energy economist | The Second Half of the Oil Age and Related Issues of the Peak Oil

Colin Campbell, a noted analyst in the field, calls the new era of global oil supply that we are entering ‘The Second half of the Oil Age’.
Given that for the century and a half of the ‘First half of the Oil Age’ the world used primarily conventional oil from oil fields, what would indicate the start of the ‘Second half’?
There are several candidates to mark this transition point.
Arguably the ‘Second half’ starts where the world’s ability to increase production of conventional oil becomes insufficient to meet its increasing demand for oil.
It is true that currently some of the conventional oil that could come to market is being held back by some suppliers,
but taking this constraint into account and also recognizing that most suppliers of conventional oil are now past their ‘mid-point peaks’ in production,
for some years now the world has required increasing production of the non-conventional oils to make up for what conventional oil in fields cannot supply.
This in turn pushed up the price of oil since 2005 to levels that damaged global economic activity.
A later point for entry into the ‘Second half of the Oil Age’ is when the global production of conventional oil stops increasing and goes into decline,
driven primarily by lack of recoverable resource of this type of oil.
the increased production from the non-conventional oils must not only be enough to meet increased demand, but also to offset the decline in the production of conventional oil.
This leads to the final point in time where entry to the ‘Second half of the Oil Age’ becomes apparent.
the expected fall in the global production of conventional oil, once past its ‘resource-limited’ peak, is likely to be of the order of 3 % per year.
It is not clear that production of the non-conventional oils can take up the slack, nor at what price; and a number of forecasting models suggests that this may not be possible.
If this is indeed the case, i.e., if insufficient non-conventional oil production comes forward, then global oil production in total declines, and the ‘Second half of the Oil Age’ is well and truly here.
The term “peak oil” expresses the idea that resources of mineral resources such as petroleum will in the near future be in short supply if not totally exhausted.
As shown in the Fig. the basic idea is simple: global population is increasing exponentially and if it continues to grow, the demands of this expanding population will inevitably consume any natural resource, which manifestly is finite.
The notion that we will run out of natural resources, including metals, is not new.
Malthus, in his celebrated article written in 1798 predicted that the increase in human population would rapidly exhaust supplies of food and natural resources, and the theme has been revisited many times since then.
In the report of the ‘Club of Rome’ published as the book “Limits to Growth”,
also used a model in which human population and consumption of resources increased exponentially while the rate of discovery of new resources increased at best linearly.
The consequence, if the assumptions are correct, is rapid depletion of these resources.
According to the more pessimistic prediction made in 1972 global supplies of copper would now have become scarce, of not totally exhausted.
Clearly this has not happened—copper is still mined in deposits all over the world in amounts that satisfy global demand.
In 1972, the total amount of copper known to exist in clearly identified and readily exploitable deposits was sufficient to ensure supplies,
Economics of Petroleum, Principles
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