There is concern that World C+C may decline steeply after the peak, I believe those concerns are over blown. There is always the possibility that there could be a severe recession due to high debt levels, high oil prices or potentially due to both problems in combination. War and environmental damage due to overpopulation are also potential problems which may lead to a crisis.
If none of these problems arises in the near term (say for the next ten years), and demand for oil is high enough to keep annual average oil prices above $75/b from 2018 to 2025, then the average annual decline rate of oil (C+C) output will remain under 2%.
For simplicity in the analysis that follows, I assume the peak in C+C output is 2015 and that output will decline at a relatively steady rate from 2015 to 2025. This in unlikely to be the case in practice and the actual path of future world output is unknown, the intention is to determine a likely trend line for World C+C output. Using quarterly C+C output data from the EIA, I constructed the charts that follow.
Data is from the International Energy Statistics page at the EIA website.
The “Big 14” oil producers from 2002 to 2015 are (in order from largest to smallest): Russia, Saudi Arabia, United States, China, Iran, Mexico, Canada, UAE, Venezuela, Kuwait, Iraq, Nigeria, Norway, and Brazil. The Rest of the World (ROW) is all other oil producers besides the “Big 14”.
All charts below (except the natural log charts) are in kb/d.
The Big 14 increased C+C output by about 8 Mb/d from 2010 to 2015.
For the ROW C+C output decreased by about 3 Mb/d from 2010 to 2015.
To consider decline rates we look at the linear trend of the natural log of output. For the ROW the average annual decline rate was 2.69% from 2010 to 2015.
The C+C output of the Big 14 increased at an average annual rate of 2.71% from 2010 to 2015.
As a very simple future scenario, I assume the ROW decreases at 3% per year and that the rate of increase of the Big 14 is zero. The chart below shows the scenario, with ROW output read from the right axis, output is in kb/d on both left and right axes.
If we look at the natural log of World output we can find the average annual decline rate for the scenario above over the 2016 to 2024 period, it is 0.63% per year.
The scenario above is very conservative, as oil prices rise above $85/b it is possible that the output of the Big 14 will rise at 0.52% per year (5 times slower rate of increase than 2010-2015) and that ROW might decline at an average rate of 2%/year on average over the 2016 to 2024 period.
That scenario results in a plateau in C+C output, chart below, ROW is read from right axis.
In either case, C+C output either does not decline at all for 8 years (optimistic scenario) or declines slowly at 0.6% per year in a conservative scenario.
I have also just posted a new Open Thread for non_petroleum discussions, please try to keep this thread focused on oil and natural gas related topics.