270 comments on DrumBeat: January 27, 2007
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WSJ: Mexico’s Oil Output Cools
Slowing of Major Field May Pressure Prices, U.S. Import Diversity
By David Luhnow, 1/27/07
The WSJ article is an update to one they did about a year ago, predicting a crash in Cantarell's production, based on leaked internal reports.
BTW, based on this article (and the previous NPR interview), it looks like Shields is predicting (at least) a net decline in Mexican production of 400,000 bpd from 12/06 to 12/07, and then another drop of 400,000 bpd from 12/07 to 12/08. Based on the NPR interview, I had been characterizing it as a 800,000 bpd drop from 2007 to 2008.
In any case, this would be a net decline of about 1.2 mbpd over a three year period (12/05 to 12/08), which would be an annual net decline rate of 15% per year. Note that if we use average annual values, we will get a lower annual decline rate, but IMO where we have declining (especially rapidly declining) production, month to month comparisons give us a better prediction of production for a given future month.
Unless Mexico drastically curtails their domestic consumption, at the projected decline rate, Mexico will effectively cease to be a net oil exporter by the end of 2008, just in time for the US presidential elections. I wonder how well efforts to curtail domestic oil consumption, in order to ship oil to the north, will go over in Mexico?
As Fireangel pointed out yesterday, there are media reports out suggesting that Saudi Arabia's crude + condensate production may have already fallen below 8 mbpd in December.
We do know that Saudi Arabia and Mexico are unilaterally curtailing crude oil shipments to refiners (below what the refiners want to buy).
FYI--exactly one year ago today I warned of a rapidly developing net oil export crisis: http://www.theoildrum.com/story/2006/1/27/14471/5832
Good story Jeffery. Well Good is a relative word here.
Mexico production has not declined that much from the start of the the year. So they have been able to compensate. However the decline is significant in terms of exports. You have made everyone an expert in considering exports rather than just total production. I know I just thought about total oil production before I read your posts.
In December of 2005 Mexico produced 3,388,000 barrels of oil per day, C+C. In December of 2006 Mexico produced 2,978,000 barrels of oil per day, C+C. That is a drop, December to December of 410,000 barrels per day.
You are probably looking at the average for 2005 verses 2006. They had hurricane Emily, plus platforms were abandoned for Katrina, Rita and Wilma for a short time. This caused the 2005 average to be quite lower than normal. That plus the fact that Mexican production decline has accellerated in the last three months. They have dropped 280,000 barrels per day in only the last three months. I would cause that very significant.
Ron Patterson
Hmmm...even though I've sworn off predictions as of late...I'm going to put my toe back in the water for this little prediction.
I am not 100% sure that we have passed world peak on C+C, we may know for sure in a year or two.
I am pretty sure that 2007 will be the year of "Peak Oil Awareness" in the general public and not just pockets of interested groups and communities. The "spillover" is ripe and there are more and more receptive ears even though gasoline prices are lower.
The public knows that something is not on the level with the war in Iraq and the threats to Iran from our President. They are starting to put the dots together.
Just a hunch.
Dragonfly,
"I am pretty sure that 2007 will be the year of "Peak Oil Awareness"
IMO it will not have to be a reduction in imports, climbing gas prices at the pumps, or any of the other that will be the cause for hysteria and resulting chaos.
It will simply have to be the acceptance by the public that WE ARE RUNNING OUT OF OIL.
Once that sinks into JoeSixPack's brainpan then he will become hysterical and start hoarding. All the rest will do likewise.
We will rapidly circle the drain as Amurkans realize that what they have been hearing is suddenly going to happen.
I believe this because over 30 yrs ago I was out and about when the oil embargo was put in place and what I witnessed then will be multiplied many many times over.
It will begin to feed on itself fanned by the MSM and their blowdried reports earnestly leaning into the camera and speaking of doom and armegeddon. The public like all good sheeple will respond. Where it goes from there is an unknown.
Once you see violence, chaos and other events up close you never forget just how little it takes to set one off.
Putting the dots together..yes...but only until the MSM goes nutso will the people believe anything. Thats the way they are now wired.
Those yelling doomer at me weren't here during WWII or Pearl Harbor or the backside of the depression and most likely have no recollection of 1973.
Recognition of Peak Oil could be delayed by an economic recession. Demand can drop faster than production if the economy sinks. This would totally cloud the issue. It is bad news either way. I keep wondering which TPTB would prefer. It kind of looks like they would prefer to keep the economy humming as fast as energy production allows. Damn the consequences. The choice over the last decade is obvious now. TPTB wanted economic growth over everything else. Eventually growth bumps into limits to growth. Peak Energy and environmental destruction are here.
The reign of King Dumbo has been a complete failure for those who dream of peace and environmental sanity.
Continuous recessions, followed by short revivals are the only serious scenarios about how PO will play out economically. One would be a fool to think that oil can get to $200 or even $100 and stay there without the this breaking the back of the economy along.
Those periods should continue until we complete our transition to an oil-free economy. Of course economic scenarious can not predict resource wars or the amount of suffering of the world's poor... economics usually shies away from such "externalities".
Hi Oaksmoke,
Thanks. Yes. "Recognition of Peak Oil could be delayed by an economic recession."
And, in addition, as someone may have already suggested, it's even possible we'll see on-going economic upheaval, without any general understanding of the underlying reasons.
>Once that sinks into JoeSixPack's brainpan then he will become hysterical and start hoarding. All the rest will do likewise.
I wouldn't be so certain of this. For one, I suspect the majority of public still believes that we can use technology to replace oil. The media, gov't and so called "experts" will flood the airwaves that a tech. solution is just a year or two away. So instead of hoarding or making any prepations they'll go on about their daily lives. Plus Joe Six pack is up to his eyeballs in debt and can't afford to hoard anything, except hoarding even more debt.
>I believe this because over 30 yrs ago I was out and about when the oil embargo was put in place and what I witnessed then will be multiplied many many times over.
For this to begin there would need to be shortages. I suspect that this time oil prices will rise resulting in decreased consumption rather than like sudden shortages during the 1970s. The only what I see this re-ocuring is when exporters begin to husband remaining reserves or if war breaks out in the middle east that disrupts exports. Not to say that these events won't occur, but I just don't see an crisis begining because of US public exceptance of PO. Hell, Most americans believe that the Oil companies have been suppressing technology that could replace oil. Another words, a crisis will orignate overseas do to a severe decline in exports, not because of US public sentiment.
Tin foil hat time...
Can anyone else see a line between the Cantarell crash and this Halliburton Press release?
I've been beating this drum for a while. Here's how I see it playing out, in an article I've posted in various places on the net:
Does anyone know where these detentions camps will be located?
I don't know how reliable the information is, but this site gives a list and a map. They seem to be mostly in the south, with the highest concentration (pun unintended) in Texas.
http://www.geocities.com/theawakeningnews/Police_State-Concentration_Cam...
