Annual Production with 2 Percent Annual Growth & Decline
1. To illustrate the effect of resource and production assumptions on production forecasts, EIA postulated 12 simple long-term world production rate scenarios designed to bracket the range of future production outcomes. The scenarios were based on the 95 percent probable, mean, and 5 percent probable USGS resource estimates (2,248 billion, 3,003 billion, and 3,896 billion barrels) and 4 annual production growth rates prior to the production peak (0, 1, 2, and 3 percent).
2. Each scenario addressed the question of when the peak year would occur for a given resource base and production growth rate.
3. A key assumption in estimating the peak production year is the shape of the production curve after the peak is reached (determined by the decline rate). The graph shows what happens if production both grows and declines at a rate of 2 percent per year until the 3,003 billion barrel mean resource estimate is recovered. In this instance, production is projected to peak in 2016.
4. It is unlikely that any single constant growth or decline rate would persist before or after the year of peak production. World oil production has sometimes increased very rapidly in the past (e.g., 7.8 percent per year from 1963 - 1973), but the recent growth rate has been slightly less than 2 percent. EIA felt that a different decline rate methodology is called for, and the next page illustrates the decline rate that was used in the EIA scenarios.