331. SURGE IN OIL AND LIQUIDS PRODUCTION
The recent surge in oil and liquids production should be news in the peak oil world, but it's not. As a piece of optimistic information, it's a sore spot, and is being carefully avoided at doomer feedlots like TOD and peakoil.com. Nevertheless, Rembrandt has the new graphs up in the January Oilwatch Monthly, so lets break through the wall of denial.
For ordinary crude, the May 2005 peak stands, but just barely:
For liquids, we're clearly off the plateau and surging to a new level:
The latest liquids number from the IEA (Dec. 2007) is 87mbd, a new all-time high.
Looks like it's about time for another "prediction" from the The "Amazing" Boone Pickens:
“Never again will we pump more than 82 million barrels.”
-- T. Boone Pickens, 9th August 2004. On the Kudlow and Cramer Show, CNBC.
Source
“Global oil [production] is 84 million barrels [per day]. I don't believe you can get it any more than 84 million barrels."
-- T. Boone Pickens, addressing the 11th National Clean Cities conference in May 2005.
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"I don't believe that you can increase the supply beyond 84 or 85 million barrel as day."
-- T. Boone Pickens, on "CNN In the Money", June 25, 2005.
Source
"Supply is—you‘ve just about had it on supply; 85 million barrels a day world supply is about it. "
-- T. Boone Pickens, on Hardball with Chris Matthews, MSNBC, Aug. 26, 2005
Source
by JD
posted by JD @ 5:17 PM
17 comments
17 Comments:
But how can you not love a guy called "T. Boone Pickens"?! He's "the oil guy"! Funny how he never mentions peak natural gas.... One of those numbers has to be the production peak. Personally, I've chosen 95 million barrells per day with a really slowwwww delcine.
If you look at the way the North Sea peaked it had a really rapid build up then a slowing increase with a (small) spike up then a very slow decline then a collapse.
The slow increase, spike and slow decline period lasted around 9 years.
Since the north sea is one region and the world is (obviously) multi region, we are probably looking at an extended period of time on the plateau.
Given the north sea case and arguing from that as evidence it's fair to say that there could be three cases explaining what we're saying:
1. We're halfway through the plateau period now and will shortly begin a very slow decline and then fall off. (If true it means we have three years till we fall off). I am unconvinced this is where we are, however, because the north sea was on the plateau for nine years. How could it be that the peak for the world is sharper than that for the North Sea?
2. This scenario is that the width of the hubbert curve for the world as a whole is huge compared to that of the north sea and what we have seen over the last three years really needs to be seen from 30,000 feet. A three year dataset followed by a sharp increase isn't enough to go by so that we may really be just beginning the plateau or the peak is some years off if it's a sharp peak.
3. The doomer scenario: the peak is now and it's a sharp peak which we now fall off.
Personally my money is on #1 and #2 since statistically when you analyze a disparate group of data you always have a greater spread so it makes sense that the plateau will be AT LEAST as wide as the north sea and likely to be somewhat wider.
The interesting thing about this recent "surge" in liquid fuel production is that it's likely to be followed by other larger surges.
Peak oil doom theories attract the same kind of doomseekers as Y2K and the conspiracy theories. The world has supposedly been on the verge of crashing down for the past several hundred years. Some people crave that kind of perverse excitement.
Let's not be too optimistic though.
We have one larger surge in 2008 programmed in and a larger one in 2009. In 2010 and 2011 they decline again till in 2012 the "surge" is smaller than that of 2007.
By then we better have started mitigating post haste.
Optimistically though it seems *just* possible that the world's government have *clued in* and are taking the Hirsch report seriously.
i.e. they know peak is exactly five years from now and are thus on a burn to cure "global warming" as fast as they can.
So.... big recession, medium size pain, partly bumpy road down followed by recovery.
Also: A long shot something nobody seems to have picked up on at the oildrum about the tar sands etc:
Canada should have 5 mpbd on line sometime around 2012 or so.
What nobody is talking about is *Venezuela*.
The processes that work for Canada's godawful ultra-heavy brick hard "crude" should work even better for Venezuela's heavy crude which is *STILL* liquid.
In fact, industry estimates are that for example the SAGD process will yield 3-4 times the volume for venezuela's tar sands as for Canada's.
Note this: Venezuela currently produces less than a half million barrels a day of extra heavy crude and Canada currently produces around a million and a half.
With about the same amount of investment that Canada is about to put in to the tar sands, with the higher efficiency, don't you think it just *might* be possible that Venezuela can get up to at *LEAST* 5 mbpd like Canada?
If so, then there is such a thing as the Monroe Doctrine and I doubt that the Venezuelan crude will be going to China.
The US could run pretty well on 10 mpbd if belts were tightened.
