Fossil Fuel Production with Supply and Demand Interactions

Steve Mohr has published his Thesis at the University of Newcastle, Australia:
Projection of world fossil fuel production with supply and demand interactions

Abstract

Historically, fossil fuels have been vital for our global energy needs. However climate change is prompting renewed interest in the role of fossil fuel production for our energy needs. In order to appropriately plan for our future energy needs, a new detailed model of fossil fuel supply is required. It is critical to know if fossil fuels will still be able to supply most of our energy requirements and meet the ever increasing energy demand in the future. Answering these questions is critical in order to identify potential periods of energy shortages; so that alternative energy resources can be utilised in a timely way. The aim of this study was to develop a model to predict fossil fuel production for the long term based on historical production data, projected demand, and assumed ultimately recoverable reserves for coal, gas and oil. Climate change is an important issue confronting society, and it is hoped that the work contained in this thesis will aid climate change modeling by focusing attention to realistic fossil fuel production projections. Fossil fuels are currently an essential component in the global economy and the growth of the human population. The fossil fuel production projections from this study suggest that many of the IPCC fossil fuel projections appear overly optimistic. Based on the assumed URR values, it is predicted that global fossil fuel production will peak before 2030. For this reason, it is imperative that appropriate action be taken as early as possible to mitigate the effects of fossil fuel decline, to avoid energy shortages in the near future.

Conclusions (excerpt)

The combined supply and demand model includes the capability that demand and production could be influenced by each other, i.e. if production could not meet demand then future demand for that energy source was reduced. In this study, three options were considered. Firstly, the STATIC option resulted in demand and production acting independently of each other at all times. Secondly, the DYNAMIC option allowed both total demand and total production to change from the STATIC situation when there was a difference between the two. Finally, the INDEPENDENTLY DYNAMIC option was an extension to the DYNAMIC situation, but treated each fuel source individually when applying the supply and demand interaction, with both demand and production being able to vary.

The model requires estimates of Ultimately Recoverable Resources (URR) for coal, gas and oil. Following a critical review of the literature, included in this study, three cases were adopted. CASE 1 and CASE 3 being lowest and highest recent estimates, respectively, and CASE 2 being author’s best guess based on the information available. The URR values for CASE 2 were, total (60,800 EJ), coal (19,350 EJ), gas (17,680 EJ) and oil (23,780 EJ).

Oil: For CASE 2, peak production year remained almost constant at 2011-12 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 179–188 EJ/y. Similarly, for CASE 1, peak production year was the same at 2005 for all three supply and demand interaction options. For CASE 3, peak production year varied only slightly at 2019, 2011 and 2016 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The important outcome was that for all scenarios the maximum peak year was 2019.

Combined fossil fuels: For CASE 2, peak production year remained almost constant at 2016–18 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 509–525 EJ/y. Similarly, for CASE 1, peak production year was essentially same at 2012–13 for all three supply and demand interaction options. For CASE 3, peak production year varied from 2021 to 2029 across the three supply and demand options. In all scenarios it was found that natural gas offers the biggest future potential, and not coal.

[via Energy Bulletin]