Misleading Graphs

(11/25/2008) - Misleading or incomplete graphs are popular in all professions – in business, academia, and politics.  The peak oil community is no exception.  Here is a graph found in various incarnations at many peak oil sites:

This graph comes from PostPeakLiving.com. Similar graphs are found here, here, and here.

The graph above assumes at least two facts: 1) That global production of oil is peaking now or has already peaked. 2) That  future production will decline at a rate of 4%. 

The jury is still out on when oil production will peak.  If the economy continues to slide into recession, production will drop whether or not we have reached peak oil, just as it has during other periods of financial crisis.  In October 2008, OPEC cut production goals by 1.5 million b/d in an attempt to keep oil prices from sliding.  It is also unclear just how much oil is left in the ground.  We will know we have passed peak oil when producers attempt to increase production levels and can’t. 

The second assumption made by these graphs is arbitrary, dubious, and misleading.  PostPeakLiving portrays a 4% decline as a conservative estimate, claiming that, “Some large oil basins, like the North Sea or Cantarell in Mexico are in production free fall, losing as much as 18% and 36% of their production from July 2007 through July 2008.”

What they don’t say is that most individual oil fields or even oil-producing regions do not always decline in a regular fashion.  There are many reasons why oil production might dive over such a short time period - maintnence, politics, war, weather, etc.  Nor does PostPeakLiving mention the fact that rising oil prices will create opportunities to extract additional oil from declining fields that is currently considered inaccessible due to high production costs.

To get an idea of how fast world petroleum production might drop off after peak oil, lets look at the most oil-explored region in the world, where production has been in decline for decades: The United States.

Petroleum production in the United States peaked in 1970, and has since fallen at an annual rate of 1.74%.  Assuming oil production peaked in 2008 (the worst-case scenario), here is what global production will look like with a 1.74% rate of decline:

Of course, world production might drop off at two or three percent a year.  It might plateau for ten years before dropping rapidly.  I simply don’t know the answer – and neither do the people making these misleading graphs.  But uncertainty is not a good reason for cherry picking data and making unsubstantiated projections.  For now, I’m going to stick with graphs like those produced by Khebab at The Oil Drum.  They have something for everyone: