Peak Oil Update - January 2007: Production Forecasts and EIA Oil Production Numbers
Posted by Khebab on January 15, 2007 - 11:00am
Topic: Supply/Production
Tags: Ali Morteza Samsam Bakhtiari, bp, chris skrebowski, eia, logistic, loglets, m. king hubbert, oil, rembrandt koppelaar, update [list all tags]
An update on the last production numbers from the EIA along with different oil production forecasts.
World oil production (EIA Monthly) and various forecasts (2001-2027). Click to Enlarge.
What's new:
- Michael Smith from the Energy Institute (World, CO+NGL, 2006)
- Michael Smith (Saudi Arabia, 2006)
A French version is also available on TOD:Canada here.
A pdf version of this article is available here.
Notations: 
Fig 1.- World production (EIA data). Click to Enlarge.
Table I - Production estimate
(in millions of barrels per day (mbpd)) for October 2006 taken from
the EIA website (International
Petroleum Monthly). 1Moving Average
on the last 12 months.
The cumulative change in production estimates are shown on Figure 2. The 2005 annual production for all liquids has been revised up by 0.5 mbpd since first estimate. NGPL estimates increased. CO+NGL production has been revised down for 2006 so far.
Fig 2.- Cumulative change in production numbers since first estimates are issued for each month. Click to Enlarge.
The share of CO is now only 86.68% of the total liquid production.
Fig 3.- Share of each liquid category to the total liquid production. Click to Enlarge.
Fig 4.- World oil production (Crude oil + NGL) and various forecasts (1940-2050). The light gray box gives the particular area where the Figures below are zooming in. Click to Enlarge.
Fig 5.- Production forecasts assuming no visible peak. Click to Enlarge.
Fig 6.- Forecasts by PeakOilers based on bottom-up methodologies. Click to Enlarge.
Fig 7.- Forecasts by PeakOilers using curve fitting methodologies. Click to Enlarge.
Fig 8.- Year-on-Year production growth. Click to Enlarge.
Table II. Summary of all the
forecasts (figures are in mbpd) as well as the last EIA estimates.1Productive
capacities.
I've added a simple domestic consumption forecast based on a population forecast by the UN and a constant number of barrels per capita at (see here for details). In order for exports to remain at their 2005 level and assuming the aforementioned consumption model, production needs to grow by (orange dotted line on the charts).
Fig 9.- Saudi Arabia oil production (EIA Monthly) and various forecasts (2001-2020). The EIA estimate is a productive capacity (PC). Click to Enlarge.
Table III. Summary
of all the forecasts (figures are in mbpd) as well as the last EIA
estimates.1Productive capacities.
November 2006
October 2006
September 2006
- mbpd= Millions of barrels per day
- Gb= Billions of barrels (109)
- Tb= Trillions of barrels (1012)
- NGPL= Natural Gas Plant Liquids
- CO= Crude Oil + lease condensate
- NGL= Natural Gas Liquids (lease condensate + NGPL)
- URR= Ultimate Recoverable Resource
EIA Last Update (October)
Data sources for the production numbers:
- Production data from BP Statistical Review of World Energy 2006 (Crude oil + NGL).
- EIA data (monthly and annual productions up to October 2006) for crude oil and lease condensate (noted CO) on which I added the NGPL production (noted CO+NGL).
The All liquids peak is now July 2006 at 85.49 mbpd (previously May 2006 at 85.21 mbpd), the year to date average values in 2006 (10 months) are down from 2005 for all the categories except for the total liquids which now equals 2005 production. The peak date has changed for Crude Oil + Cond. and is now May 2005 at 74.15 mbpd (see Table I below).
Fig 1.- World production (EIA data). Click to Enlarge.
| Category | Oct 2006 | Oct 2005 | 12 MA1 | 2006 (10 Months) | 2005 (10 Months) | Share | Peak Date | Peak Value |
|---|---|---|---|---|---|---|---|---|
| All Liquids | 84.79 | 84.87 | 84.60 | 84.56 | 84.56 | 100.00% | 2006-07 | 85.49 |
| Crude Oil + NGL | 81.49 | 81.60 | 81.41 | 81.37 | 81.41 | 96.12% | 2005-05 | 82.08 |
| Other Liquids | 3.29 | 3.27 | 3.18 | 3.19 | 3.15 | 3.88% | 2006-08 | 3.54 |
| NGPL | 8.00 | 7.77 | 7.86 | 7.90 | 7.85 | 9.43% | 2005-02 | 8.05 |
| Crude Oil + Condensate | 73.50 | 73.83 | 73.55 | 73.47 | 73.57 | 86.68% | 2005-05 | 74.15 |
Revision Pattern
The cumulative change in production estimates are shown on Figure 2. The 2005 annual production for all liquids has been revised up by 0.5 mbpd since first estimate. NGPL estimates increased. CO+NGL production has been revised down for 2006 so far.