This is offtopic but I think JD could write this new breakthrough in battery technology. Reasearchers in Stanford university have managed raise battery capasity up to ten times using nanotechnology.
It seems that it will help short term in mobile device business (laptobs, cellphone etc), but little longer term also EV vehicles.
wow, this is so short sighted. your graph has such a short time span to it.
Come on, show te graphs relating to the USA, UK and the North Sea.
Those are all "previews" of whats to come.
anon @ 1/30/2008 02:32:00 PM,
Correct. 3-4 trillion barrels in Athabascan 'tar' and Orinoco heavy oil. Recovery methods improving, costs declining.
All the more reason for those caught up in apocalyptic fantasies to pretend it away.
At least one whom predicted a 1.5 million barrel/day peak for Canada's production of unconventionals.
BTW, T. Boone used to be, well, kind of an oilman but runs an energy hedge fund now.
JD!! The guy who Talking Points his way through Peak Oil. What's your agenda, JD? Anyone who looks only at stats that they like while ignoring all others has an agenda.
1. Faulty logic: One year does not a trend make.
2. A nominal peak in 2007 - still not decided, if you were being honest. These numbers get revised, and are already undergoing revision. Latest I've read indicate no new peak in 2007, but very close. (On TOD.) - means nothing. Why not report on Hirsch's comments about a 4 mb/d range of the peak, which renders any peak in 2007 potentially meaningless? Unless that peak were actually outside a normally predictable range for plateau, it means little at this time. In fact, unless it is followed by much larger peaks later, it will always mean nothing.
3. Someone below said oil sands are expected to be 5 mb/d by 2012... fantasy. They are expected to be in that area by 2020 according to every report I have ever read.
4. According to the Hirsch Report, even your most optimistic, yet distorted and intellectually dishonest commenting, would still leave us with major issues to solve, yet you whistle past the graveyard. Unless peak is more than 30 years away AND massive mitigation and development of *clean* alternatives ensues, we are still screwed.
5. Your own supporting evidence shows a non-peak by one organization and a virtual tie with past peaks by another (and you ignore on-going revisions), but you claim this is clearly an important event showing a clear surge? Intellectually dishonest.
So keep in mind: ANY peak from now to 2030 is a major, major problem.
It is funny how the doomsters think everybody is a cad, unless an oil exec says he thinks the price of oil will go up.
Somehow, predicting shortages is not self-serving hogwash, when an oil exec does it?
World liquids production is going up, and unconventional sources growing most rapidly of all.
Meanwhile, demand is flat to down.
True, crude oil is controlled by Thug States, and that limits production. This is not geology, but lunacy in action.
Sheesh, even stable thug states in Iran, Iraq, Libya and Venezuela would put another 4 mbd on thye market.
But the long run (50 years) the thug states will probably be seen as having "banked" the crude for future use. We can hope the thug regimes pass on beofre then.
In the meantime, look for eroding oil prices in the next 20 years, and falling crude demand in the next 10 years.
Anonymous is right. There is simply gobs of heavy crude in Venezuela, enough in Orinoco trench to glut the world for years and years.
When will Chavez grow cement boots? Who knows?
This surge is no surprise for those who follow the megaproject schedules (one good report is Skrebowski's). You would think at 90+$ a barrel there will be a lot of investment to bring more production online. The same report indicates more surges are expected in 2008 and 2009; things get murkier after that.
As for 'demand going down' I don't see any evidence for that. According to the EIA numbers some 2 mbpd have been added in the last 2 months of 2007, and yet the price remains near 90$ in spite of the slowing US economy.
"and yet the price remains near 90$ in spite of the slowing US economy"
-------------------------
And US crude & gasoline supplies are heading for an all time record. Prices have nowhere to go but down.
The IEA and even EIA numbers are often reduced a few months after they are first reported. Several times the estimates have gone over May 2005 crude oil production levels, only to have dropped back down a few months later, explained as a 'correction'.
5m barrels of sands will not come online until 2020.If you think 2012 you better prop up some information:
http://en.wikipedia.org/wiki/Athabasca_Oil_Sands
The surge is great, but its the equivalent to getting lazy in between peaks. In the report, Oil goes to 74, in 2005, and down before it surges back up to 74 million barrels. That is called a ceiling, and you have to debunk it WILL go over that ceiling.
World liquids include liquid gas, and Boone Pickens is talking about oil, not oil + liquid gas.
Do you read these papers? My teacher showed harder caclulations in college. Please prove me wrong.
Well I know this for a fact, none of us and I mane none of us can predict what will happen in the future all we can do is speculate, but honestly I hate it when people (particually the doomers) say that we've no chance and blah, blah, blah.......It gets old fast. These guys act as though their word is that of the gospel in which they shant be wrong. But the fact is, is that they are just as clueless to the future of mankind as we. I see this as some good news it does shoe that we didn't hit global peak yet. And I wish people would stop assuming they KNOW everything. For all we know the Tar sands could key word being could bring 5 mbd in 2012. A lot can happen in four years. Technology does not stand still.
