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this decade, before beginning a decline in the post-2020 period. By 2030, supply has fallen below 2010 levels, and by 2035 it reaches 14.7 mb/d, just over 1 mb/d less than in 2010. The R/P analysis points to an accelerated decline in the post-2035 period for both OECD and developing countries, in terms of crude oil plus NGLs supply. Russia, the largest producer of conventional oil among non-OPEC countries, reaches a plateau of 10.4 mb/d in the Reference Case by 2020. The resource base is sufficient to maintain this plateau for several decades. This projection assumes that the fiscal regime will not be dramatically adapted to attract more upstream investments that would lead to higher annual output, which is possible given the resource base, followed by a steeper decline. Caspian supply, in particular from Azerbaijan and Kazakhstan, is expected to rise steadily over the entire projection period, with the Reference Case seeing crude and NGLs supply increase from 3.2 mb/d in 2010, to 5.5 mb/d by 2035. This assumes that bottlenecks in this region’s transport system are removed, and that additional export capacity is likely, which would allow for increased exports from these countries. The outlook for OPEC crude and NGLs was described in Chapter 1. The R/P approach has also been applied to OPEC Member Countries, both to test feasibilities and to glean broad inferences for the post-2035 period. Not only is the Reference Case outlook for OPEC supply of crude plus NGLs fully compatible with the resource base, the current assessment of the resource base is sufficient to sustain further increases in OPEC supply post-2035. 50 Nevertheless, in this longer term period, it should be noted that non-conventional fuels are likely to garner a larger share of production. Non-conventional oil (excluding biofuels) As already emphasized, non-conventional oil is expected to make an increasingly important contribution to liquids supply. Significant non-conventional resources exist throughout the world. Major examples include US shale oil and the oil sands of Alberta, Canada. However, the potential for future oil supplies from non-conventional sources will partly be determined by how production costs develop. The medium-term Reference Case outlook appears in Table 3.4. Canadian oil sands production dominates current non-conventional oil production, and the Reference Case sees supply continue to increase over the medium-term. On top of this, shale oil production in the US is currently experiencing a surge in activity, supported by robust oil prices. The combined growth of these fuels, together with some increase in CTLs, sees North America non-conventional supply rise from 1.7 mb/d in 2010, to 2.8 mb/d by 2015. Elsewhere, some increases in CTLs is expected, mainly from South Africa, China and Australia, with overall volumes almost doubling over the medium-term. 121 Chapter 3
122 Table 3.4 Medium-term non-OPEC non-conventional oil supply outlook (excluding biofuels) in the Reference Case mb/d 2010 2011 2012 2013 2014 2015 US & Canada 1.7 1.9 2.0 2.3 2.6 2.8 Western Europe 0.1 0.1 0.1 0.1 0.1 0.1 OECD Pacific 0.0 0.0 0.1 0.1 0.1 0.1 OECD 1.8 2.0 2.2 2.6 2.8 3.0 Middle East & Africa 0.2 0.2 0.2 0.2 0.2 0.2 Asia 0.0 0.0 0.0 0.0 0.0 0.1 China 0.0 0.1 0.1 0.1 0.1 0.2 Developing countries, excl. OPEC 0.2 0.2 0.3 0.3 0.4 0.4 Non-OPEC 2.0 2.3 2.5 2.8 3.2 3.4 Turning to the long-term, non-OPEC non-conventional oil (excluding biofuels) rises in the Reference Case by more than 6 mb/d over the period 2010–2035, to reach 8.4 mb/d by 2035 (Table 3.5). This increase is mainly from shale oil and Canadian oil sands. The rate of increase is slightly higher than in last year’s WOO; partly a reflection of the higher oil prices assumed. Despite the large oil sands resource base, production is characterized by a relatively low level of peak production, which is balanced by a slow rate of decline. Therefore, oil sands have a much lower and much longer production plateau than conventional oil fields. This will limit the rate of production increases over the longterm. Moreover, oil sands require additional external energy, such as natural gas, for production. This has implications for CO 2 emissions associated with the production of this oil. Thus, any move to introduce carbon pricing in the future would have direct implications for supply economics. There are also other constraints, such as transportation infrastructure and water availability. Shale oil has also been associated with a number of negative impacts upon the environment. Carbon emissions, groundwater pollution and high levels of water usage are commonly cited problems. Nevertheless, estimates of shale oil resources remain uncertain, but seem to indicate large technically recoverable volumes. Moreover, shale oil is not only found in the US, but also in Australia, parts of Europe, China and Russia. The expanding interest in this fuel points to a potentially significant contribution to future oil supplies (Box 3.1).
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Section One
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Chapter 1 World oil trends: overvie
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Box 1.1 Regulatory reform in the en
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commodities, the OTC market also in
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IHS CERA upstream capital cost MOVE
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in the strength of the dollar: in N
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to this, there is the dominance of
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Although these reduced growth targe
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Global and regional population leve
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average of 67% of the population in
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Table 1.3 Population by urban/rural
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Figure 1.8 Real GDP by region in 20
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Policies The Reference Case retains
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electric vehicles, which focuses on
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Box 1.5 Shale gas: recent developme
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40 years. While the early high perf
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Box 1.6 After Fukushima: unclear fo
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is Japan itself, which has been ask
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Figure 1.13 Fossil fuel use per cap
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Table 1.6 Medium-term Reference Cas
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Table 1.7 World oil demand outlook
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low, and well below levels seen in
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has also taken into account the pot
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stronger than previously expected s
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Page 111 and 112: 132 early support given to Brazil
Page 113 and 114: 134 the call on OPEC crude by 2035
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Page 117 and 118: 138 Figure 4.1 Table 4.6 Oil supply
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Section One

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