Fig 2.- Cumulative change in production numbers since first estimates are issued for each month. Click to Enlarge.
The share of CO is now only 86.68% of the total liquid production.
Fig 3.- Share of each liquid category to the total liquid production. Click to Enlarge.
Fig 4.- World oil production (Crude oil + NGL) and various forecasts (1940-2050). The light gray box gives the particular area where the Figures below are zooming in. Click to Enlarge.
Business as Usual
- EIA's International Energy Outlook 2006, reference case (Table E4, World Oil Production by Region and Country, Reference Case).
- IEA total liquid demand forecast for 2006 and 2007 (Table1.xls).
- IEA World Energy Outlook 2006 : forecasts for All liquids, CO+NGL and Crude Oil (Table 3.2, p. 94).
- IEA World Energy Outlook 2005 : forecast for All liquids (Table 3.5).
- IEA World Energy Outlook 2004 : forecast for All liquids (Table 2.4).
- A simple demographic model based on the observation that the oil produced per capita has been roughly constant for the last 26 years around 4.4496 barrels/capita/year (Crude Oil + NGL). The world population forecast employed is the UN 2004 Revision Population Database (medium variant).
- CERA forecasts for conventional oil (Crude Oil + Condensate?) and all liquids, believed to be productive capacities (i.e. actual production + spare capacity). The numbers have been derived from Figure 1 in Dave's response to CERA.
Fig 5.- Production forecasts assuming no visible peak. Click to Enlarge.
PeakOilers: Bottom-Up Analysis
- Chris Skrebowski's megaprojects database (see discussion here).
- The ASPO forecast from the last newsletter (#71): I took the production numbers for 2000, 2005, 2010, 2015 and 2050 and then interpolated the data (spline) for the missing years. I added the previous forecast issued one year and two years ago (newsletter #58 and #46 respectively). There was no revision since August 2006.
- Rembrandt H. E. M. Koppelaar (Oil Supply Analysis 2006 - 2007): "Between 2006 and 2010 nearly 25 mbpd of new production is expected to come on-stream leading to a production (all liquids) level of 93-94 mbpd (91 mbpd for CO+NGL) in 2010 with the incorporation of a decline rate of 4% over present day production".
- Koppelaar Oil Production Outlook 2005-2040 - Foundation Peak Oil Netherlands (November 2005 Edition).
- The WOCAP model from Samsam Bakhtiari (2003). The forecast is for crude oil plus NGL.
- Forecast by Michael Smith (Energy Institute) for CO+NGL, the data have been taken from this chart in this presentation (pdf).
Fig 6.- Forecasts by PeakOilers based on bottom-up methodologies. Click to Enlarge.
PeakOilers: Curve Fitting
The following results are based on a linear or non-linear fit of a parametric curve (most often a Logistic curve) directly on the observed production profile:- Professor Kenneth S. Deffeyes forecast (Beyond Oil: The View From Hubbert's Peak): Logistic curve fit applied on crude oil only (plus condensate) with URR= 2013 Gb and peak date around November 24th, 2005.
- Jean Lahèrrere (2005): Peak oil and other peaks, presentation to the CERN meeting, 2005.
- Jean Lahèrrere (2006): When will oil production decline significantly? European Geosciences Union, Vienna, 2006.
- Logistic curves derived from the application of Hubbert Linearization technique by Stuart Staniford (see this post for details).
- Results of the Loglet analysis.
- The Generalized Bass Model (GBM) proposed by Prof. Renato Guseo, I used his most recent paper (GUSEO, R. et al. (2006). World Oil Depletion Models: Price Effects Compared with Strategic or Technological Interventions ; Technological Forecasting and Social Change, (in press).). The GBM is a beautiful model that has been applied in finance and marketing science (see here for some background). The estimation in Guseo's article was based on BP data from 2004 (CO+NGL).
- The so-called shock model proposed by TOD's poster WebHubbleTelescope . You can find a description of his approach on his blog here. The current estimate was done in 2005 based on BP's data.