I don't know how reliable the information is, but this site gives a list and a map. They seem to be mostly in the south, with the highest concentration (pun unintended) in Texas.
We have plenty of current inventory down here, and we should be able to keep these facilities full at the rate they countinue to pour in the country. I've lived in Central Texas most of my life, and can vouch that during the last 5 years the area has been completely transformed.
The map certainly has a lot of concentration camps. If there were that many, it would seem like employees involved with them would start leaking out the word.
Alternatively, if they exist at this time, they may not be staffed. Finding staff would seem like it would be tricky - unless Halliburton does it all.
Hi Gail,
A current detention facility (non-profit?)
http://www.ice.gov/pi/news/factsheets/huttodetentionfac.htm
http://www.washingtonpost.com/wp-dyn/content/article/2007/01/26/AR200701...
A Culinary and Cultural Staple in Crisis
Mexico Grapples With Soaring Prices for Corn -- and Tortillas
By Manuel Roig-Franzia
Washington Post Foreign Service
Saturday, January 27, 2007; A01
Good find.
The Economist a few days back very rapidly dismissed the ethanol-white corn connection. So rapidly that I became suspicious that they had done zero real homework on the issue.
We definitely need more info on this. This begs as many questions as it answers.
Asebius,
Unless the white corn fetches the same price as the yellow(lower for white) this I would assume the wise farmer would fill his planter hoppers with yellow corn next year.
Simple market economics I suppose. We use plenty of white corn for ourselves so I think both prices will be in lockstep.
Since we raise none in my area, popcorn yes, then I can't get a good read on what the locals may do. Barring that I think they will go with the good prices.
Already plenty of winter wheat is in the ground due to the wheat runup last year however they might even rip that out and plant corn if wheat looks to be a loser. I have seen them do that before.
Mexico is going to be a handy barometer for us up north to see which way the cat is swinging on the line. Will it land on its feet? My childhood tests on the farm from throwing cats out the hayloft proved you can't tell precisely.
Sheesh.
Let the games of bait and delude begin.
Follow the yellow-caked road.
Airdale,
You wrote:
For sure. Even if world peak is down the road, Mexico's peak will provide a taste of the future.
BTW, Mexico has it's own migration problem with desperate folks crossing it's southern border in large numbers wanting access to the US.
In tomorrow's NYT:
http://www.nytimes.com/2007/01/28/world/americas/28mexico.html?ex=157680...
Typically white corn is priced at a premium to yellow corn because it yields less. Farmers have to be compensated for the lower yield with higher prices in order to be incented to plant the white corn. (Premiums used to be at least 25% I'm not currently knowledgable at what the current market premiums are) The primary reason for the lower yield is the lower focus by the plant breeders on white corn because it is typically less than 2% of the total corn crop. (White corn is primarily used as a human food. I.e. Tostitos, White Corn Meal and other ethnic foods.) Why is white corn inferior to yellow dent? As an animal feed it is at a disadvantage to yellow corn because its amino acid profile is short an essential amino acid required in the livestocks digestion. Since most corn in the U.S. has been grown to date for livestock feed white corn is disadvantaged.
The 100+ year-old push-pull affect of the US economy on Mexican migration is a very well documented historical phenomenon. This time circumstances are somewhat different. Many Mexican campesinos--subsistence farmers that own their own land or jointly in a collective called an ejido--were forced off their land due to NAFTA rules that allowed the dumping of highly subsidized, below market-priced US corn on the Mexican market; however, the land is still there, idle. I would expect a return to the land before a large influx into El Norte. You see, there's a communication grapevine that provides information about conditions both north and south, and conditions for the undocumented migrant are not good in El Norte and unlikely to improve for some time. Further, traditional campesinos use very few fossil fuel imputs; in a very real sense, the idea of permaculture comes from Mexico's terraced gardens and the complementary growing system of beans, squash and corn. Why risk death crossing the border or incarceration if you make it when it's much easier to return to the farm?
Pemex's bankruptcy and Cantarell's crashing presents a political crisis for Mexico's elite and threatens the stabilty of the small middle class, and the same can be said of El Norte. Their crisis presents a great opportunity for the long downtrodden majority to gain power a la Bolivia, Ecuador and Venezuela.
Personally, I find it rather ironic that Bush's ethanol policy will destabilize Mexico's illegitimate president after he did so much to have him installed in the first place. Considering the great lack of corporate media coverage of events in Mexico unless you know Spanish, it will be hard to see the precursors of the coming revolution beyond those that are already there and very active.
Karlof1,
I think it would be great if the Mexican peons and farmers could return to their previous way of life and a more sustainable one. This could then serve as a model for ours as we begin to circle the drain.
Maybe it isn't too late for them. Maybe they will decide that the gringos are rather stupid after all.
Perhaps we inadvertenly did them a favor by dumping that corn on them.
I thought Calderon was a rather savvy dude. Surely he can see what our future could possibly be up here. Then he might have to build his own wall and detention camps in the future to keep out the gringos who can't even raise corn anymore.
Joseph Palmer...your link is merely a link in look...for whatever reason there is no web address associated with it. What is the actual address of that halliburton press release?
I'll try it another way...
http://www.halliburton.com/default/main/halliburton/eng/news/source_file...
... for what ever reason
joe, the href= out is missing in your anchor tag: {a href=""}{/a}
Thanks!
I have no way to prove or verify this, so take this with a grain of salt:
I suspect that this may be in prepration for the collapse of the Mexican gov't. If Mexico does collapse there probably be a large number of people who wish to flee the chaos. The US would be a likely destination. The purpose of the detention camps would to be deal with this situation. Since Mexico is largely dependant on Oil exports, a production collapse definately has the potential to create a collapse.
Good god Jeffery, there you go again, posting more gloom. Don't you know by now that increased production is right around the corner because we have a "history" of the last 20 years that says this will not be a problem. We will drill deeper, colder, faster and increase production so much we can't use it up. Get a little faith will ya? The Mexicans and thier gov't are going to be fine and they will not try to sneek into the US. Our Haliburton "hospitality centers" will be empty - just another waste of taxpayer money. So, could you please get with the program here.
Yeah, I told Ron that he and I need to get with the program--crashing super giant oil fields = higher aggregate world oil production.
As part of my continuing efforts to get someone else to do the hard work (Khebab?), it would be interesting to plot the total annual production from the super giants (one mbpd and more), presumably excluding Ghawar, since the data are so nebulous regarding Ghawar.
I have been pushing for a Net Oil Export panel at the ASPO 2007 meeting, but I told one of the organizers last week that by the time the convention rolls around, this fall, declining net oil exports may not be a debatable point any longer.
As I have been noting for a while, I'm sure it's just one of many "coincidences" that we are seeing a massive US military mobilization in the Middle East, just as we see rapidly accumulating evidence of rapidly declining net oil export capacity.
