Reply #7: The Megaprojects DB is a good effort [View All]

But it still suffers from the optimism inherent in taking the producer's word for when the project will come on line and how much it will yield. Looking at the projected numbers for this year and the next compared to the historical numbers for the previous 5 years shows they are projecting the new oil supply to be double what it has been in the past. I just don't buy it -- the history of cost overruns, technical difficulties, delays and partnership failures in the last few years makes me suspect that the numbers for 08 and 09 will look pretty much like the historical numbers. There have been no output-doubling miracles in the oil industry that I'm aware of, everyone is still bitching about insufficient investment, and rig capacity has been maxed out all the way along.

My expectation is that production will start off with their "moderate decline" case (-4.5%/yr), but will add about half of what they are expecting in each of new projects, discoveries and unconventional. To my eyeball that would put the peak in 2009, with a gentle downslope to 2012 and then steepening to end up in 2030 at 45 mbpd. This is about what the EWG report forecasts (not surprisingly, since they use a similar approach) as well as Samsam Bakhtiari's WOCAP model.