Fig 7.- Forecasts by PeakOilers using curve fitting methodologies. Click to Enlarge.
Production Growth
The chart below gives the year-on-year production growth (or decline) for each month. Growth has been weak (below 1%) most of the year but went back in positive territory since last July.
Fig 8.- Year-on-Year production growth. Click to Enlarge.
| Forecast | 2005 | 2006 | 2007 | 2010 | 2015 | Peak Date | Peak Value |
|---|---|---|---|---|---|---|---|
| All Liquids | |||||||
| Observed (EIA) | 84.56 | 84.56 | NA | NA | NA | 2006-07 | 85.49 |
| Koppelaar (2005) | 84.06 | 85.78 | 86.61 | 89.21 | 87.98 | >2011 | >89.58 |
| EIA (IEO, 2006) | 82.70 | 84.50 | 86.37 | 91.60 | 98.30 | >2030 | >118.00 |
| IEA (WEO, 2006) | 83.60 | 85.10 | 86.62 | 91.30 | 99.30 | >2030 | >116.30 |
| IEA (WEO, 2005) | 84.00 | 85.85 | 87.64 | 92.50 | 99.11 | >2030 | >115.40 |
| IEA (WEO, 2004) | 82.06 | 83.74 | 85.41 | 90.40 | 98.69 | >2030 | >121.30 |
| CERA1 (2006) | 87.77 | 89.52 | 91.62 | 97.24 | 104.54 | >2035 | >130.00 |
| Lahèrrere (2006) | 83.59 | 84.82 | 85.96 | 88.93 | 92.27 | 2018 | 92.99 |
| Lahèrrere (2005) | 83.59 | 84.47 | 85.23 | 86.96 | 87.77 | 2014 | 87.84 |
| Smith (2006) | 85.19 | 87.77 | 90.88 | 98.94 | 98.56 | 2012-05 | 99.83 |
| Crude Oil + NGL | |||||||
| Observed (EIA) | 81.45 | 81.37 | NA | NA | NA | 2005-05 | 82.08 |
| IEA (WEO, 2006) | 80.10 | 81.38 | 82.67 | 86.50 | 92.50 | >2030 | >104.90 |
| ASPO-71 | 80.00 | 81.90 | 84.48 | 90.00 | 85.00 | 2010 | 90.00 |
| ASPO-58 | 81.00 | 82.03 | 83.10 | 85.00 | 79.18 | 2010 | 85.00 |
| ASPO-45 | 81.00 | 80.95 | 80.80 | 80.00 | 73.77 | 2005 | 81.00 |
| Koppelaar (2006) | 81.76 | 82.31 | 83.68 | 91.00 | NA | >2010 | >91.00 |
| Bakhtiari (2003) | 80.24 | 80.89 | 80.89 | 77.64 | 69.51 | 2006 | 80.89 |
| Skrebowski (2006) | 80.90 | 81.42 | 82.59 | 87.32 | NA | >2010 | >87.92 |
| Smith (2006) | 80.53 | 82.81 | 85.45 | 91.95 | 88.60 | 2011-02 | 92.31 |
| Staniford (High) | 77.45 | 77.92 | 78.31 | 79.01 | 78.51 | 2011-10 | 79.08 |
| Staniford (Med) | 75.81 | 75.94 | 75.97 | 75.52 | 73.00 | 2007-05 | 75.98 |
| Staniford (Low) | 70.46 | 70.13 | 69.71 | 67.92 | 63.40 | 2002-07 | 70.88 |
| Loglets | 81.12 | 82.14 | 83.02 | 84.65 | 83.26 | 2012-01 | 84.80 |
| GBM (2003) | 76.06 | 76.27 | 76.33 | 75.30 | 67.79 | 2007-05 | 76.34 |
| Shock Model (2006) | 80.76 | 80.43 | 80.01 | 78.27 | 73.74 | 2003 | 81.17 |
| Constant barrels/capita | 78.81 | 79.73 | 80.66 | 83.42 | 88.01 | 2050 | 110.64 |
| Crude Oil + Lease Condensate | |||||||
| Observed (EIA) | 73.65 | 73.47 | NA | NA | NA | 2005-05 | 74.15 |
| IEA (WEO, 2006) | 70.80 | 71.78 | 72.77 | 75.70 | 80.30 | >2030 | >89.10 |
| CERA1 (2006) | 76.49 | 76.89 | 78.60 | 82.29 | 83.83 | >2038 | >97.58 |
| ASPO-71 | 73.10 | 74.45 | 75.87 | 78.00 | 72.00 | 2010 | 78.00 |
| ASPO-58 | 73.00 | 73.80 | 74.65 | 76.00 | 69.50 | 2010 | 76.00 |
| ASPO-58 | 72.80 | 72.56 | 72.25 | 71.00 | 63.55 | 2005 | 72.80 |
| Deffeyes (2004) | 69.81 | 69.81 | 69.71 | 68.90 | 65.88 | 2005-12 | 69.82 |
Saudi Arabia
The Figure 7 below gives Saudi Arabia production for crude oil and NGPL (data from the EIA: Monthly Energy Review for CO and the International Petroleum Monthly for NGPL).- IEA World Energy Outlook 2006 : forecasts for CO+NGL and Crude Oil (Table 3.2, p. 94).
