<A Letter from the TOD Editors Box... The Oil Drum DrumBeat: July 27, 2006>

146 comments on IEA Supply Creeping Up

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Halfin on July 27, 2006 - 1:32pm Permalink | Subthread | Parent | Comments top
The play-money Foresight Exchange game, http://www.ideosphere.com/ , has been going on since 1994 and lets people bet on various future events. They have a number of Peak Oil related claims and we spent some time trying to hash out the definition of the peak. It's tough because there have been peaks before, the biggest being around 1980, and we were trying to come up with something that would distinguish from them. In the end we gave up and just ruled that the "new" peak would have to happen after 2004.

The definition is two consecutive years of 3% declines in production. In retrospect that may have been two strict - we could see something that historians would eventually recognize as a peak without seeing these kinds of declines until much later. Or it could be too weak - we could have a severe two-year recession/depression and have such declines, before bouncing back to higher production than ever. It's tough to come up with a clear definition. Like the fall of the roman empire, it's something that can really only be declared in hindsight.

See the claim at http://www.ideosphere.com/fx-bin/Claim?claim=pkyr20 . Trading prices predict a peak (as defined above) in 2010. (That is, 2011 production will be 3% less than 2010, and 2012 will be 3% less than 2011.)

(http://www.newsfutures.com/pdf/Does_money_matter.pdf provides evidence that play-money prediction markets can be as accurate as real-money ones.)

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Freddy Hutter on July 27, 2006 - 3:18pm Permalink | Subthread | Parent | Comments top
Your 3% threshold would have declared a Peak in 1982 based on 1980 & 1981 declines.  Again a Peak would have been declared in 1983 based on '81 & '82 declines. After that episode, the largest of the five next annual shortfalls was 1.06% in 1999.
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Darwinian on July 27, 2006 - 6:02pm Permalink | Subthread | Parent | Comments top
There have been many times in the past when the taps were shut down deliberatey, or becase of political reasons. There was Iranian revolution and the Iran-Iraq war that caused OPEC production to drop. Then there was the collapse of the Soviet Union. Then OPEC, in about 1999, cut back on production because of low oil prices.

But now every nation is producing flat out, except perhaps for Nigeria and a few barrels in Iraq. But the point is a drop in production right now would be caused almost entirely by depletion, not by political reasons.

That is the difference Freddy.

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GreyZone on July 27, 2006 - 4:32pm Permalink | Subthread | Parent | Comments top

Halfin, please take note of the following graph:





This is the month by month oil production for the lower 48 US from 1969 to 1973 (2 years pre-peak to 2 years post-peak). Note that it is very noisy. Note that it is very hard to distinguish the peak in there.

Now, here is another view for you to consider of the same 5 years. This makes it even more obvious how hard it is to spot peak on a month-by-month basis, which is why I call BS on Freddy Hutter's crowing about any single month's change. Actually seeing peak will only be possible by looking backwards. Any crowing now, either way, is just a guess.

Note that the YELLOW data set in the second graph is the peak YEAR but that the prior year actually had months above any of the peak year months.





Here's the CSV data for those five years using month-by-month production (in thousands of barrels) in case anyone wants to copy and paste just those 5 years. This data came from the EIA.

Year,Jan,Feb,Mar,Apr,May,Jun,Jul,Aug,Sep,Oct,Nov,Dec

1969,275528,249984,280705,277140,290036,288935,288145,281077,278850,285603,280380,295368

1970,293818,267960,294748,287730,295213,280770,285274,296360,295590,310403,301320,308264

1971,299305,272412,302808,293070,298995,288120,293121,291741,274050,284022,274170,282100

1972,282534,270744,293322,285390,298034,285660,294376,293973,285240,293930,282780,289385

1973,284454,263066,287430,278757,287134,276418,285731,284225,271959,285940,274829,280960

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146 comments on IEA Supply Creeping Up

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