Peak global oil production is about 25 years away, expert says

WASHINGTON — Far from being a nearly exhausted resource, the world's oil reserves are three times bigger than what some popular estimates state, and peak global oil production is about 25 years away, according to a new study by Pulitzer Prize-winning oil historian Daniel Yergin.

The remaining oil-resource base is about 3.74 trillion barrels, including what is estimated as yet to be discovered, according to a report released Tuesday by Cambridge Energy Research Associates (CERA), an oil-industry consultancy Yergin runs. That's more than three times the 1.2 trillion barrels that "peak-oil" theorists suggest.

The report, "Why the Peak Oil Theory Falls Down," challenges an increasingly popular view that the world is about to run out of oil. On the contrary, Yergin's firm says the world is likely to begin running out of oil between 2030 and the middle of the century.

Even so, the new report says, efforts are needed now to push that date back, such as new oil-field discoveries, new technologies, energy conservation and alternative-energy sources.

Peak-oil theorists warn that the world is on the cusp of a disastrous and rapid decline in oil production. A leading proponent of the theory is oil banker Matthew Simmons, who in the popular book "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy" suggested the world's top producer, Saudi Arabia, has entered an oil-production decline and will take the world down with it. In October, Simmons told a forum that the world might have reached peak oil production in December 2005.

The peak-oil theory has gained supporters since late 2004, when surging global demand for oil began tightening up available supplies and driving up world oil prices. The price hit $78.40 a barrel in July but has fallen to less than $60 a barrel in recent months.

The Cambridge Energy study debunks the so-called Hubbert Peak Oil theory, first espoused in 1956 by geologist M. King Hubbert.

Hubbert, working at the time for Shell Oil, predicted that world oil production would follow a bell-shaped curve in which production grows steadily until it peaks, followed by a rapid decline.

His theory preceded the exploitation of massive oil reserves in Alaska and the Gulf of Mexico.

That's why Yergin dismisses talk of peak oil.

"This is really the fifth time we've 'run out of oil,' " Yergin said Tuesday. He recalled past predictions dating back to 1880 of an end to production.

Yergin's views carry weight because he won the Pulitzer Prize for his 1991 book "The Prize: The Epic Quest for Oil, Money & Power."

Future oil supplies, the new report says, will be accessible by new technologies that permit drilling more than 7,000 feet below the ocean's surface or extracting oil from tarlike deposits in Canada.

"Ours is not a view of endless abundance of resources," said Jackson, cautioning that he doesn't want the findings to "distract us from addressing real issues."

Another source of optimism for the energy-hungry world emerged from another report this week, this one a technical paper from the Los Angeles-based think tank Rand. It concluded that up to one-quarter of the electricity and motor fuels consumed in the United States in 2025 could be produced from renewable sources, up from 6 percent today. For that to happen, the price of fossil fuels must remain high and the costs of producing alternative energy must keep falling.

Together, the two reports give hope that energy will be plentiful for another generation or more.

"I've never seen so much activity in terms of energy technology all along the spectrum," Yergin said. "I think the system is responding."