The end of the era of cheap oil A decisive factor in Climate Change Miltos Tsoskounoglou Environmental Affairs & Health and Safety Manager Toyota Hellas October 2008

According to current trends, within the next generation….

World population will increase by 30% +30% 8300 6400 2030 2005

World GDP will double

World car parc will double

World oil demand is expected to rise by 50% +50%

CO2 in the atmosphere will have risen considerably, making Global Warming worse

What is missing from the picture is that by then Oil production will have gone past its Peak

Technology has advanced in great strides. However….

Discoveries of new oil reserves have fallen steadily since the peak in 1965 – we are currently consuming 3 barrels for every new one discovered Past Discoveries Production Expected discoveries This shows the world situation. It is the most important slide I can show you. ExxonMobil deserves huge credit for publishing it with good data and revisions properly backdated to discovery. World discovery has been falling relentlessly for 40 years. There is no good reason to expect the trend to change direction. Consumption, shown in black, exceeded discovery in 1981, and the gap is widening. Take a good look : it says it all. Source: ExxonMobil

Existing production declines worldwide by ~4% p. a Existing production declines worldwide by ~4% p.a. New supply equal to that of Saudi Arabia is needed every 3 years just to cover for depletion IEA Medium-Term Oil Market Report 2007 : “Industry needs to generate 3.0mb/d of new supply each year just to offset decline.” Source: ExxonMobil

In the USA, no new technology, no increase in prices, no discovery of major new fields was able to reverse the fall in oil production after the Peak was reached in 1971

We will not “run out of oil” but, like the USA, world production will reach a Peak, after which point it will irreversibly start to decline

The Peak will be reached in the next few years – some claim we have already reached a “plateau” Source: Bauquis P.R., 2006

Production data shows that over the last 3 years world conventional crude oil production has hardly increased

Non-Opec crude oil production seems to have already reached a “plateau”

World unconventional liquid fuels production is rising slowly & accounts for 14% of world liquid fuels supply

World liquid fuels production has increased hardly at all according to EIA , or slightly according to IEA

Price fluctuations can be explained by basic economics: by the inability of supply to meet increasing demand and by the oncoming world recession which is lowering demand for oil

Emissions of CO2 and Climate Change will be influenced by Peak Oil

Peak Oil is sending strong market signals influencing not only the cost of oil but the cost of energy which leads to actions   If greater energy efficiency  If more biofuels and renewables  If substitution by other liquid fuels (unconventional oil, synthetic liquid fuels)  X

And to make things even more difficult, there are signs that Peak Natural Gas might also not be far off Source: ASPO, C. Campbell

Thank you!