- IEA World Energy Outlook 2005 : forecast for All liquids (Table 3.5).
- EIA, International Energy Outlook 2006 : World Oil Production Capacity by Region and Country, Reference Case, High and low prices scenarios, 1990-2030 (Table E1, p. 155).
- Forecast by Michael Smith (Energy Institute) for CO+NGL, the data have been taken from this chart in this presentation (pdf).
I've added a simple domestic consumption forecast based on a population forecast by the UN and a constant number of barrels per capita at (see here for details). In order for exports to remain at their 2005 level and assuming the aforementioned consumption model, production needs to grow by (orange dotted line on the charts).
Fig 9.- Saudi Arabia oil production (EIA Monthly) and various forecasts (2001-2020). The EIA estimate is a productive capacity (PC). Click to Enlarge.
| Forecast | 2005 | 2006 | 2007 | 2010 | 2015 | Peak Date | Peak Value |
|---|---|---|---|---|---|---|---|
| Crude oil + NGL | |||||||
| Observed (EIA) | 11.01 | 10.71 | NA | NA | NA | 2005-04 | 11.06 |
| IEA (WEO, 2006) | 10.60 | 10.83 | 11.03 | 11.60 | 13.30 | 2030 | 17.30 |
| IEA (WEO, 2005) | 10.62 | 10.85 | 11.09 | 11.90 | 13.62 | >2030 | >18.20 |
| EIA Low Prices (IEO, 2006) | 11.79 | 12.45 | 13.11 | 14.40 | 15.01 | >2030 | >18.60 |
| EIA Reference Case (IEO, 2006) | 11.87 | 12.57 | 13.27 | 14.46 | 14.79 | >2030 | >17.10 |
| EIA High Prices (IEO, 2006) | 11.41 | 11.82 | 12.19 | 12.65 | 11.06 | 2010-01 | 12.70 |
| Smith (2006) | 11.16 | 11.39 | 11.78 | 14.08 | 14.38 | 2018-01 | 14.50 |
| Crude Oil + Lease Condensate | |||||||
| Observed (EIA) | 9.55 | 9.23 | NA | NA | NA | 1980-11 | 10.41 |
| Consumption | |||||||
| Cont. Barrels/Capita | 1.71 | 1.75 | 1.79 | 1.92 | 2.14 | 2050 | 3.43 |
Next update in February.
Previous Update:
December 2006November 2006
October 2006
September 2006
Khebab@theoildrum.com
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Khebab-very well done!
Figure 3 was very interesting -the total of all liquids that is actual crude oil has declined from 92% to 86% - most of this difference has been made up by natural gas plant liquids (which makes sense, seeing that we have ramped up Nat gas production since 1980). It would be interesting (though probably impossible) to take these numbers and look at the decline in net energy delivered to society - as presumably the 14% of total liquids that are now NOT crude oil or condensate, require more energy to create which is taken out of the total pie.
It will also be interesting to see the impact of NA gas cliff on the NGPL component - though the world as a whole may still get a good boost in this area.
Nice job (again)
But on a per capita basis it is surely declining. You know, Olduvai and all that Jazz…
Thanks Nate,
Re: as presumably the 14% of total liquids that are now NOT crude oil or condensate, require more energy to create which is taken out of the total pie.
Besides, it could be interesting to know how much diesel fuel has been used to produce ethanol which is counted in the "Other Liquids" category.
Re: It will also be interesting to see the impact of NA gas cliff on the NGPL component - though the world as a whole may still get a good boost in this area.