IMO, the big "surprise" this year will be Russia, along with the "shock" that Saudi Arabia is in decline. Finite limits in a finite world. And Peak Oilers are called cultists?
Hello Westexas,
You are probably right. Given that this is the case, no one needs to debate this point ad infinitum here on The Oil Drum any longer. If Hothgor and Freddy Hutter are skeptical, let them remain skeptical. Time will resolve the argument more effectively than any overheated rhetoric ever could.
David Mathews
http://www.geocities.com/dmathew1
Sounds like something I have been saying for quite some time, but news is still news, and the Cantarell story is big news indeed.
Besides, outside the narrow world of Peakoildom, probably 90% plus of the population is certain, based on stories of near infinite oil by ExxonMobil, et al, that the US can continue to increase its total petroleum imports by about 5% every single year.
As I said up the thread, I wonder how well it is going to go over in Mexico if they try to curtail domestic oil consumption in order to ship oil to the US?
BTW, in your constant bashing of "evil oil types" like Robert and myself, has it escaped your attention that we are both in favor of taxing energy consumption, especially fossil fuel energy consumption? This is, shall we say, not exactly a popular concept in Oil Patch circles.
Hello Westexas,
Things will get really ugly down in Mexico. It is impossible to imagine something terrible occurring in Mexico which will not have some sort of terrible consequences for the United States of America, too.
Certainly those things which are praieworthy will receive their share of praise. Taxing energy is a small step in the right direction, but politically unlikely and certainly not enough even if it were to pass. Nature is going to impose an entirely different tax upon the United States of America and we all will suffer.
The United States of America is a country which can collapse, and this means that it will collapse. There's no prophecy involved in this prediction. This civilization was never built to endure forever.
David Mathews
http://www.geocities.com/dmathew1
There we go again WT. Its do what I say, not what I do! I'll stop talking about numbers if you do. Unfortunately you and both know that will be impossible for you to keep your word on the issue.
BTW, this is yet another classic example of how WT focuses in on one small area around a super giant and attempts to apply that to the entire world.
I will state once again: declining super giants around the world do not necessarily mean that global production will decline/crash. In fact, we have 20+ years of history to prove this is the case, as 13 of the 14 super giants are confirmed to have declined/crashed over that time period, and only THREE, yes 3 of the 14 fields still produce over 1 million bpd.
Hothgor,
How will oil from S.A. or Nigeria (or where-ever) help when the Mexican fields go bad?
The Mexican economy still goes to hell. We still end up building a freaking wall on the border. Once we build the wall we are finished with Latin and South America. They will hate us. It will radicalize politics in a way that makes Iraq look tame.
You keep talking global production. But Mexico is local. They are not only our neighbors, there are 10,000,000 of them living amongst us today. Think about that.
Cantarell means Peak Oil is on our doorstep, not in 2012 or 2015... When Mexico falls apart we have significant challenges.
Dozens of countries have experienced declining oil production and a transition to a net importer of oil. How many of them have descended into chaos? Once again, the doomers are predicting nothing but mass chaos and destruction. The belief that the entire Mexican population is suddenly going to try to cross the border is only the latest in a trend of failed predictions.
"dozens of countries...... transition(ing) into net oil importers" .... not good news !
"How many of them have descended into chaos?"
Indonesia? They aren't doing too well. Let's keep an eye on Bahrain.
The ability to avoid 'descending into chaos' when your oil runs low seems entirely dependent on one thing: ability to still keep on making enough money (by making useful stuff) to buy more oil.
China of course has that ability (as did the USA decades ago) and so hasn't descended at all---their shift from oil surplus to deficit came because their own domestic demand for productive industry overran their supply.
Mexico is not like that. Presumably with lower and lower oil exports---as the national oil company will be forced to supply domestic needs before exporting---their currency will decline more and more. If they go to needing net imports then they will have to buy it with a currency the oil exporters will accept.
This will of course mean a greater pressure to emigrate to earn 'harder' money to pay for a better standard of living for their families back home.
This is the umpteeth time you repeat yourself accusing WT of repeating himself. How do you think that looks? Where's the satisfaction?
You have brains, but refuse to use them. Why would anyone be interested in that? You say there's no discussion here, but you're not discussing anything, you're just stating that things are NOT a certain way. That is not discussion, that's just negativity, and you can do better.
Let's see you explain why it is that despite crashes and decline of super giants, there is no oil problem yet. That would be a start. Go ahead.
I don't have to explain anything. History has proven my statements right, and WTs wrong. We have 20+ years now with 13 of the 14 super giant fields in decline that shows that global oil output can indeed rise. Only 3 of the 14 fields still produce more then 1 million bpd, but our global oil production has increased by over 20 million bpd.
What more do you want? And for what its worth, WT called on me first to sit back and let the numbers do the talking, yet he takes every occasion to rant about how the fields are declining worldwide, global output must decline, etc etc. Its hypocritical.
Hothgor,
You keep framing the question the wrong way. The accurate question is, since we had the first one mbpd and larger field, have we ever not had stable to rising production from the sum of all one mbpd and larger fields?
Assuming that Ghawar is in decline, we are now in a situation where we have never before been, at least since the first super giant started producing one mbpd or more, where all fields that are, or were, producing one mbpd or more are now in decline.
It's not a coincidence that world crude oil production is now declining.
So, you are arguing that we can have rising world oil production--even though all fields that are, or were, producing one mbpd or more are in decline--while in fact world crude oil production is falling.
Lets get a few facts interjected here before your spin cycle goes into full gear.
Fact: There were 14 fields world wide that produced more then 1 million bpd in the 1980s
Fact: 13 of those 14 fields are confirmed to be in decline or have crahsed
Fact: Since the 1980s, oil production globally has increase by over 20 million bpd.
Now that that is out of the way, in answer to your question, I want to make sure that it is properly framed to everyone here. You believe that when all 14 fields go into decline, we will have a global decline in oil production.
How then, do you explain the fact that when 13 of those 14 fields went into decline, we still managed to increase production by 20+ million bpd? Keep in mind guys that the 13 fields together produced at a minimum more then 3x as much as Ghawar does now. Yet despite this 20+ year history, WT believes the world will go into decline when a field that represents less then 20% of the production from the elite 14 craters. The remaining 80+% didn't seem to affect things very much :laughs:
Again,
The key question is the total annual production from all fields that are, or were, producing one mbpd or more. I'm fairly certain that this shows, until recently, a stable to rising production profile.
The key problem we face is trying to increase, or even stabilize, production, when all of the super giants are in decline. Assuming that Ghawar is declining, the three biggest producing fields in the world--Ghawar, Cantarell and Burgan--have only recently started declining or crashing, as total world crude oil production started falling.
