, and three projections for future production. | Source

Uncertainty arises partly from inaccurate estimates of current reserves; Saudi Arabia's reserves in particular are subject to significant dispute. Further uncertainty arises from environmentally protected sites, such as the Arctic, which is believed to hold over 13% of undiscovered oil. It is uncertain when economic needs and demands for oil will trump the environmental protection and lack of enthusiasm to resolve land claim disputes, hence the time at which peak oil will occur is uncertain.

We do not know when, or if, peak oil will occur globally; it has already passed in some countries, including the UK, but despite it being a finite resource, the growth of renewable energy sources, and a governmental desire to diversify energy sectors to improve security, could reduce demand enough for the rate of consumption to never surpass the rate at which new sources are discovered.

The length of the delay until peak oil is also made uncertain by the possibility of new technologies creating new viable sources, as the USA has recently demonstrated with shale gas. In some cases, it is more to do with the price of oil; Canada's tar sands in Alberta are only viable when oil sells for more than around $70 per barrel, and so a growing demand would increase prices, and possibly reduce the delay before peak oil.

The converse situation appears to be true; whilst Canada is planning to expand its tar sands extraction, which already covers an area larger than Greece, other sources are unlikely to become viable in the near future, e.g. coal liquefaction, which requires very high oil prices, due to its high temperature and pressure process.

The rapidly rising population in countries such as India and Nigeria is likely to significantly increase demand, and therefore cause higher prices; high consumption rates could reduce the delay until peak oil.

Due to the number of variables, and the subjectivity of their intertwining effects, there is a large amount of uncertainty surrounding future oil production.

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Comments 2 comments

Larry Rankin profile image

Larry Rankin 5 months ago from Oklahoma

Interesting analysis.


BlossomSB profile image

BlossomSB 5 months ago from Victoria, Australia

An interesting article and also a reminder that our resources are not unlimited; we really need to invest more in our unlimited natural power.

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