I will repeat my response to the release of the March EIA numbers that showed production was down:

It is no suprise at all that demand was down in March. Spring turnarounds were in full swing, and refinery capacity was quite low at that time. You can see a graph of that here:

http://www.petrostrategies.org/Graphs/refineryutilization.html

But mark my words, production will climb from here for at least a bit longer. Mark that prediction down and file it away, and we can revisit it in the summer. You can call me out if I am wrong about that.

Refinery utilization in March was around 85%. I just read that as of a couple a weeks ago, it is back over 90% for the first time since the hurricanes. If more oil is being refinined, more oil is being purchased. If more oil is being purchased, more oil is being pumped. Look for the numbers to turn back up.

RR

Don't forget that the US uses only a quarter of the world's oil.

smekhovo, you are my new hero! :-)

To repeat your quote,
"Don't forget that the US uses only a quarter of the world's oil."

That surpises many people who do not follow the numbers, and puts the world oil situation in fuller perspective.  The impications are extremely important.  It means that changes of a percent or two in the U.S. alone has less of an effect on world price/supply than some believe.  it also shoots down the stereotype that it is only the U.S. that has a hefty appetite for oil and gas.

Does this mean that American conservation/efficiency/alternative energy initiatives are simply pizzing in the wind?  Anything but...

Despite the dreams of the one world of unity through open markets and "globalism" the world is still one of nation states.

As Chinese and Indian demand for fuel grow, and Europe is slung back into the fray of the international hunt for oil and gas by the decline of the Atlantic North Sea, the U.S. percent of world oil consumption will continue to drop.

And, here's the most fascinating part....if we put our educational, industrial and technical advantage to work, we can make efficiency gains and create conservation initiatives along with alternatives and push the U.S. percent of world consumption down even further.

What does that mean to us?  LEVERAGE.  If we are able to maintain one of the most modern and economically strong nations in the world while at the same time becoming more and more efficient, we put the American nation closer to economic independence.  Other nations not making the hard effort, and with even less home supply of oil and gas, and less land space will not be so able to be assertive to the same extent.

 This is already becoming apparent as China is forced to bend it's policy to suit Iran  (does anyone really think that China actually desires yet one more nuclear power in Southern Asia to dillute their own influence?), and India is forced to negotiate with Islamic nations including Pakistan in their quest for natural gas (does anybody think the Hindu majority want to have to do this, given the longstanding ethnic issues between these two groups?), and Europe is forced to kowtow to Russia to get natural gas, something that must be extremely insulting to them just as their great EU dream looked for one brief moment in grasp....they now see their influence and power slipping away.

THIS is the way to sell energy efficiency to the American business and political establishment folks, not with talk of "guess what, Mr. or Ms. Businessperson, change!!, and even if you do, your probably out of business, your kids will live a horrible life as a dirt farmer, and your suburban neighborhood will become a slum."   Does anyone think that message will sell to ANYONE?!  Even if it turns out to be true, we'll cross that bridge when we get to it....because if you can't prevent it, why change now?

Try THIS ONE instead: "Mr. or Ms. Businessperson, we have a rare opportunity right now to enhance the independence and prosperity for you, your company and your nation.  The U.S. is already down to consuming only 25% of the world's oil, and this is including the well known waste and ineffeciency burden we carry.  If we can make the changes now, and conserve fuel, it will free up your customers money.  If we reduce wasteful packaging, wasted transportation consumption, we become more  able to withstand the changes in the energy market, and enhance our competitive position in the world."

"Mr. or Ms. Businessperson, Would you buy a machine in your company that consumed twice what it needs to to do it's job?"  Would you hire ten people to do the job that five could do?"

"Our nation should not make the same error.  We should not consume 10 million barrels of oil if the same job can be done by 5 million!"

"This is normal good business practice to reduce waste and ineffeciency, to invest now for the savings to be gained over the years."

"This is not some liberal scheme Mr. or Ms. Businessperson, nor is some "enviro" goodie cause.  It is simply good business."

THIS is the way America can reduce our fuel consumption, from 25% to 20% to ???, 10% of the world consumption.

It is often said that "growth" cannot occur without energy consumption rising.  This is true only in the narrowest sense, but the effects of growth can and does occur through increased efficiency.  This is part of the old common sense approach to business that has been forgotten.  Enron type growth is not growth.  It is numbers stacking.  

