Peak Oil Update - September 2007: Production Forecasts and EIA Oil Production Numbers
Posted by Khebab on September 22, 2007 - 10:15am
Topic: Supply/Production
Tags: Ali Morteza Samsam Bakhtiari, bp, chris skrebowski, eia, logistic, loglets, m. king hubbert, oil, rembrandt koppelaar, Robelius, update [list all tags]
An update on the latest production numbers from the EIA along with graphs/charts of different oil production forecasts.
World oil production (EIA Monthly) for crude oil + NGL. The median forecast is calculated from 13 models that are predicting a peak before 2020 (Bakhiarti, Smith, Staniford, Loglets, Shock model, GBM, ASPO-[70,58,45], Robelius Low/High, HSM). 95% of the predictions sees a production peak between 2008 and 2010 at 77.5 - 85.0 mbpd (The 95% confidence interval is computed using a bootstrap technique). Click to Enlarge.
Executive Summary:
- Broad revision (from 1980 to 2004) by the EIA this month but not significant in amplitude.
- Monthly production peaks are unchanged:
- All
Liquids:
the peak is
still July 2006 at 85.54 mbpd (
0.11 mbpd), the
year to date average production in 2007 (6
months)
is 84.28 mbpd (
0.02 mbpd), down 0.07 mbpd from 2006 for the same period. - Crude Oil
+ NGL:
the peak date remains May 2005
at 82.09 mbpd (
0.01 mbpd),
the
year to date average production for 2007 (6
months)
is 81.20 mbpd (
0.04 mbpd), down 0.06 mbpd from 2006. - Crude Oil
+ Condensate: the peak date remains May 2005 at 74.30
mbpd (
0.15 mbpd),
the
year to date average production for 2007 (6
months)
is 73.23 mbpd (
0.14 mbpd), down 0.25 mbpd from 2006.
- NGPL:
the peak date is still February 2007 at 8.03 mbpd (
0.21 mbpd),
the
year to date average production for 2007 (6
months)
is 7.97 mbpd (
0.18 mbpd), up 0.19 mbpd from 2006.
- Decline in crude oil + condensate continues: June 2007 estimate for crude oil + condensate is 72.82 mbpd compared to 73.11 mbpd one year ago and 73.92 mbpd two years ago.
- Average forecast: the average forecast for crude oil + NGL based on 13 different projections (Figure above) is showing a kind of production plateau around 81 +/- 4 mbpd with a decline after 2010 +/- 1 year.
Notations:
Fig 1.- World production (EIA data). Blue lines and pentagrams are indicating monthly maximum. Monthly data for CO from the EIA. Annual data for NGPL and Other Liquids from 1980 to 2001 have been upsampled to get monthly estimates. Click to Enlarge.
Table I - Production
estimate
(in millions of barrels per day (mbpd)) up to June 2007 taken from
the EIA website (International
Petroleum Monthly). 1Moving Average
on the last 12 months.
Fig 2.- Range of previous monthly revisions for All Liquids (top), crude oil + condensate (middle) and NGPL (bottom). Click to Enlarge.
The cumulative change in production estimates are shown on Figure 3. The 2005 annual production for all liquids has been revised up by 0.5 mbpd since initial estimate.
Fig 3.- Cumulative change in production numbers since first estimates are issued for each month. Click to Enlarge.
Fig 4.- Production forecasts assuming no visible peak. Click to Enlarge.
Fig 5.- Forecasts by PeakOilers based on bottom-up methodologies. Click to Enlarge.
Fig 6.- Forecasts by PeakOilers using curve fitting methodologies. Click to Enlarge.
Table II. Summary of
all the
forecasts (figures are in mbpd) as well as the last EIA estimates.1Productive
capacities. 2Difference
between the observed production for 2007 and the predicted value (in
mbpd), the value in bold indicates the best forecast (i.e. the oldest
with the lowest difference.
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
- mbpd= Million of barrels per day
- Gb= Billion of barrels (109)
- Tb= Trillion 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 (June)
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 February 2007) for crude oil and lease condensate (noted CO) on which I added the NGPL production (noted CO+NGL).
The All liquids peak is still July 2006 at 85.54 mbpd, the year to date average production value in 2007 (6 months) is down from 2006 for all the categories except for NGPL. The peak date for Crude Oil + Cond. remains May 2005 at 74.30 mbpd (see Table I below).