I agree, NGPL production is almost flat since February 2005 but seems to have increased a little bit lately.
Besides, it could be interesting to know how much diesel fuel has been used to produce ethanol which is counted in the "Other Liquids" category.
We discussed this some yesterday in another thread. The answer to this is 'not much'. The bulk of the energy input is derived from natural gas.
What else could have been done with the natural gas?
The number Austex came up with was 23% of the BTUs for a gallon of ethanol was from gas/diesel.
Unfortunatly he didn't save his work and only posted the results.
Last night after the fact I found this piece of analysis that I did not see the other day when I was trying to calculate the crude oil inputs. By far the most detailed and thorough piece of work that I've seen to this point. Many of the numbers are justified as well, which I did not see much of the other day. Check it out if you have time. It's few years old, but should still be fairly applicable to today's situation
http://www.ncga.com/ethanol/pdfs/energy_balance_report_final_R1.PDF
If you don't have time, in his conclusion (pg 55/56) it's stated that the makeup of btu's comes from 7.3% petroleum, 75.2% coal/natural gas, and 17.5% captured solar energy by the corn.
I'm thinking these percentages do not include transportation of feedstock and finished product which is why my conclusion came out with a higher percentage.
The link refers to the energy balance of corn ethanol. Until the recent foolish burst of subsidized ethanol production from the US, the single largest producer of ethanol was Brazil and it was done with 100% sugar cane.
Sources that I have frequently posted here cite energy balances of 8-10 from sugar cane-based ethanol rather than the 1.2-1.3 from corn.
So even if crude based inputs constitute 50% of the energy input into sugar cane based ethanol production, they woudn't be more than 5-6% of the BTUs in the final fuel.
So instead of double counting, in the case of sugar cane, it is more like + 5% counting. Biodiesel presumably comes somewhere in between.
I believe that the world could derive 5-10% of the BTU content in all liquid fuels from sugar cane without much damage to the environment (and ideally with improvement to health). This would be a significant offset to waning oil supplies and would have little actual oil content.
By the way, I think it makes sense to count and track both C & C figures as well as all (net) liquids, but for different purposes. C&C is the best measure of peak oil. All (net) liquids is the best measure for how mankind will cope with it.
'By the way, I think it makes sense to count and track both C & C figures as well as all (net) liquids, but for different purposes. C&C is the best measure of peak oil. All (net) liquids is the best measure for how mankind will cope with it.'
A succint and important point, well worth keeping in mind as the inevitable decline of crude production will lead to a number of different directions in how that reality is accepted, from starving those who can't pay for a tank of gas (based on the data that the corn required for one tank of vehicle fuel is equivalent to what one human requires for a year) to utopian visions of peaceful powerdown, or in the German expression, 'Frieden. Freude. Eierkuchen.' (a slightly nonsensical expression meaning 'Peace, Joy, and Pancakes' - or if you are from Berlin, then 'Peace Joy, and jelly filled Doughnuts' - sort of like 'happily ever after,' it tends to refer to something very desirable, but which will never really occur.)
Explain the basis of this belief, please. How much topsoil is lost annually to achieve this process? How much silting occurs annually to achieve this process? How much water table damage occurs annually to achieve this process? What level of salinization occurs annually? Under what population scenarios? Under what consumption scenarios?
Please provide the data for your conclusion, as I do not believe the statement you made.
Thank you.
I found that graph quite interesting as well. There has been a tendency for some to characterize the growth in 'All Liquids' as being much steeper and more recent than this graph displays. Although growing, All Liquids has obviously been a significant percentage for quite a while. I don't see the 'market forces' all the sudden kicking in here.
So far it looks like Bakhtiari gets the cigar for being the most accurate. His prediction, CO + NGL, made over three years ago, (3003) is now spot on. He predicted that the peak would be right now, well actually 2006, and so far it is.
Peak CO is still 2005 but it is so close we must say we are on the peak plateau. When we come off this plateau which way will we turn? Bakhtiari says it will turn down. That is my guess also.
Bakhtiari is an Iranian and knows more about Iran and the Middle East than anyone giving us reserve numbers today. Well, that is true in my opinion anyway. Others may to choose to believe the IEA or the EIA but one glance at the graphs above should instantly tell us how accurate we can expect their prediction may be. Only a Freddy Hutter would believe those absurd numbers.