Growth by groing twice the food with half the fertilizer, growth by operating stores with twice the efficiency on lighting, air conditioning, and  refridgeration, having trucks and trains that cover the same amount of miles carrying the same amount of cargo with half the amount of fuel consumed, THAT IS REAL GROWTH.  

Think about this:  If your sales double, but your expenses double, where is the real growth?

THIS is the way we sell change to America, with some hope of them buying it.
I guess this last sentence will be seen here as pure cheerleading, but I have no choice.  America is where I was born, and almost certainly where I will die.  It is the nation that made me what I am.  It is the nation that has given whatever I have in life.  
Do not make the often made error of giving up on America too soon.  We still have a few cards left to play, and a few sharp tools still in the shed.

Roger Conner  known to you as ThatsItImout

Wow, it makes me feel all warm and fuzzy knowing this country in which I live "only" consumes a quarter of the world's oil.  Wow, I guess we're not so bad after all.  Hell, that's almost sustainable, right?  LOL.

veganmaster,

" Hell, that's almost sustainable, right?  LOL."

That "almost" is the problem, that's why we sell the idea of bringing it down to 10% of world consumption!  :-)

Roger Conner  known to you as ThatsItImout

We have 4% of the world's population.
Thank you, Vegan and mr f, for pointing out the folly here.  It's a moral outrage that we use 25% of the world's oil.  I've certainly never before seen the word "only" used in association with that, let alone in a manner totally lacking in irony.  That we consume 5x 'our share' of the most important resource both allows and requires us to have the most and biggest guns.  And to use them.  Our consumption is gotten at the end of a gun.  I, too, grew up a proud American, and will no doubt die here.  But once I learned how things really work - in a nutshell, exploitation of the weak by the strong - the pride turned properly to shame.  We have raced ahead in the global game of chicken with the cliff, setting the worst possible example.  That the Chinese, Indians et. al. now seek to emulate us is at least partly our fault and also the worst possible outcome.  We should instead be seeking to emulate their simplest traditional ways.  Not only is consuming 25% not sustainable, neither is 10%, nor 1%.  It's a finite resource.  We'll have collectively burned it in the geologic blink of an eye.  Bully us.  Ain't we a brilliant flash in the pan.  I tend to see only the worst outcome, given our cultural denial and the insanity of our "leaders".  But for a ray of hope, read Daniel Quinn.  We - civilization - are not humanity.  That is the saving grace.  We need not alter all of humanity's actions.  Only that of the insane culture we occupy, that thinks consuming everything we can get our hands on can in any way be sustainable.  That's it.  I'm out.
I wouldn't call it a moral outrage.

When a bitch is nursing many pups, the stronger ones get more milk, the others get less and the runts often die. That is cruel, but it is natural. Though humans have tried to impose morality here and there, our world is largely still subject to cruel and natural forces.

Well, I would.  We are one pup suckling on five teats.  And by the way, I agree that the world is subject to cruel and natural forces.  There's a haymaker coming toward us.  Cover up!
IMO, morality is itself a natural phenomena, as natural as vice but for the well-being of humanity, and perhaps the planet, considerably more desirable.  So perhaps it is a question of which do we wish to cultivate--"natural" greed and arrogance or "natural" empathy and moral concern.  I vote the latter.  
"The Weak Shall Perish." - Species 8472

We can do our best to be moral, of course.

How 'bout just being rational - i.e. not destroying the ecosystem on which we rely for... um, everything... in a mad race to see who can exploit/produce/consume the most?
what are you talking about?  This isn't fun?
Which means it's possible for US consumption to grow even if production does not, as long as we're getting it at someone else's expence.  I'm not saying that is happening, but one cannot just look at the US consuption and world production  and assume they are directly related.
But mark my words, production will climb from here for at least a bit longer. Mark that prediction down and file it away, and we can revisit it in the summer. You can call me out if I am wrong about that.

I'm game. But you have to be more specific with numbers and time-frames. That is the only way 1) you can be given credit, and 2) we can pin you down when it comes time to call you out, 3) others know whether or not to support your positions. You are still too vague in your assessment, although I totally like your confidence and honesty. Ranges are fine.

At least this is my opinion. For the record, I agree with you.

