In his thesis, Steve makes projections of future oil, coal, and natural gas production, using approaches he developed that consider both supply and demand for each of these three fuels. He makes these estimates assuming three levels of reserves: low estimate, best estimate, and high estimate. In his analysis, natural gas is the fuel that offers the biggest future potential for energy supply, not coal.

Steve Mohr is a young man who recently received his Ph. D. in Chemical Engineering at the University of Newcastle in Australia. His Ph. D. thesis is titled Projection of World Fossil Fuel Production with Supply and Demand Interactions . We published an article of Steve's earlier, called Forecasting Coal Production Until 2010 .



Projection of World Fossil Fuel Production with Supply and Demand Interactions

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 energy. In order to plan appropriately for our future energy needs, a new detailed model of fossil fuel supply is required. It is critical to know whether fossil fuels will continue to be able to supply most of our energy requirements and meet the ever increasing energy demand in the future. This knowledge is essential for identification of possible periods of energy shortage so that alternative energy resources can be utilised in a timely fashion. 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. Also, 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 on realistic fossil fuel production projections.

The modelling applied an algorithm-based approach to predict both supply and demand for coal, gas, oil and total fossil fuel resources. Total fossil fuel demand was calculated globally, based on world population and per capita demand; while production was calculated on a country-by-country basis and summed to obtain global production. Notably, production over the lifetime of a fuel source was not assumed to be symmetrical about a peak value like that depicted by a Hubbert curve. Separate production models were developed for mining (coal and unconventional oil) and field (gas and conventional oil) operations, that reflected the basic differences in extraction and processing techniques. Both of these models included a number of parameters that were fitted to historical production data, including: (1) coal production in New South Wales, Australia; (2) gas production from the North Sea, UK; and (3) oil production from the North Sea, UK and individual states of the USA.

The combined supply and demand model included 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 fossil fuel demand and all fossil fuel production to change from the STATIC situation when there was a difference between the two. Finally, the INDEPENDENTLY DYNAMIC option was an extension of the DYNAMIC situation, but treated each fuel source individually when applying the supply and demand interaction, with both demand and production able to vary.

The model required estimates of Ultimately Recoverable Resources (URR) for coal, gas and oil, where the following definitions were used for each resource:

(1) Coal: anthracite - lignite;

(2) Gas: conventional and unconventional (tight, shale and coal bed methane);

(3) Oil: conventional (API>10o) and unconventional (natural bitumen, extra heavy oil, oil shale).

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 the 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).

The supply and demand model was used to obtain future predictions for individual and total fossil fuel production for a number of different scenarios, including CASE 1, CASE 2 and CASE 3 and STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC supply and demand interaction options. The following results were obtained:

Coal: For CASE 2 (based on the author’s best informed guess of URR), peak production year remained constant at 2019 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, with peak production varying only marginally between 212-214 EJ/y. Similarly, for CASE 1 (based on the lowest recent URR estimate), peak production year was the same at 2014 for all three demand-production interaction options. However, for CASE 3 (highest recent URR estimate), there was some variation in the peak production year at 2020, 2019 and 2030 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options respectively. Of interest also, was the projected peak in Chinese production, accounting for well over a third of the total production, occurring between 2010 and 2018, which compares with reported literature values in the range of 2015-2033.

Gas: For CASE 2 (URR best guess), peak production year varied from 2028, 2047 and 3034 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The corresponding peak production outputs were 145, 157 and 143 EJ/y. For CASE 1 (lowest URR), peak production year varied from 2019, 2033 and 2026, respectively, for the production interaction options. For CASE 3 (highest URR), the peak year range was much narrower, varying between 2060 and 2062. The overall range of between 2019-2062, was much wider than that reported in most of the literature of 2020 ± 10 years. While it was found that the production of unconventional gas was considerable, it was unable to mitigate conventional gas peaking.

Oil: For CASE 2 (URR best guess), 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 (lowest URR), peak production year was the same at 2005 for all three supply and demand interaction options. For CASE 3 (highest URR), peak production year varied only slightly at 2019, 2011 and 2016 for STATIC, DYNAMIC and INDEPENDENTLY DYNAMIC options, respectively. The important outcome was that, of all scenarios, the latest peak year was 2019.