Deconstructing Peak Oil:
Assumptions Are The Key

Energy Intelligence

May 2009 - The steady rise in oil prices continues to raise increasingly widespread concerns about the onset of peak oil. Dr. Nansen G. Saleri, President and CEO of Houston-based Quantum Reservoir Impact LLC and former head of reservoir management at Saudi Aramco, presents a set of five peak oil scenarios in this article. Based on an analysis of the critical assumptions, he makes a case for a more optimistic set of projections for future global oil output.

The ongoing surge of crude prices well past the $100 per barrel mark is increasingly being taken by some analysts as a prelude to the beginning of the end for the oil era. By extension, the onset of irreversible declines of global crude supplies — the peak oil point - evokes great interest in the public mind given the obvious implications for an energydependent world economy. The purpose of this article is simple — to help transform the debate revolving around peak oil from one based on speculation and subjective interpretation into one anchored in the scrutiny of the key assumptions that underlie the many different viewpoints. Determination of the onset of peak oil, regardless of one’s individual beliefs, depends on four primary factors — global resources in place (including future discoveries), recovery efficiency, average rate of consumption, and state of depletion at peak. Thus, it all boils down to what specific assumptions are made regarding those four factors. Yet, most of the public discussion on peak oil avoids a thoughtful probing of key assumptions....

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