You are arguing a situation that is contrary to the facts, i.e., in fact world crude oil production is declining.
And you are ignoring the fact that since the 1980s, global oil production has experienced at lest 7 dips in which oil production declined. In several of those cases, the decline was more then 1 million bpd. The longest period of decline was right around 3 years.
Your problem is that you have failed to address why this particular downturn is meaningful, nor can you explain away how extremely minor the decline has been thus far. We're fast approaching the 2 year mark since the 'peak', though this figure is likely to change as the numbers are constantly being backdated. While I can accept a small decline for one year, after the second, a la Texas, we should be seeing a 2% decline.
If we have a 2% decline, bringing the total decline to around 2 million bpd, you might have a point. Until then its just speculation, and you, nor I, nor anyone else can 'prove' their case.
As I have repeatedly said, what is the point of continuing to debate the timing of Peak Oil?
What we know is that the HL model predicted that 2006 was the most likely year for a start of the world crude oil decline, and world crude oil production is declining.
The decline appears to be accelerating, aggravated by the near certain simultaneous declines of the world's three largest producing oil fields.
Therefore, the available data are supporting Deffeyes' prediction, and that support is getting stronger, month by month.
So, what precisely do you hope to accomplish?
Why continue to grace us with your presence, at least until you have higher production data to support your case?
Hasn't RR gone over the whole HL thing numerous times before? HL make TERRIBLE predictors for when a region will peak, but they make great predictors for production after a region peaks. If we were to go back in time to 1950, and start modeling Texas, we would believe that a peak was imminent for the next 20 years. True, one of those years eventually proved to be the peak, but that doesn't mean you can ignore the other 19.
I myself have shown you and everyone else how wildly a HL fluctuates for a region with my KSA graphs, the URR increased almost 100 Gb in 3 short years! We've also already gone over the fact that because KSA was restricting their output to a set average rate for 12 years, their HL would be massively skewed to show a lower URR.
Yet despite these facts, you continue to persist in your same old rantings on every topic, smug in the knowledge that you can not possibly be wrong, constantly belittling others dissenting opinions by spinning what they said into something they didn't say.
When we see rising production in the next 18 months, and set new all time highs, I will remind you of this fact.
The only reason we have stable production right now is because of the deepwater production, which is growing extremely rapidly. From memory the deepwater grows from near 0% of global production in 2000 to near 15% in 2010 (please correct me if I am wrong - I just pulled that from a 1 year old memory - but the message from this still applies). Despite this the global production has hardly grown in the last few years. However, the deepwater stuff has a really short life. Look at the Angola profile in ASPO Jan 2007 newsletter. In 2010 the deepwater is expected to peak and then decline just as rapidly as it rose.
So, I would guess that the total of the giants you keep referring to are in decline and this is only being masked by the deepwater production. This deepwater production is only a little patch expected to see us through for 3 more years. Then we are oast. Whether the actual peak is in 2005, 2006, 2007, 2008 or 2009 is likely to be more dependent on goepolitics than anything else. WT is surely spot on to highlight that exports will peak infront of the production peak and so must be more imminent.
So, what is your point?
Deep Water is currently 4-mbd. ASPO forecasts this to rise to 13-mbd by 2011, dipping to 11-mbd by 2015 and 6-mbd by 2020 ... 69-mbd in total.
It is Deep Water that caused Campbell's most recent optimism on a later Peak. In 1999, Colin was predicting a Peak Rate of 93-mbd in 2009. He downward revised that to the point where in 2004 he was forecasting a Peak Rate of only 80-mbd in 2006. Analysis of Deep Water helped him move Peak Rate to 90-mbd in 2010.
Colin then foresees 52-Gb of Polar, 151-Gb of Heavy & 276-Gb of NGL with their own peaks of 2030, 2021 & 2035 respectively.
So, what is your point?
Hothgar is claiming that we have been offseting declining Giants for 20 years and that this therefor can obviously continue. My point is that this is ONLY JUST occuring today because of absolutely enormous growth in the deepwater. My point is that this growth will only last a few years. So my point is that the way we offset Giants 20 years ago is different to the way we are offsetting declining Giants today. Today we have a large shortlived spike offsetting these declines and nothing obvious beyond that.
My point is that the oil production outlook is very different today than it was in the 80's. I dont think that Hothgars comparison of the situation in the 80's and today is credible. Can't you see that?
Exactly.
All the points u make that oil production cannot grow forever can be made about steel, aluminum, copper, gold, wood, fresh water or any commodity. In economic terms, it is inevitable that growth peaks for every natural resource. But nobody except the PO fanatics see a crisis on the horizon for any of the commodities that are important to every day life. And it is because they do not understand the basic economics wrt supply and demand.
I hesitate but i will repost a reply given a few minutes ago on a thread from a few days ago that is heavily buried. I hope it underlines my thoughts on this more fully:
"Be that as it may, u have failed to recognize my point. Sorry for that. Let me say it another way. The reality is that the 327-Gb from OPEC and the 175-Gb from Canada and other red herrings don't matter in the big picture. Remaining Resources & Reserves totals 1936-Gb. Whether that figure is 30% too high does not change the reality that oil tankers will be with us for way over a hundred years.
In 2107, there will still be a Supply Rate of 16-mbd. If Peak comes before 2020, that 16-mbd will be much higher. URR used to grow at 40-Gb/yr. Thru this decade it has been triple that rate. But even if we slide back to 40-Gb/yr, it exceeds the 31-Gb/yr of consumption.
Nobody knows when Peak Date will be. And really it doesn't matter. The marketplace will determing pricing regimes and that same marketplace will show us the winners and losers wrt substitution and demand destruction. But the insane discussions at TOD wrt running out of oil demean the credibility of those here that are serious. I state for the fifth time: stranded URR is an oxymoron. Until most posters at TOD understand the concept of Reserves and quit navel gazing at Peak Rate, most debate is futile. No ... make that infantile.
Above are the round figures that the number crunchers on both sides agree on. This is the science of Peak Oil. Now, let us get back to the anecdotal and inflammatory stuff that seems to be far more entertaining ..."
Hi Freddy,
"But nobody except the PO fanatics see a crisis on the horizon for any of the commodities that are important to every day life. And it is because they do not understand the basic economics wrt supply and demand."
It seems to me that FF are a different type of commodity(ies) than the others you refer to, because they are necessary for extraction of those commodities, under our present arrangement (for the most part).
Could it be this is where the crises comes into it? (Assuming we don't make any major moves in terms of conservation or directing specific uses of the FF inputs we currently enjoy.)
But nobody except the PO fanatics see a crisis on the horizon for any of the commodities that are important to every day life.
Freddy, what is your definition of crisis?
To me the future is looking rather bleak down the road. Trends have been set in motion for substitutions, but I see no urgency in this area. Even if you believe the scalability is there for these alternatives, the lead times to rebuid existing infrastructure is going to assure that the life we know today will look much different in the future.
