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235 comments on DrumBeat: September 2, 2006

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TheTransition on September 3, 2006 - 9:16am Permalink | Subthread | Parent | Comments top
I've done my own fits to various data sets and I agree with westexas. However depending on which data set you use, the peak year moves around from 2006 to out past 2010. In all cases I get basically a period of flat production over about 10 years. Given that production has been flat from mid-2004 I suspect we've in that flat spot now.

Over the next 10 years I expect GTL and CTL projects to get major backing. Hopefully they'll get up and running after we start to move off of the 10 year flat and into about 3 MB/day decline per year. Biofuels might able to contribute a bit after 10 years of development as well (maybe at the 10% level).

However there are huge poential efficiencies to had even with our current fleet of autos. Petrol consumption dropped 5% in Australia over the last year.

I guess the huge question is will $70 per barrel be sufficient to induce 5% savings per year or will prices need to increase further?

I kind of suspect $70 will continue to drive demand destruction at 5% per year since Oil prices have been flat since April despite a decrease in world exports.

If $70 drives 5% demand reduction per year I suspect the world economy will continue to thrive over this phase of the transition period.

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TechGuy on September 3, 2006 - 10:05am Permalink | Subthread | Parent | Comments top
>Over the next 10 years I expect GTL and CTL projects to get major backing. Hopefully they'll get up and running after we start to move off of the 10 year flat and into about 3 MB/day decline per year. Biofuels might able to contribute a bit after 10 years of development as well (maybe at the 10% level).

GTL only makes sense for stranded gas but its unlikely that GTL production could offset very much oil. Since North America now has less than 8 years of Natural Gas supplies we will likely be forced to import Liquified NGas soon.

The issue with CTL projects is that they are extremely difficult to scale up to the point where they can produce > 2 mb/d. The efficiency to convert syngas into petro fuels (diesel & gasoline) isn't very good either)

>I kind of suspect $70 will continue to drive demand destruction at 5% per year since Oil prices have been flat since April despite a decrease in world exports.

While higher prices in the US, Austrialia and Europe force consumers to cut back. Countries like India, China, etc have subsidized prices. This of course prevents the higher oil prices from impacting consumption.

>If $70 drives 5% demand reduction per year I suspect the world economy will continue to thrive over this phase of the transition period.

The US, Europe and Austrialia are now in a transitional phase as the housing boom comes to an end and moves into a housing bust.

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Substrate on September 3, 2006 - 1:26pm Permalink | Subthread | Parent | Comments top
"However depending on which data set you use, the peak year moves around from 2006 to out past 2010. In all cases I get basically a period of flat production over about 10 years."

How did you arrive at a flat period?  Gaussian curves are second order, to get a flat spot you'd need a fourth order polynomial...?

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235 comments on DrumBeat: September 2, 2006

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