<Gasoline Prices Part II: Long-Term Factors The Oil Drum DrumBeat: June 14, 2007>

119 comments on I've Been Encouraged Before...

Comments can no longer be added to this story.

| Show without comments | PDF version

andyh on June 13, 2007 - 11:55pm Permalink | Subthread | Comments top

Its a grand piece, well done the INDEPENDENT. I have been badgering David Smith (the Sunday Times economic editor) about PO - he is extremely dismissive, but maybe this piece will finally make him think.

On a related note is it possible that Greenspan has been reading the Oildrum?

All of a sudden he is on to the brewing Mexican crisis:

http://money.cnn.com/2007/06/13/news/international/bc.usa.economy.greens...

One of the great things about this site is that you get to see and hear about these problems way before the mainstream (in the same way as RR developed the petrol run up in the US several months before it happened).

So mighty plaudits to all those who have been banging the Mexican drum (Westexas etc etc - you know who you are).

Comments can no longer be added to this story.
SailDog on June 14, 2007 - 8:41am Permalink | Subthread | Parent | Comments top

I also wrote to David Smith - he believes CERA and OPEC. He would be extremely surprised if production did not increase as EIA predict. TOD are amateurs and doom-mongers, therefore no credibility.

I find his sort of arrogance irritating, but the fact that he is influential makes things worse. He does not have a good grasp of energy detail, but then with attitudes like his, how could he?

Comments can no longer be added to this story.
MUDLOGGER on June 14, 2007 - 8:55am Permalink | Subthread | Parent | Comments top

I have stopped bothering to write to him.

Heh, Heh, he must of gotten sick of Peakists over the last 2 years.

The Independent Story (for all its technical faults) is basically a gauntlet. A challenge to the BP Statistical review.

Its out now, and that is something.

Maybe time for some serious media discourse now.

Headline was a bit grabby, but thats what headlines are supposed to do. It grabbed everybody at work today.

Comments can no longer be added to this story.
Starship Trooper on June 14, 2007 - 9:51am Permalink | Subthread | Parent | Comments top

He might believe CERA and OPEC (while ignoring CERA's complete and utter blunder on the natural gas production peak in the US). But if you notice CERA (Yergin, in particular) are off on a biofuels/ethanol jag and others like Lynch (SEER) have been pretty quiet (seems like their "back to $30/barrel by the end of 2004" didn't quite work out).

What's really interesting is that some "doubters" keep arguing the fact that the 1997 Science artcle by Campbell and Laherrere the graphic shows a peak occurring in 2004 (although the article says sometime before 2010) and that Campbell was "wrong," once again.

They have a little difficulty when I point out the peak production for oil + condensate is the month of May 2005 (with December 2005 coming in a very close second) and according to my calendar it's now June 2007. So, what does it matter that the article shows a possible peak in 2004 and it occurred in 2005? Let the economists find the oil.

As I point out, there is a very easy way to prove that peak production has not occurred...six consecutive months of production of crude and condensate greater than 74.2 million BPD.

As for the EIA, the other day I finally got around to running a Hubbert Linearization on the EIA's reference case (which only goes to 2035), That curve takes a complete bender from the current H-L curve(since 1982) that is "aimed" at 2200 GB URR, and heads off "aimed" (2006-2035) at 4400 GB URR.

But if Smith believes the EIA, then he must also believe in the "collapse" that the EIA has routinely shown in their curves once the peak arrives (since the total area under the curve constrains the total production and the EIA has selected a R/P of 10 after the peak) as they have attempted to dismiss the possibility of a near-term peak. If Smith thinks that a drop of 55 MMBPD over a five year period is no problem, then he might wish to explain how thas going to be "no problem."

It's totally understandable. Why bother people with a problem that they (and you, as the responsible reporting agency) are unprepared to address.

Comments can no longer be added to this story.
westexas on June 14, 2007 - 12:31pm Permalink | Subthread | Parent | Comments top

Re: Mexico

The key point about Mexico today is that it is a real life example of the Export Land Model (ELM) in action. Based on Pemex data from 1/06 to 4/07, we observed the following:

Annual Rate of Decline in Crude Oil Production: 4.6%

Annual Rate of Increase in Crude Oil Consumption: 10%

Annual Rate of Decline in Crude Oil Exports: 16%

And once again, the various discussions down the thread of various world crude oil decline rates ignored the critical aspect of the ELM. Consider the following graph of US oil production, versus petroleum imports and consumption: http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_4.pdf

We see the gradual increase in crude oil production from 1950 on, the peak in 1970, a slight rebound because of Prudhoe Bay and then the decline resumes. Key Point: During the entire time period that this graph shows, the US was a net importer. Or let me put it this way, if the US were the sole source of crude oil exports for the world, world crude oil exports would have ceased around 1950.

Consider another real life case history.

Based on EIA data, we observed the following for the UK from 2000 to 2005:

Annual Rate of Decline in Total Liquids Production: 6.4%

Annual Rate of Increase in Total Liquids Consumption: 0.7%

Annual Rate of Decline in Net Exports (Total Liquids): 60%

I think that almost everyone--including yours truly--is underestimating the deadly effect on the world industrial of economy of the ELM.

Comments can no longer be added to this story.

119 comments on I've Been Encouraged Before...

Comments can no longer be added to this story.

| Show without comments | PDF version