Bakhtiari On Middle East Oil Reserves:
http://www.evworld.com/view.cfm?page=article&storyid=980
Ron Patterson
I forgot to add, Bakhtiari has the plateau lasting through 2007 and turning down in 2008. I think this is very significant. We cannot expect a sharp drop (or rise) anyway soon. As some nations peak, others are still increasing production, but only slightly. Russia, if not already peaked, is likely to peak in 2007. China is likely at peak. Of the major producers, other than Russia only Brazil, Angola and the Caspian area are yet to peak. Canada is a big question mark. I think they will likely increase production but so slowely it will have little or no effect on the peak date.
Ron Patterson
This is why I feel that the ongoing debate between WT and RR is irrelevant. Maybe there will be a new high in the next year or so or maybe there won't. But it will not be sustainable and will be overtaken relatively quickly by declines in other world producers. Let's wait and see, but it is really only a technical point IMHO.
As I noted down the thread, the midpoint between Deffeyes' most likely pick for the world peak and Robert's earliest pick for the world peak is about five months away--July 1, 2007.
This is why I feel that the ongoing debate between WT and RR is irrelevant.
You would be correct if what we were debating is the peak date. It is not, but those who believe it is see the debate as essentially nitpicking.
The debate, from my perspective, is about the quality of data you use to support your argument, and how well that data withstands scrutiny. I will leave it at that.
Except that WT model implies that the treadmill of depletion is speeding up as the giants peak and decline. This leads to a small cliff off the peak plateau as the decline rate of the giants have a large impact on production.
This mini cliff will have huge repercussions economically.
In later posts you mention that we have handled the peaking of various giants with increased production form other sources but the problem is the timing I don't think we can handle ghawar/canterell collapsing in the end 2007/2008 time frame along with worldwide depletion.
To me this post plateau dip is the important issue. WT implies a big drop you disagree. A 14% decline or better from both Ghawar and Canterell at the same time cannot be made up in the time span IMHO. And its this initial roll off peak which is the most critical.
"...I don't think we can handle ghawar/canterell collapsing in the end 2007/2008 time frame along with worldwide depletion."
Why not? Gas will become expensive and people will drive slower, less and buy smaller cars. That alone can reduce gas consumption by 10% in the US, if necessary. We are not looking at 20% annual decline but at a few percent initially and 5-10% later. As world oil consumption declines, a new equilibrium between price and utility function of oil will be found. Currently the utility of most of the oil we burn in the US is 0. We burn it to make us feel better about ourselves by driving a larger than necessary vehicle. I bet that the average consumer can replace one gallon of gas with one dose of Viagra and probably not notice the difference. Or, maybe, he will notice the difference. Viagra will actually give him the better erection the SUV ads promised.
At current prices, one dose of Viagra costs considerably more than a gallon of gasoline -- however you want to factor that into your argument...
Don't forget to calculate the utility of Viagra vs the utility of a gallon of gasoline. Viagra gives an old guy an erection, gasoline does the same for the young male.
Pfizer is applying to have Viagra sold over-the-counter. This should allow them to drop the price somewhat as they are anticipating huge sales increases (pun intended).
I was more thinking about the energy required to produce one dose of viagra. I bet it can be done for less than one tenth of a gallon worth of gas. Pharmaceutical chemists are welcome to give us an estimate of the net energy required to make sildenafil citrate.
The direct energy needed to make the actual tablet might be small, but when you include the entire energy utilization chain: employees, food, transport, r&d, packaging, etc, its probably in the several gallons per viagra tablet.
I wonder what the half-life of that stuff is.....
This makes no sense to me; if it took more than two gallons of gasoline to deliver a tablet of a drug, the drug would have to cost more than than two gallons of gas (and there are numerous other costs involved, plus a large profit). Since it doesn't, it can't be requiring that much gasoline to produce. Generic viagra (not legally available in the US, yet) costs a small fraction of what the branded product does, so we can be pretty sure that the energy is much less than that.
In Stuart's thread of Dec 8, the point was made that price increases in the last few years haven't reduced consumption significantly. In order for price to really affect consumption, first it has to be high enough to really hurt. Since 3.5% of our typical budget now is spent on motor vehicle fuel, and 15% of our vehicle expenses are fuel, it would require a pretty big jump. It needs to be combined with a recession, and there needs to be an expectation of continuing shortage. Political leadership is also a factor.