And so what if we are being "optimistic" since when has a pessimistic person, or a doomer ever got anything done for mankind? Really, folks we just don't know. I will say that the doomers could be right....COULD. We just do not know. So in conclusion for ANYONE who says that X will occur on Y is moronic and full of themselves. The Oil will peak one day of that I am certain, as we all are here. One cannot predit the future of all of mankind or even most of mankind for that matter.
P.S. If it's doom some of you seek, why don't you go and hang on to every last whime of Nostro. You know he did predict the world would end in 2012 A.D.
So be it, so it must be set in stone.
DISCLAIMER FOR IDIOTS: This site officially accepts that oil is finite, and will peak someday.
People who are saying that peak oil could happen soon are not Doomsday gloomies. When I mentioned that the tar sands wouldn't come online at 5 mil by 2012, I wasn't being pessimistic. I am only going by EVIDENCE.
And its not pessimistic to say technology won't save us. Maybe it could, maybe it won't. But you ALWAYS have a contingency plan in case it doesn't. Being an optimist, I am sorry, just isn't enough.
If you told Bill Belichick that Tom Brady could be injured by Friday but to not worry and be optimistic, he would smack you and begin a planning to use his backup JUST IN CASE ITS TRUE.
It would be one thing for someone to say our oil is running out because the sea monster is sucking it up through its gills. That would demonstrate unmitigated evidence of nonsense that not only can you not prepare for, you couldn't find it reasonable.
But knowing that peak oil could happen someday, and knowing that no one knows when it will happen, don't you think it is prudent to plan now just in case? This is the ideology behind almost every single bond leverage, mutual fund, insurance, and security industry in the world: I don't know what the future will hold, but lets create a system so we don't run our business through optimism and "winging it".
I trust technology, but you can't just trust it. SOmeone has to come up with a plan, others have to make sure the plan will offset peak oil, and there has to be examples of its success prior to the event.
No head of a company in their right mind with info a bump in the road for their industry will just say, "I know, but I am optimistic."
If someone is just optimistic with no plan, that is the equivalent to the childhood dreams of being guitar star with no guitar. Optimism is no substitute for work; show me the work that can mitigate the crisis. Whether in 20, 50, or 100 years: Show me a detailed plan to mitigate it.
I was optimistic that I was going eat Chinese food tonight. But I didn't PLAN and now the place is closed. Now I'm screwed and have to enjoy boxed macaroni. Optimism does nothing without work.
I am not doom and gloom. I want things to work, and I will support anyone who wants it to work. But don't give me optimism. Give me some evidence that mitigates the current evidence that there "may be" a crisis.
Give me evidence that everything is going to be ok. If you can't, I will do my best to make my own plan and have my own view just in case. I would rather be prepared ( or have my children prepared) than lazy optimism. I have done nothing in my life by just having a smile on my face.
Optimism is no substitute for work; show me the work that can mitigate the crisis. Whether in 20, 50, or 100 years: Show me a detailed plan to mitigate it.
umassmenus: You seem to be pretty overheated on the peak oil thing, and could probably benefit by taking a break from the websites to help you relax. However, let me give you a word on planning...
I've met a few people like you who need the "detailed plan", and I find you to be borderline neurotic. You need to seriously ask yourself this question: "Is it just me? Am I worrying too much?"
Planning is what they did in the U.S.S.R. They didn't let the economy just "wing it" like we do now under the capitalist system. They planned things out in detail 10, 20, 30 years in advance. And you know what? Their economy was a fucking basketcase. It turns out that the economy runs a million times better when you don't plan, and let the market figure these things out by itself. And that's exactly what we should do in the case of peak oil. Let the market sort it out.
A bunch of bullocks. One example of a communist country not planning. You forgot all of my examples that dove into planning on sports, planning with funding, preparation with the military etc.
The "Free Market" capitalism that you have clung onto forgets that there are many countries who did not keep their markets regulated and had gone through steep crashes ( The 90's Asian Crisis, The 90's Argentinian Crash, the Great Depression).
For every example you use on the positives of the Free Market, there are millions of examples of the disaster it can cause when no one regulates it. It only works to achieve the monopoly of the few.
The latter sentence I wouldn't be against if the hierarchies approached maximizing the developmental benefits of society, but they don't. And if the people with those most money don't have a decent hand in developing, then I can foresee a failure.
There is a difference between being neurotic and passing on information about what this site entails. Last time I checked, I think it is sane for someone to be passionate about a theory that civilization as a whole can be headed for hard times. Like I said, give me a reason not to think that, and maybe I wouldn't be so passionate otherwise.
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