At the very minimum, it looks like we can kiss exponential economic and population growth goodbye.
You know Austex, this is one of things that is frequently mentioned that I just don't see eye-to-eye on. At the end of the day we're just going to have to wait and see what happens of course, but I think there may well be enough efficiency gains and simple lifestyle changes that can be made to offset declines and still allow for growth.
Ji, this is the reality. Especially lifestyle. Fortunately, the nations "would seem" to face the largest risk of crisis are in fact on the way to natural changes anyway. Europe, Canada, USA, Australia (as the big per capita consumers and abusers) are heading to an era of ageing population. They will become nations of "savers" over the next three decades. Japan and (West) Germany are already there.
As we saw in Japan, rising GDP is not a prerequisite to harmony and sustainability. Each year and one-by-one, nations will feel the grip of demographics and the subtle slowdown of consumer demand and growth. Adult diapers will be the coming hot commodity.
"steel, aluminum, copper, gold, wood, fresh water or any commodity. "
Have you noticed that recently, the price of copper aluminium steel, nickel and other metal has gone sharply up? What do you think is the reason of that?
Hutter wrote: All the points u make that oil production cannot grow forever can be made about steel, aluminum, copper, gold, wood, fresh water or any commodity. In economic terms, it is inevitable that growth peaks for every natural resource. But nobody except the PO fanatics see a crisis on the horizon for any of the commodities that are important to every day life.
By definition, if one speaks of ‘growth’ (on Earth) of anything at all, envisioning perpetual growth is completely unreasonable. However, the terms are not economic, but material. The price of tobacco has had a highest point in the past (even if it was just yesterday), but tells us nothing about the future of tobacco growing, smoking, and so on.
Lumping together gold and wood, to pick just two from the list of ‘natural resources’ is absurd. Gold is limited (by definition); its value (price) is mostly symbolic (jewelry); its productive uses are limited and I am sure replaceable (see my teeth - no gold); there is no Gold Crisis or Gold Peak - gold bullion, extracted over the ages, is plentiful. No one is going to run out of gold, and if they do, it hardly matters. Moreover, it is re-usable, recycled. Wood, on the other hand, is a ‘renewable’ resource, though for it to ‘renew’ humans must husband nature properly or leave it alone. Peak wood is not a useful concept.
Now, there are rumblings (as pointed out above) about the finitiness of copper for example. And there is a small community worried about the lack of water. About the former, I don’t know much, but for the latter alarmists are mistaken, water is plentiful and will continue so, the problems are political, of infrastructure, the economy, etc.
Comparing is thus interesting nonetheless. I sound like Hutter, but about H2O. :)
"cannot grow forever can be made about steel, aluminum, copper, gold, wood, fresh water or any commodity."
WOOD? I look out my window at several thousand acres or reprod forest some in the procees of thier first commercial thinning. Not to pick your arguement apart but wood shouldn't be in there.
"Nobody knows when Peak Date will be. And really it doesn't matter."
To within a year or two I would agree, after that I think there is more than ample reasons to be concerned today. Ethanol is a farce that will only waste more preciuos time.
"To say that your fate is not linked to mine is like saying your end of the boat is sinking" (RD)
FREDDY - DO YOU UNDERSTAND THE DIFFERENCE BETWEEN RENEWABLE AND NON-RENEWABLE?
Only an idiot would presume that growth for commodities cannot peak.
i wasn't aware that old hubbert did such a sorry job of predicting the 1971 peak
Hubbert's forecasts start in 1956 with a forecast of a Texas Peak of 3.15-mbd in 1962. Then a 1971 forecast that the Lower 48 had likely peaked in 1966 with a URR of 165-Gb. He finally went on to forecast in 1976 that there would be a Global Peak of 101-mbd in 1995 with a URR of 2100-Gb.
"His prediction in 1956 that U.S.oil production would peak in about 1970 and decline thereafter was scoffed at then but his analysis has since proved to be remarkably accurate."
http://www.hubbertpeak.com/hubbert/
At the API Conference in 1956, Hubbert forecast the that the USA Peak would be 8.2-mbd in 1968 amid a URR of 200Gb.
In a feature 1971 Scientific American article (The Energy Resource of the Earth) he speculated that the USA was post peak and that it has likely occured in 1966 based on its being centered in "the 65-year period from 1934 to 1999". Most of us are familiar with his Hubbert Curve graphs displaying peaks for Global, USA and Texas oil extraction. He went on to state that "For natural gas the peak of production will probably be reached between 1975 and 1980".
As RR has stated, it is easy for Revisionists and Monday morning quarterbacks to look back now and say "it was obvious" and "these methods are excellent forecast tools"; but like Deffeyes and Campbell (and me), it is quite difficult to see the Peak as it is happening.
Hothgar has shown that there have been two three-year pauses. They were false alarms. There are many factors that can cause pauses. If they are in play, we need retrospect for confirmation.
Hubbert did not pick 1970. He clearly chose 1968, then revised that to 1966 (based on his methodology). But why let facts ruin a good thread, eh.
"If present trends continue, Dr. Hubbert estimates, production will peak in 1995 -- the deadline for alternative forms of energy that must replace petroleum in the sharp drop-off that follows." from "Oil, the Dwindling Treasure," National Geographic [June, 1974]"
key words "If present trends continue"
http://www.hubbertpeak.com/hubbert/
Oh my, the Revisionist is busy today. Please STOP cherry picking and misleading the members of our forums. In a follow-up Natinal Geographic feature article in 1976 (Two Centuries of Oil), Hubbert's graph and text was quite clear:
While it showed a 101-mbd Peak, it was revised in Science later in the year to show 110-mbd. Both showed a URR of 2000-Gb ... again, under estimated URR was the demise of his forecasts and exactly my point of why Peakists are so very wrong today both in terms of Peak Date, Peak Rate and Post Peak Decline. We are not running out of oil and to presume so and to promote so is absurd and misleading. There will be lotsa oil for a hundred years for our most precious needs. At a minimum, there will be 16-mbd extraction in 2107AD. As shown in another thread, it will likely be twice or three times that figure. Alarmism and the sense of Urgency is not helpful and easily dismissed by the science of the subject. RR knows this. Many of us at TOD know this. Too many do not...
Thank you for including the copy of the article.
From your text
"We are not running out of oil..." Key word "out", yes we will still be pumping (some) oil for a long,long time, I didn't think this was the point.
We in the US have gone from importing @30% in the 1970's to @60% today and you think I should be comfortable that we can continue to do so long into the future?
The UK is now an importer? Mexico is having problems, no? The lower 48 of the US?(Oh for chist's sake not that crap again right?) Alaska?
I think you are pissing up a rope. Come off it man, 30% to 60% are you daft(?) We should be doing something so that we are not vunerable to global events from nations tired of US interference, and that requires changes.
