One year ago I was preparing the article ”Aviation fuel and future oil production scenarios”, (now published in Energy Policy) och i in November 2008 I was invited by IATA to Shanghai to a conference on the future of aviation fuel. In my presentation I discussed tourist aviation in the future and I mentioned that nations that invest heavily in expansion of air tourism, e.g. Dubai, would have considerable problems.
The company Dubai World is completely dependent on tourist travel to Dubai. The investments in projects such as artificial islands (shaped, among other things, to form a map of the world) and gigantic skyscrapers, were meant to be inhabited by rich tourists and business people that travel to Dubai by air. Even if the neighbouring emirate, Abu Dhabi, that has oil and money, gives new guarantees for Dubai’s debt, the fact remains that Peak Oil means that aviation cannot expand in future.
The investments that have been made in Dubai are based on prognoses similar to those that the International Energy Agency (IEA) makes every year. In this case what is important is not the latest edition of World Energy Outlook but the prognoses made 5 years ago. In 2004 the IEA considered that oil production in 2030 would be over 120 million barrels per day. The reality that we have now published in Energy Policy in our article The Peak Of The Oil Age is a maximal production of 75 million barrels per day in 2030.
In the future we will probably see many mistaken investments based on the overoptimistic prognoses from the IEA. The question is whether Dubai will be first of a long list.
(Swedish)
För ett år sedan arbetade vi med artikeln ”Aviation fuel and future oil production scenarios”, (nu publicerad i Energy Policy) och i november 2008 var jag inbjuden av IATA till Shanghai och till en konferens om framtidens flygbränsle. I mitt anförande diskuterade jag flygresor i framtiden och nämnde att länder som satsar på en expansion av flygresor, till exempel Dubai, skulle få stora problem.
Företaget Dubai World är helt beroende av turistresor till Dubai. Investeringen i konstgjorda öar, bland annat formade till en kartbild över världen, och gigantiska skyskrapor skall befolkas av rika turister och affärsmän som skall flyga till Dubai. Även om grannemiratet Abu Dhabi, som har olja och pengar, går in som ny garant för Dubai så kvarstår faktum att Peak Oil medför att framtidens flyg inte kan expandera.
De satsningar som man gjort i Dubai bygger på prognoser liknande de som International Energy Agency (IEA) gör varje år, och då gäller det inte årets upplaga av World Energy Outlook utan prognoser som man gjorde för till exempel för 5 år sedan. Då 2004 ansåg IEA att produktionen 2030 skulle vara över 120 miljoner fat om dagen. Den verklighet som vi nu publicerar i Energy Policy, the Peak of the Oil Age, anger en maximal produktion med 75 miljoner fat om dagen.
Vi kommer i framtiden att se många felsatsningar baserad på glädjeprognoser från IEA. Frågan är om Dubai kommer att bli först i raden.
Aleklett's Energy Mix 
Lars-Eric Bjerke
December 1, 2009
På transportstyrelsens hemsida publiceras årligen information om flygets utveckling. Man anger där kostnaderna för att producera en flygresa. Som exempel har kostnaderna för en resa mellan Göteborg och Stockholm varit ca 1000 kr under hela 2000-talet, trots att kostnaden för bränsle har ökat från 60-70 kr till 190 kr år 2008. För denna resa utgör alltså bränslet 20 % av kostnaden. På samma sätt som för bilåkandet gissar jag att det vill till stora oljeprishöjningar för att man skall få “rika” människor att ändra sina flygresvanor i varje fall på sträckor där det inte finns alternativ. Det krävs nog att man börjar beskatta även flygfotogen.
Bruce Stevens
December 3, 2009
Kjell,
As a petroleum reservoir engineering consultant, I have long been convinced of the PO argument. I saw you at Aberdeen University earlier in the year; of course, PO is not an hypothesis.
With respect to you comments on Dubai, I quote:
“In 2004 the IEA considered that oil production in 2030 would be over 120 million barrels per day”
This is factually incorrect:
Many comments from others on the IEA (and EIA) predictions in similar vein.
We would need to distinguish between PRODUCTION (SUPPLY)and DEMAND; see my comments on the ASPOUSA website:
”
By Bruce Stevens on November 24th, 2009 at 8:30 am
Whilst I am in full agreement with your excellent observations on CERA v most others, it is important to remember that neither the IEA nor the EIA are offering much is terms of SUPPLY. Both organisations have (historically) largely concentrated on DEMAND models (aggregated economic forecasts per country). Both (with the exception of IEA WEO 2008) assume implicitly or explicitly that ‘SUPPLY is plentiful’. They thus sidestep the SUPPLY problem created by PO and are still in denial on this.
Thus, the difference in 2030 is the difference in DEMAND, IEA = 105 v the SUPPLY, UPPSALA = 75 Mb/d. These 2 values are like apples and pears: they can not be equated; the difference is the essence of what is called Peak Oil”
I suggest that PO’ers, like both of us -if I may-, are right in suggesting 75 Mb/d SUPPLY, however, we do not pay enough attention to the IEA methodology, which almost exclusive concentrates on DEMAND from an economic modelling principle.
We do not need to compare the 105 to the 75 Mb/d, and then say why we think the 105 is incorrect. We need to point out that the 105 is DEMAND, not SUPPLY: therefore we have a shortfall problem called PO.
Kind regards
Drs Bruce Stevens
aleklett
December 6, 2009
Dear Bruce,
If you read what I wrote in 2004 you can find a tab le with “World oil supply in 2030” and IEA says that it will be 121.3 mbpd. I think that my statement is correct.
http://www.peakoil.net/uhdsg/weo2004/TheUppsalaCode.html
Bruce Stevens
December 7, 2009
Kjell,
I take your point and apologise. My statement was not clear enough. You are right about 2004. I amalgamated to thoughts. What I suggest is that the 2009 WEO and most other work of both IEA & EIA does almost exclusively focus on DEMAND. You -and most PO’ers- focus on SUPPLY. Therefore, that those 2 numbers don’t equate does not need to surprise. The difference is the looming crisis.
There is no pint in comparing the two reuslts as if they have the same meaning.
Kind regards
Bruce
Lars-Eric Bjerke
December 3, 2009
Bruce,
From WEO 2004 Chapter 3 it is obvious that IEA believed that the reserves were sufficient for oil demand growth to 121 mb/day in 2030.
“Summary of Projections
World oil supply is projected to grow from 77 mb/d in 2002 to 121 mb/d in 2030……Despite our assumption that oil prices will fall back after a peak in 2004,production is expected to continue to grow. Global oil production is not expected to peak before 2030, although output in most regions will already be in decline by then.”
It is obvious that supply of oil will be mainly driven by demand. However when supply becomes so expensive that demand decreases, thats when we get a peak. The highest peak will be “peak oil”.
inshasoft
February 21, 2010
Excellent Post, Keep it UP