There may be 'stealth' effects over a period of time with higher gasoline prices that don't show up in immediate consumption figures. Families have to spend a continuously larger portion of their discretionary budget on gasoline and probably run up the credit card balances even more. And spending elsewhere will be cut down, all leading to greater chance of recession which would definitely cause a slowdown in gasoline consumption. You would get sort of a 'slingshot' effect with a buildup in the economy of pressure from the higher gasoline prices, resulting in no immediate drop in consumption, but the whole economic machine would eventually falter.
It's already been tabulated and hasn't changed since last month. $10/barrel increase or decrease in oil affects Real GDP 0.45% over 24 months.
All I can say is your not considering the impact on the third world and resulting political fallout.
A fairly sudden and continued increase in price caused by the elimination of any spare capacity will not be easy to deal with.
The effect of the WT model is that we will run into a situation that leaves us no spare capacity at best and at worst a real shortage of a few mbd compared to normal demand. The result is a price spike followed by nominally high and destructive oil prices along probably with the dawning understanding that peak oil is real.
Getting the masses to believe in addressing peak oil while we have time to mitigate is a good thing while even the chance of the world suddenly becoming peak oil aware because we are really post peak is not good.
Thats the big reason I believe in addressing peak oil earlier than later.
Mitigation needs to start today not when the world believes peak oil is imminent. Even the most optimistic analysis puts peak oil within 30 years
half this for safety and we would have 15 years to wean ourselves of oil.
Even with this its time to start working on moving away from a oil based society.
Its a chicken and egg problem if we start to seriously work on moving away from oil I think that we can and will get good numbers on remaining reserves.. And this will of course give us a clear picture on the time we have to transition. The reasoning is that the first step in mitigating peak oil will be to of course force all oil producers to become transparent.
If we don't then we won't get real numbers until peak is blatantly obvious.
I doubt that educational efforts to explain PO will have any lasting or even significant effect on consumer behaviour. As long as fuel is cheap - and right now fuel is still very cheap - most people will not abstain from buying oversized cars. I did point out in other posts that people I know and work with follow consumer patters with anti-correlation between income and vehicle mass/engine volume. The more educated they are, the more efficient cars they drive. But this is probably mostly motivated by the need of PhDs to send their kids to expensive schools (and thus moderate all their other expenses) rather than an insight into the workings of PO. There is considerably less moderation on the side of people with far more limited incomes who would actually profit more from conserving fuel and their income.
The driving factors in the US as well as in Europe (and I would assume Japan) towards higher fuel efficiency are fuel price and regulations, not insight and rational response to foreseable events. I don't see any serious efforts in the US to limit waste outside of a few state settings (like CA) but even those fall far short of efforts in Europe. I also don't expect a $/gallon tax hike on transportation fuels which is the least that would be required to save tens of billions of dollars which need to be invested in effective fuel economy measures. The US had a hard landing with vehicle economy in the 70s and it is waiting for another hard landing now. Just like then, there are plenty of automobile companies waiting to supply the burn victims with soothing economy models to reduce the pain. Just like then the US industry will implode on its own failings. I am sure they have greased enough politicians already to bail them out.
I agree, so far Bakhtiari's forecast has the best performance (in terms of number of predictive years and quality of the fit). Also, surprisingly, the old ASPO forecasts (ASPO-46 and 58) are quite good for CO.
I agree with this assessment. I had mentioned after Khebab's post a couple of months ago that Bakhtiari's curve looked the best fit. At the moment it looks like 2007 might be a "quiet" year for peak oil with low prices for much of the time dampening public and political concern. As long as KSA and OPEC can get away with saying that they are "voluntarily" limiting production to prop up prices, many people who don't want to accept the peak oil argument, won't.
As previously posted on TOD Europe, I think the real fun and games will come next year (maybe in the second half of the year), as we start to come off plateau, prices rise, economies struggle to cope and OPEC (maybe) can't get the output up to control them. Then watch financial markets, the $ and real estate prices tumble.
Hi Ron,
Bakhtiari’s model is quite apart from the other for it includes economic constraints resulting in an earlier peak. By 2003 the soon-coming cycle of deep-offshore production was still very unclear and I believe was hardly well incorporated in WOCAP, thus I think a new run with present data would probably give different results. Lets hope Bakhtiari does so, as he indicated some time ago.
Freddy is a very important member of this forum, that kind of comments not only fail to recognize that but also diminish the level of openness of the debate.
I agree Luis, but everytime Freddy replies to one of my posts his comments are far worse than anything I could possibly dream up.