Details aside I think from a standback "big picture" view WT has it nailed and this is why you have such a problem with him. IMO PO in 2007 or 2015 woop de do! We are in "the zone".
So you think WT's claims will not stand up under tight review. You could be right and that would be fine with me seriously. I think you are missing the point. How do you build the replacement infastructure to offset declining oil production(opps! this is open for debate I forgot) while burning the fuel you need to build it, with little spare capacity. Where will the money come from?
My estimation is we will burn it before we get replacement infastructure, so you can relax. Us "lunatics" will stay addicted, buy and burn oil to the extent that we can afford to.
I think time will tell who is (more)right and who is got another agenda. I'm going to wait and see.
You are canadian no? Why would you want the US to use your natual resources in our big SUV's anyway? You like us that much?
it is fair then to say that your are a cornucopian ? or just a latent cornucopian ?
My position above is clear. The 13 recognized Outlook Models show me that we will have 16-mbd oil extraction in 2107. For the reasons above, that figure could easily double or triple. Shale becomes feasible at the $70 price point.
If u wish to debate or discuss these facts, fine. If u are merely trying to be an asshole, i have nothing further to discuss with u.
freddie, whay do you care about oil extraction in 2107 ? did you mean 2017 ? we cant reliably predict oil production in 2007 so what is the point. (of course one can average 13 estimates)
your postition appears to be clearly " dont worry be happy"
oil shale ? why not baked potatoes ? get real, we dont need to waste our dwindling resources on that.
i explained to you mbd refers to thousands of barrels per day ( in reservoir engineering parlance)
Do you really believe this? Or am I interpreting this out of context? To me, this is a highly illogical statement. Consider:
If oil production is in an accelerating state of decline, and that state of decline is SUPPLY-related (versus demand-related) then we would see an increase in both the spot and futures price of oil. We have not seen increases in these prices during the relevant time periods--quite the opposite, we have seen a substantial decline in oil prices.
Ergo, the only logical conclusion is that the recent decline in oil production is demand and not supply related.
Thoughts?
Hi Ener,
"We have not seen increases in these prices during the relevant time periods"
Thanks. Could you be a little more specific about the time periods you are referring to?
So, does your thesis here rule out a previous high price leading to "demand destruction" (anywhere)? (I'm trying to learn.)
1. When Deffeyes predicted increasing volatility, wasn't it based on this idea?
2. Is there anything else that might account for a lack of increase in both spot and futures prices?
3. In other words, when you say, "If oil production is in an accelerating state of decline, and that state of decline is SUPPLY-related (versus demand-related) then we would see an increase in both the spot and futures price of oil.", you're sure about this?
4. Are any historical examples relevant at all?
Hi Aniya,
The time frames I'm referring to are the period that Westtexas cites frequently when he is discussing the decline--for the last 1-1.5 years or so.
As for "demand destruction," I dislike that term as it doesn't really mean anything. It's not a term used in economics; it's a recently coined term as far as I can gather. A more accurate term would be "demand reduction." A subtle difference, perhaps, but a very important one because "destruction" implies that's it's gone for good (or at least a reasonable time frame), which isn't necessarily the case.
In my humble opinion, if the people who are calling for a peak right now are correct they are either:
1) Visionaries who see something that almost no else does, or
2) Very lucky, or
3) Correct simply by virtue of calling for a peak every year until it actually occurs.
If we are peaking right now wouldn't it be reasonable to assume that there would be people out there with connections to big $ who would also be seeing all the signs? Wouldn't it also be reasonable to assume that a barrel of oil in 7 years time will be far more valuable than a barrel of oil today?
If so, then those with money should be pouring it into longer range futures. The fact that we are NOT seeing this leads me to believe that those with or connected to $$ do not believe we are peaking. Which leads me to points 1), 2), and 3), above.
Very well put, Ji. And often the doomers are victims of insufficient information that others possess. Or they have the same info, but misinterpret it.
Take yesterday's 8% vs 2% discussion. Ron et al saw the sky falling. Yet this Presentation has been discussed twice since early November and the MSM and pundits did not put out a "BREAKING NEWS" flash on it.
Why was that? Well sorry, but most at TOD got it wrong yesterday by Ron's (hopefully) unintentional spin.
Let me elaborate via a simultaneous post here and in yesterday's thread:
"It is not a matter of being true (Dragonfly), moreso of being correct. When we discussed this document last month (and in Nov) i mentioned that readers should take care when reading Nawaf Obaid's text 'cuz his is the realm of KSA Security ... not geology.
Ron's pg16 includes glaring errors with "decline rate" and "depletion rate" used interchangeably. Therefore, one cannot use logic to interpret Ron's points.
"decline rate" refers to the drop in extraction rate as expressed in "mbd"
"depletion rate" refers to the drop in URR as expressed by "Gb"
In almost all cases, Obaid means depletion rate of reserves ... not monthly or annual production.
Going back to the presentation, it is typical KSA or Aramco rhetoric in their press releases and presentations to include how much field decline is happening each year. This one is no different.
On pg6, they openly admit that the "present" operating fields face the reality of an 0.8-mbd/day decline rate. On their published production rate of 8.6-mbd, this equates to 9.3% YOY (not net). It is clear that some older fields suck big time.
But if one turns to pg9, one sees that the planned closure of the older fields, unshuttering of dormant fields and opening of new fields brings to their operations a new decline of 0.5-mbd on proposed production of 10-mbd in 2009 (assuming maintenance of the 2.55-mbd surplus capacity). This equates to a decline rate of 5% YOY in 2009 and drops to (non net) 4.6% by 2011.
Ron is neither right nor wrong. He is neither brilliant nor an idiot. Mistakes happen. This was one that confused many (but not all). I studied Geology and Economics in university. All of us at TOD have our specialties with which to contribute via formal Education or Schools of Hard Knocks."
yeah freddie, i studied music heritage "in university" but dont call me a musician
correction to my above text: (Almost) All of us at TOD have our specialties with which to contribute ...
But on your page for your unsuccessful run for the legislature you also make no claim for any kind of degree. Classes got a little hard in the end did they?
http://hutter.ca/
I thought demand destruction was just another regular Econom 1 term, happy to hear it is not the case.
People stop (or reduce) their buying of x because they become poor and can no longer afford; because the same function can be fulfilled in another way; because new and better is just well better; because fashion and material signs of social status change; because communities enact laws that prohibit buyers from indulging; because new discoveries supersede old ones; because they want change at any price; because prices rise in an artificial way; because they die, so can’t buy, or whatever.
Calling all that ‘demand destruction’ is a cop-out, ie. attributing a post hoc blanket cause to an observed result or present state-of-affairs.
Absurd.