Fig 1.- World production (EIA data). Blue lines and pentagrams are indicating monthly maximum. Monthly data for CO from the EIA. Annual data for NGPL and Other Liquids from 1980 to 2001 have been upsampled to get monthly estimates. Click to Enlarge.
| Category | June 2007 | June 2006 | 12 MA1 | 2007 (6 Months) | 2006 (6 Months) | Share | Peak Date | Peak Value |
|---|---|---|---|---|---|---|---|---|
| All Liquids | 84.50 | 84.21 | 84.65 | 84.28 | 84.35 | 100.00% | 2006-07 | 85.54 |
| Crude Oil + NGL | 80.72 | 80.83 | 81.34 | 81.20 | 81.26 | 95.52% | 2005-05 | 82.09 |
| Other Liquids | 3.78 | 3.38 | 3.30 | 3.08 | 3.08 | 4.48% | 2007-06 | 3.78 |
| NGPL | 7.89 | 7.72 | 7.90 | 7.97 | 7.78 | 9.34% | 2007-02 | 8.03 |
| Crude Oil + Condensate | 72.82 | 73.11 | 73.44 | 73.23 | 73.48 | 86.18% | 2005-05 | 74.30 |
| Canadian Tar Sands2 | 1.47 | 0.99 | 1.31 | 1.42 | 1.06 | 1.74% | 2007-03 | 1.57 |
Revision Pattern
There was a big revision this month for almost the monthly estimates:There was also a mistake in the May production from Canada that briefly went up by almost 1 mbpd! Overall, we can see that production for crude oil and condensate has been revised up around May 2005 and June 2006 but revised down for the first quarter of 2006 and 2007. NGPL production has been revised down for almost all the months since 2003. However, the cumulated amount of revisions do not exceed 0.5 mbpd.Important Changes This Month
In this release of the International Petroleum Monthly there are two major changes:
(1) Petroleum demand data for OECD countries, other than the United States and the U.S. Territories, have been revised for 1990-1994 based on the International Energy Agency's (IEA) annual review of historical OECD petroleum data, the results of which were released in the August 10, 2007 version of the IEA's Monthly Oil Data Service. Revised data are shown in bold italic font.
(2) Petroleum production data for 1980-2005 have been revised to match data in the recently released Petroleum Production Time Series Tables of the International Energy Annual 2005. Revised data are shown in bold italic font..
World petroleum production data for the month of June 2007 and the Second Quarter of 2007; and OECD country petroleum demand, imports, and stocks data for the month of May 2007 have been added.
Fig 2.- Range of previous monthly revisions for All Liquids (top), crude oil + condensate (middle) and NGPL (bottom). Click to Enlarge.
The cumulative change in production estimates are shown on Figure 3. The 2005 annual production for all liquids has been revised up by 0.5 mbpd since initial estimate.
Fig 3.- Cumulative change in production numbers since first estimates are issued for each month. 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 4.- 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 April newsletter (#76): 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).
- PhD thesis of Frederik Robelius (2007): Giant Oil Fields - The Highway to Oil: Giant Oil Fields and their Importance for Future Oil Production. The forecasts (low and high) are derived from this chart.
- Forecast by TOD's contributor Ace, details can be found in this post.
Fig 5.- 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 as well as a review on TOD. The current estimate was done in 2005 based on BP's data (CO+NGL).
- The Hybrid Shock Model is a variant of the shock model described here. The forecast is based on EIA data (up to 2006) for crude oil + condensate, the ASPO backdated disovery curve and assumes no reserve growth and declining new discoveries.
