How will the Next 54 Years Play Out?

I can only imagine, the models built, to forecast the growth rate in the consumption of oil. Considering the multi-variable model, exhausts my cognitive ability.

I’m sure more resourceful men than I, have studied the problem deeper.

However, every now and again, I like crunching some numbers. You know, ball park, back of the number type stuff.

If the entire world, consumed oil at the rate the US does per capita, we would consume 411 M bbl/day. 4.8x, the current rate of consumption.

If the people who reported income in Canada, all shouldered the cost of the country’s oil consumption, at $73, 9% of the median income in Canada was spent on oil.

If the cost of consuming oil on the planet was shouldered by every person equally, and if the average income per person on the planet is in fact $10,500 then 3.08% of income is spent on oil.

Without population growth, and assuming constant growth in consumption (equal to the growth from 2004 to 2009, which is approximately equal to the growth rate of liquid production between 1958 to 2008), it would take 37 years for China and India to be consuming just as much as the world does now. Right now, they account for 1/8th of the total consumption.

Wikipedia, estimates 54 years remain before the current reserves of the 17 countries with the highest reserves, run dry. They calculate that, with today’s production data. Of course, this will be true, if production levels stay flat and new reserves are not found.

If China and India’s consumption, grow at the rate used above, for 33 years and the rest of the world continues consuming oil at the rate it does today, then world will be consuming about 118 bbl/day in the 33rd year. Integrate that data, and the total barrels consumed would be ~1.27 T barrels. There are 1.24 T barrels in reserves. So, not only does technology have to start extracting oil quicker, than it can today, but it also has to find more, otherwise – we’re 33 years from a very very dry well.

This back of the napkin goes out the window, if a country or two gets blown up.

The next time oil moves up $25, it will never look back.