Hi Ener Ji,
Thanks for responding.
re: "people...calling for a peak right now.." Well, I haven't received a response from my question list below, so I'll just put this one on hold, if ok.
re: "demand reduction". Did you happen to read Deffeyes's ideas about increasing volatility? I believe there have been some TOD posts on this, as well. Wonder what you think of the idea, regardless of which term one uses.
I know very little about these kinds of markets. I had thought the idea was that yes, the barrel would be more valuable in 7 years - *unless* there is sufficient "reduction" that it is not valuable. In other words, that one might expect an overall rise, while still having increasing volatility, which, if the swings are big enough, poses a special problem. (However, I do not know how long-term futures work.)
So, if increasing volatility, how would this impact your thesis here?
re: "...a barrell of oil in 7 years time..." What you are saying makes sense...
1) Just mulling this over... unless there are psychological or emotional factors that come into play on the part of "those with money". My experience is that money, education and just about any other category I can name, does not necessarily mean one is able to accept or even investigate the concept of "peak", especially given the implications (no matter what one imagines them to be.) What I'm trying to say is: the emotional difficulty of the topic may be a factor. (In any case, I have noticed it is difficult in a way few things are.) I don't have anecdotes to draw from wrt people w. huge lots of money, so I don't know if they form a special category.
2) Did you read the Rainwater interview in Forbes? If so, how does this fit in with what you're saying?
3) Do you believe that Dick Cheney knows about "peak", (given his oft-quoted talk (http://www.energybulletin.net/559.html) If so, what do you suppose his actions to be in relation to this? Would you consider him to be someone in the "$$" category?
Sorry Aniya, I'm still relatively new to following peak oil and I'm not familiar with much of the material you cite and don't have time to look it up right now.
I probably should check out some of Deffeyes' work one of these days as it's so frequently cited around here...
Hi Ener Ji,
Thanks for responding. I thought your original point raises a very interesting question. I'd like to know how others on the forum (who understand markets better than I do) might respond. It might be worth trying to "search" for previous posts.
Just to summarize, my questions for you are directed towards wondering if there are other factors that might enter in to "people w. mega-money" either 1) not really being able to come to terms w. "peak" and thus not acting in the way you suggest (long-term "bets") or 2) knowing and realizing that perhaps such action would actually contribute to a "pre-peak" situation, which might be disastrous,(i.e., destroy the very market they want to make money off of). Richard Rainwater doesn't say this, but says something similar -http://money.cnn.com/magazines/fortune/fortune_archive/2005/12/26/8364646/and/or 3) since I don't know enough about how markets work, I don't know if there might be something about how they function that would result in a high volatility situation meaning people do not "place long", even though the overall direction is "higher price".
Anyway, Kenneth Deffeyes has a website. He has predicted increasing volatility, so you could always write to him and ask him why.
They are.
The energy futures markets used to be "backwardated" -- contracts farther away were cheaper than contracts for nearterm delivery. This was like getting a discount for agreeing to buy something ahead of time. And this was what you'd expect because with excess production capacity, the most likely issues were too much production or insufficient demand.
Currently though, energy futures markets are in "contango" -- contracts farther away are more expensive than contracts for nearterm delivery. The market now reflects the likelyhood that future energy will be more scarce and demand will exceed supply.
Well stated. You appear to have your numbers in order.
"Lets get a few facts interjected here before your spin cycle goes into full gear.
Fact: There were 14 fields world wide that produced more then 1 million bpd in the 1980s
Fact: 13 of those 14 fields are confirmed to be in decline or have crahsed
Fact: Since the 1980s, oil production globally has increase by over 20 million bpd.
Now that that is out of the way, in answer to your question, I want to make sure that it is properly framed to everyone here. You believe that when all 14 fields go into decline, we will have a global decline in oil production.
How then, do you explain the fact that when 13 of those 14 fields went into decline, we still managed to increase production by 20+ million bpd"
Obvious potential answer would be the transfer into production of new discovery oil fields previously unexploited, as well as the revival of Russian oil.
I think it's pretty safe to say that the pace of full new field discovery has declined significantly and Russian oil is now being produced with more modern methods.
It isn't just the decline of large fields, but the low probability of new fields to take their place.
I don't have to explain anything.
You're right, you don't. You are free to just keep on repeating the same things, without explaining or proving any of them. That appears to suit the owners of this forum just fine.
History has proven my statements right,
Really? I've seen no such proof, but maybe i missed something.
So tell me: What statements exactly?
Are you arguing that the giant fields are not declining?
Or that there's oil coming from somewhere else? And if so, from where?
Is there a possibility that massive investemnts in horizontal drilling play a role?
Anything else?
No, you don't have to explain. It's like taking the fifth.
Wow! Just Wow!
Are you suggesting that oil production did not in fact increase by over 20 million bpd during the same period of time in which 13 of the 14 super giants declined and crashed? I'm sure the world would like to know that we are in fact only producing around 55 million bpd now, not the 85 we currently have!
As I said, you don't have to explain, feel free, but this is not an explanation, once again. Weak.
TOD = Trolls Obfuscating Daily
I find little value in the comments of the few who are hijacking this site.
Moving on:
http://timesofoman.com/inner_cat.asp?cat=4&detail=2566&rand=usSZNm3gHL0A...
Do you really want to discuss and think? Or just be an annoyance. You are still ignoring the fact that production increased during the time you are describing due to the opening up of entirely new, virgin oil regions with large previously untouched oil fields. They compensated for the decline and added new production (together with infill drilling and eor strategies). No such region is currently in development now or realistically on the horizon (Barent's Sea is an oil bust so far, Greenland (it anything is there) is likely decades away at best). If you added Cantarell, Ghawar, Burgan together they are equal to a lot of the other fields you are referring to and their decline is worth that of many other of the fields put together.
Your question is a good one, but it doesn't seem you are looking for thoughtful answers. There is a big difference between then and now which is obvious. If you are looking for where the new fields are (and there are many under development), there are good studies out there by Koppelar and Skrebowski, and their authors do not believe we are at peak yet. They can give a basis for their views and list their assumptions, the main variables which are unknown being rates&timing of decline for existing fields and true status of KSA fields which none of us know. Depending on these unknowns, peak could range from now (or just past) to several years in the future.
Hello Mathew,
Your current post looks for me like a big improvement, short, easy on the eyes and right on target. I agree that The Oil Drum is more on a technical side, no rhetoric here please.
Your predictions may come to pass - or not - but what seems contrary to your point of view about Ghawar being in decline is the fact that professional oil traders all seem to be of the view that there would be far too much oil on the market today but for the VOLUNTARY withholding of production by KSA and other OPECers. How can you be so sure that KSA production capacity is declining for Hubbertian reasons when the pro's seem to be of a very different mind?
Hi oilaholic,
Thanks for another version of the question.
"How can you be so sure that KSA production capacity is declining *for Hubbertian reasons* when the pro's seem to be of a very different mind?" (attempt to add emphasis).