I am in a bit of a hurry, so let me write fast. Specific predictions? There have been a number of comments here that indicate some people think we are already in decline. My specific prediction is that we will set more production records this year, indicating that we are not yet in decline. Preliminary April estimates have already indicated that 85 million barrels per day has been achieved. That number may get revised downward, but we will see 85 million barrels per day in the months following March. The wildcard is demand destruction. Demand is down. That will cause inventories to begin rising. Regardless, I see 85 million barrels as a pretty safe bet.

I believe that if demand remains strong, we have a pretty good chance of reaching 90 million barrels per day in the next 3 years, and I don't discount a peak in 3 years. It's just from where I stand, I can't see it clearly yet.

Why does this even matter? I am concerned that people will get too wrapped up in this "Peak is now" meme, and will be disappointed when we start setting new production records. They may lose faith in prediction methods, and lose interest in this debate. I am concerned that anti-peakers will just use this as ammunition that Peak Oil theories are in the same category as Astrology. I want to deny them that argument.

I am very, very concerned about Peak Oil. I am also concerned that we will lose credibility in the mainstream media by calling a peak too soon, only to see production continue to rise. It has already happened with some of the prominent peaksters. This subject is too important for that.

I won't be responding until evening, but I hope that is specific enough for you.

RR

Peak is going to happen because we keep moving more and more of our extraction units (rigs) to offshore locations where they teeter on hurricane-destroyable stilts. We can't keep marching out onto the continetal shelf forever.

I found this one statistics site that says US offshore was 16% of total domestic production in 2004. Does anyone know what percentage offshore extraction played in total global "production" and what the trend is for future years?

p.s. here is a telling spread sheet
USA offshore oil as a percentage of total from 1954-2004:
http://www.mms.gov/stats/PDFs/AnnualProduction1954-2004_May31-05.pdf
Oil insider to discuss looming Saudi crisis
Thursday, June 1, 2006
http://www2.townonline.com/cambridge/artsLifestyle/view.bg?articleid=5071

Matthew Simmons, veteran analyst and oil industry expert, will discuss his book, "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy," at Cambridge Forum Monday, June 12, at 7:30 p.m. at First Parish in Cambridge, 3 Church St., Harvard Square. A book signing, courtesy of Harvard Book Store, follows.

Simmons draws on more than 30 years of insider experience in the global energy industry to assert that Saudi Arabia's oil production could soon face a serious and irreversible decline. Rather than hope for the discovery of new petroleum resources, he presents a blueprint for the global economy as oil production declines.

What I don't understand about the optimistic predictions for world oil production is the age of the largest oil fields in the world.  Just consider Cantarell, the second largest producing oil field in the world.  It has an oil column of about 825', that is thinning at the rate of about 300' per year.

IMO, the HL method works--in Texas; Lower 48; Total US; Russia and the North Sea--because we are primarily plotting the rise and fall of one Gb and larger oil fields.  The smaller fields are mostly just statistical noise.  

To expect Saudi Arabia to show increasing oil production from 58% of Qt is to expect to see that which has never before happened.  Again, just look at the advanced age of most of the large oil fields in Saudi Arabia.

Everytime I get a little more optimistic, you slap me around with the cold reality that clearly says: peak is not only probably here, but due to the increased extraction technology, depletion rates are going to be on steroids.  I mean, I find some of the possible renewable resources fascinating and hopeful in theory, but how can you scale up such technologies if depletion rates are 5-20%?  Anyways, keep up the good work.
>What I don't understand about the optimistic predictions for world oil production is the age of the largest oil fields in the world...To expect Saudi Arabia to show increasing oil production from 58% of Qt is to expect to see that which has never before happened.  Again, just look at the advanced age of most of the large oil fields in Saudi Arabia.

That it. All of the largest fields that produce nearly half of all daily global production peaked more than a decade ago. All of them used water injection (or other Adv. recovery technics) to maintain oil output. If water injection or other advance Oil Recovery technologies were not used in these fields what would the global production be today? We have used technology to maintain production for the short term  at the expense of lower Ultimate Recovery and steep declines in the near future.

I believe the gamble was that we would find more oil using better discovery technics, but this never panned out. Then we resorted to over using natural gas to extract oil, produce GTLs, and by using gas fired power plants for electricity. But now natural gas supplies are also on the decline. All that left is coal which has production and transportation contraints.