Fig 6.- Forecasts by PeakOilers using curve fitting methodologies. Click to Enlarge.
| Forecast | Date | 2005 | 2006 | 2007 | 2010 | 2015 | Diff2 | Peak Date | Peak Value |
|---|---|---|---|---|---|---|---|---|---|
| All Liquids | |||||||||
| Observed (EIA) | 84.63 | 84.65 | 84.32 | NA | NA | 2006-07 | 85.54 | ||
| IEA (WEO) | 2004 | 82.06 | 83.74 | 85.41 | 90.40 | 98.69 | -1.09 | 2030 | 121.30 |
| IEA (WEO) | 2005 | 84.00 | 85.85 | 87.64 | 92.50 | 99.11 | -3.32 | 2030 | 115.40 |
| Koppelaar | 2005 | 84.06 | 85.78 | 86.61 | 89.21 | 87.98 | -2.29 | 2011 | 89.58 |
| Lahèrrere | 2005 | 83.59 | 84.47 | 85.23 | 86.96 | 87.77 | -0.91 | 2014 | 87.84 |
| EIA (IEO) | 2006 | 82.70 | 84.50 | 86.37 | 91.60 | 98.30 | -2.05 | 2030 | 118.00 |
| IEA (WEO) | 2006 | 83.60 | 85.10 | 86.62 | 91.30 | 99.30 | -2.30 | 2030 | 116.30 |
| CERA1 | 2006 | 87.77 | 89.52 | 91.62 | 97.24 | 104.54 | -7.30 | 2035 | 130.00 |
| Lahèrrere | 2006 | 83.59 | 84.82 | 85.96 | 88.93 | 92.27 | -1.64 | 2018 | 92.99 |
| Smith | 2006 | 85.19 | 87.77 | 90.88 | 98.94 | 98.56 | -6.56 | 2012-05 | 99.83 |
| Crude Oil + NGL | |||||||||
| Observed (EIA) | 81.46 | 81.38 | 81.12 | NA | NA | 2005-05 | 82.09 | ||
| GBM | 2003 | 76.06 | 76.27 | 76.33 | 75.30 | 67.79 | 4.79 | 2007-05 | 76.34 |
| Bakhtiari | 2003 | 80.24 | 80.89 | 80.89 | 77.64 | 69.51 | 0.23 | 2006 | 80.89 |
| ASPO-46 | 2004 | 81.00 | 80.95 | 80.80 | 80.00 | 73.77 | 0.32 | 2005 | 81.00 |
| ASPO-58 | 2005 | 81.00 | 82.03 | 83.10 | 85.00 | 79.18 | -1.98 | 2010 | 85.00 |
| Staniford (High) | 2005 | 77.45 | 77.92 | 78.31 | 79.01 | 78.51 | 2.81 | 2011-10 | 79.08 |
| Staniford (Med) | 2005 | 75.81 | 75.94 | 75.97 | 75.52 | 73.00 | 5.15 | 2007-05 | 75.98 |
| Staniford (Low) | 2005 | 70.46 | 70.13 | 69.71 | 67.92 | 63.40 | 11.41 | 2002-07 | 70.88 |
| IEA (WEO) | 2006 | 80.10 | 81.38 | 82.67 | 86.50 | 92.50 | -1.55 | 2030 | 104.90 |
| Koppelaar | 2006 | 81.76 | 82.31 | 83.68 | 91.00 | NA | -2.56 | 2010 | 91.00 |
| Skrebowski | 2006 | 80.95 | 81.47 | 82.64 | 87.37 | NA | -1.52 | 2010 | 87.97 |
| Smith | 2006 | 80.53 | 82.81 | 85.45 | 91.95 | 88.60 | -4.33 | 2011-02 | 92.31 |
| Loglets | 2006 | 81.12 | 82.14 | 83.02 | 84.65 | 83.26 | -1.90 | 2012-01 | 84.80 |
| ASPO-76 | 2006 | 77.92 | 79.00 | 81.35 | 90.00 | 85.00 | -0.23 | 2010 | 90.00 |
| Robelius Low | 2006 | 81.45 | 82.19 | 82.50 | 81.84 | 72.26 | -1.38 | 2007 | 82.50 |
| Robelius High | 2006 | 81.45 | 84.19 | 86.67 | 93.40 | 92.40 | -5.55 | 2012 | 94.54 |
| Shock Model | 2006 | 80.76 | 80.43 | 80.01 | 78.27 | 73.74 | 1.11 | 2003 | 81.17 |
| Crude Oil + Lease Condensate | |||||||||
| Observed (EIA) | 73.81 | 73.57 | 73.16 | NA | NA | 2005-05 | 74.30 | ||
| ASPO-46 | 2004 | 72.80 | 72.56 | 72.25 | 71.00 | 63.55 | 0.91 | 2005 | 72.80 |
| Deffeyes | 2004 | 69.94 | 69.93 | 69.84 | 69.02 | 65.99 | 3.33 | 2005-12 | 69.95 |
| ASPO-58 | 2005 | 73.00 | 73.80 | 74.65 | 76.00 | 69.50 | -1.48 | 2010 | 76.00 |
| IEA (WEO) | 2006 | 70.80 | 71.78 | 72.77 | 75.70 | 80.30 | 0.40 | 2030 | 89.10 |
| CERA1 | 2006 | 76.49 | 76.89 | 78.60 | 82.29 | 83.83 | -5.44 | 2038 | 97.58 |
| ASPO-76 | 2006 | 71.11 | 72.10 | 73.66 | 78.00 | 72.00 | -0.50 | 2010 | 78.00 |
| HSM | 2007 | NA | 73.56 | 73.53 | 72.82 | 69.53 | -0.37 | 2006 | 73.56 |
| Ace | 2007 | NA | 73.48 | 73.03 | 66.96 | 58.47 | 0.13 | 2006-01 | 73.55 |
Next update probably in December.
Previous Update:
June 2007February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
OilWatch last issue:
Khebab: What is interesting is that you have 9 forecasts for all liquids listed and not one correctly forecast a decline in all liquids from 2005-2007. This implies that there is a strong optimistic bias in the forecasts.