As far as I'm trying to sort this out: (And please feel free to comment on my efforts) (and apologies for boring anyone):
1. Jeffrey is positing Hubbert as an explanation for the decline, not visa-versa, so I'm not sure he has to add any reason to be "so sure". In other words,
a. Jeffrey holds that the production data up till now is sufficient to apply HL, and
b. HL has a prediction range for "peak". (Jeffrey, is this an accurate re-statement?) and
c. Within the range (specificity welcome, I'm being general), Jeffrey says, "This is it."
In addition, he's listed his "coincidences". (Which I would try to look up if I thought I wouldn't lose my page here by doing so.)
2) As far as how to account for the differences of opinion, namely:
Camp A: Jeffrey, and others: As stated above.
Camp B: The current rates are within peak range prediction, (yes?), however...we are not there. Yet.
My questions to "Camp B" are
1. Do you subscribe to HL?
2. Do you agree (if stated accurately above) there is enough data to apply HL?
3. Do you subscribe to an HL *range* for peak? If so, what is it?
4. Do you have any other criteria (HL or otherwise) for determining peak?
If so, what are they?
Examples: a) As I asked Hothgor the other day, is there a number of months after which you/Camp B is willing to say, "peak was in month 1"?
What exactly do you mean by Colder? Are you talking about the artic?
There is a temperature gradient in the earth that increases about 1 to 2 degrees F for each 100 ft of depth.
Yes colder(above ground) areas - working conditions that add expense - Alaska the artic - all add cost compared to say Bakerfield California. Does this matter as a percentage of cost? Probably not, we will take it if we can get it.
Where is "the tipping point"
At what price does it cause economic disruption I will not ever try to guess. Disruption imho would be from a spike or outright shortage. In little ways x many thousands of oil users price will affect decisions. Things will slowly contract over many years if we are lucky. Look at how tight the situation has been over the last severl years. Look at China selling all those cars. A larger war in the ME could cause some big problems for everyone.
The head of Schlumberger said "We've only just begun" deep-water drilling in their most recent quarterly conference call. He specfically mentioned the Gulf of Mexico but was reluctant to name customers. (It wasn't Nabors, my mistake the other day).
Interestingly, his wavering response to the question about onshore North American gas drilling led to him to say that the end of February will "tell the tale" (I think were his words) about the future of onshore gas. His tone seemed negative and grumpy that the analysts were so curious about this geographical area.
(Although it seems I'm talking to myself) The gist of Schlumberger's view is that a lot of production is going to come online in the spring in North American natural gas, and as a result drilling activity may decline, and therefore Schlumberger may be impacted. It seems economics is still at play in the gas world -- higher price is still creating supply.
Also, the time frame for oil supply response was given as 2008 and 2009 due to the coming deliveries of new drilling platforms.
Hello WT,
Thxs for the WSJ link. What I want to see now is the White House and Los Pinos press corp to send volley after volley of questions to Bush & Calderon asking them what they plan to do about Cantarell's collapse.
1. Is SuperNafta the answer, or building the Border Wall sky-high?
2. Free-market to determine ELM, or can Mexico unilaterly hoard?
3. When Pemex goes broke, will the US IOCs buy it for mere pesos?
4. When Pemex's pensioners are denied funds, what then?
5. What is the future expected gasoline price in US & Mexico?
6. When Mexicans start attacking Pemex assets, does US Army protect?
7. Why didn't you practice Peakoil Outreach to inform people earlier?
8. Project 'Taking out the Rubbish' for Mexican poor like Zimbabwe?
9. When Mexican stock market & govt collapse--what then?
10. Long range plans: Is it rifles or wheelbarrows and bicycles?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
At a decline rate of 400,000 barrels per year, which seems to be both what David Shields and the internal PEMEX report is saying, Mexico will be at just about zero net oil exports at the beginning of 2010. It is already a gasoline importer, and not being an oil industry insider, I believe this relates to the general low quality of the oil they are producing (albeit there are some smaller new fields with high quality oil). They are however having better luck with increasing natural gas production, although the scale of NG production is much smaller than oil production.
Long before net oil exports hit zero, the Mexican government will face a severe financial crisis. At first, they will resort to traditional methods – inflationary deficit spending, military crackdowns on the poor, and begging for loans from the US government. On the later, most likely, Mexico will be able to borrow quite a lot directly from the US, or indirectly through some sort of guarantee/IMF/World Bank loans, before they are cut off. After all, "The Wall" has not yet been built, and those detention centers not quit ready.
I would not advise being in the Mexican stock market, being the peso may be devalued faster than any inflationary gain.
Unknown to may Americans, GWB has recently signed an exceutive order granting some Social Security benefits to illegal Mexican immigrants who had a valid work history in Mexico. So there is still some type of NAFTA cooperation going on, but it is questionable if super NAFTA will ever get off the ground.
I can't find a reference, but I remember that money sent back to Mexico by "guest" workers in the US is second only to current oil revenues in the Mexican economy. This order could be reversed soon if it already hasn't.
Plus, Mexico is facing more problems on its southern border:
Despite Crackdown, Migrants Stream Into Mexico
Hi Joules,
Just did a "google" - the second one seems to list a number of studies.
http://www.diggersrealm.com/mt/archives/000911.html
http://www.cairco.org/econ/econ.html
CM
So there is still some type of NAFTA cooperation going on, but it is questionable if super NAFTA will ever get off the ground
Saw Lou Dobbs late this week and he had the writer of some of the documents from some University, and Dobbs was hammering him about this CanAmMex thing. The guy looked nervious and Dobbs was putting a huge spotlight on him.
A lot of people got exposure to this subject on that show.
"10. Long range plans: Is it rifles or wheelbarrows and bicycles?"
I knew there had to be wheelbarrows there somewhere... ;-)
Anyway, I would say that my wheelbarrow is just about one of the most important tools here on the ol' farm, but I've got a nice mountain bike and, come to that, a trusty old Winchester 30-30, too. So it ain't either/or :-)
But I know what you're driving at...
Please forgive me if posted before:
http://www.msnbc.msn.com/id/16837817/
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On good days, the neighbors line up for her tortillas.
But these are not good days, and sometimes hours pass without any customers.
Mexico is in the grip of the worst tortilla crisis in its modern history. Dramatically rising international corn prices, spurred by demand for the grain-based fuel ethanol, have led to expensive tortillas. That, in turn, has led to lower sales for vendors such as Rosales and angry protests by consumers.
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Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
re: mexico's decreasing oil production ,on the day this was announced the msm attributed the rise in oil price to bush's proposal for expanding the spr (over a period of 13 yrs)
Exactly elwood, China has just completed stage one of their SPR initiative. They did it at a rate of 1-mbd/wk, precisely the rate i quoted on SOTUA nite that the usa would be targetting. It is a non story.