Worldwide Cheap and Heavy Oil Productions: A Long Term Energy Model

Crude oil, natural gas liquids, heavy oils, deepwater oils, and polar oils are non–renewable energy resources with increasing extraction costs. Two major definitions emerge: regular or “cheap” oil and non-conventional or “heavy” oil. Peaking time in conventional oil production has been a recent focus of debate. For two decades, non-conventional oils have been mixed with regular crude oil so that peaking time estimation and the rate at which production may be expected to decline following the peak are more difficult to determine. We propose a two-wave model for world oil production pattern and forecasting based on the diffusion of innovation theories. Historical well-known shocks are confirmed, and new peaking times for crude oil and mixed oil are determined with corresponding depletion rates. In the final section, possible ties between the dynamics of oil extraction and refining capacities are discussed as a predictive symptom of an imminent oil peak.