Or that the other forecasts are merely following trends. If you notice on the lower left hand corner of the graph, there was a period of 3-4 years in which oil production globally was on a similar plateau. Even the ASPO seems to think we will have a tick up in oil production for a peak in the 2010-2012 time frame.
Or that the forecasts are for TOTAL (estimated) cumulative production (integral of the function in the graph), not accurate day-to-day production rate.
Hence, estimates will be 'wrong' for month-to-month estimates, even if they might be dead on accurate about the actual final production in the end.
I doubt some people would be happy with any forcast if it doesn't show an immediate and continual decline nor follow the month to month fluctuations perfectly!! (Sarconal)
Re: Cumulative Production Versus Annual Production Rate
That is the point I made in the June, 2007 article on HL:
In Defense of the Hubbert Linearization Method (June, 2007)
http://graphoilogy.blogspot.com/2007/06/in-defense-of-hubbert-linearizat...
The Russian HL plot did suggest that Russia should be declining soon, which is why I found the following article interesting:
http://www.themoscowtimes.com/stories/2007/07/10/042.html
Tuesday, July 10, 2007. Issue 3695. Page 5.
The Moscow Times: Alfa Report Sees Trouble Looming in Russian Oil Sector
By Anatoly Medetsky
Staff Writer
Nice work and that 13 forecast average for the Crude and condensate is a neat, very intriguing projection.
FF
I think that you will find his net export projections to be even more interesting. He did a low, middle and high case for both production and consumption, resulting in a range of nine estimates for when consumption = production in key exporting countries. It's not a pretty picture--to be delivered at ASPO-USA.
The three key points that we will emphasize are:
(1) Once a region peaks, only a small percentage of post-peak production will be exported (for the ELM, about 10%).
(2) Net Exports decline much more rapidly than overall production declines (-28%/year and -5%/year respectively for the ELM).
(3) A Net Export decline tends to accelerate with time (from an initial year over year decline of -12.5% for ELM to a final year over year decline of -47.5%).
Yes, this, but also hoarding. (I don't like the word with its negative connotation -- squirrels hoard to survive.) The rise in the price of oil will overwhelm the incentives to invest in extraction -- letting it just sit there will give a far better return (putting it in purely financial terms, which I don't like either). This too will amplify the dropoff as well as amplify the likelihood of far wider and bigger war.
We have plenty of use for the remaining oil even if its to expensive to waste driving SUV's. It will still be a valuable commodity for a long time. I doub't it will ever be cheaper than it is today for very long. The time scales of moving off of oil even with major breakdowns are longer than the depletion curve. So outside of total collapse oil will be a expensive item for the foreseeable future.
memmel
These are thoughts that I don't have the maths to quantify. As the Export Land Model kicks in, there will be a rapid distruction of the export capacity because no one can afford to keep up seldom used tankers. They might be used as loating storage tanks, or just scrapped out by the owners.
The same will be true for dock facilities, the chemical plants and rfineries will need a lot more storage if they are open, but many more will be scrapped and the specialty vslves and steels in the process piping recycled for use elsewhere. The field engineers and crews who know how to set up and operate the tanks and pumps will be scattered, perhaps to become people with entirely different job skills like farming or shoe repair. Permanent changes will soon hit the downstream segment of the industry. With changes like these, we might see quick, permanent demand distruction that permanently depressed the price of crude. Stuart Staniford was suggesting that this could happen in his post a couple of weeks ago.
Bob Ebersole
Good points. This is along the same vein of my concern about the oil industry itself in a high price oil environment. Expensive oil will have a negative impact on our ability to pump oil. Your talking about later on.
I'd say overall your probably right. Actually the worst problems are not crude itself but refineries. Its a huge investment to create and maintain a modern petrochemical refinery and the downstream plants. These do not scale well.
Well you just managed to lower my doomer quota a notch. I think your right. However I've been a big fan of micro scale reactors for chemistry but these make more sense with biofuel to plastic/jet fuel etc.
http://en.wikipedia.org/wiki/Microreactor
So believe it or not I'm still optimistic.
Actually on that matter most people think I'm a super doomer I'm actually not. Our current lifestyle is unsustainable and we need to make major changes. In the short term we will have problems but a sane modern lifestyle that is low impact is quite possible and doable. The only sad part is probably at a much lower population level than today.
Even high estimates of sustainable population indicate that billions will probably die so we are looking at more people dying in a short period of time then have ever died in our history even WWII pales in comparison. So on on hand I'm optimistic and think eventually we will live within our plant on the other outside of miracle we are probably facing the darkest period in human history.
So for me the saddest part of our current culture is it has encouraged a unsustainable living pattern throughout the world its not the wealthy man having problems fueling his SUV but the poor farmer who now cannot get goods to market or fertilizer because he became dependent on oil. Everyone is addicted to oil and we will pay the price.
memmel,
we will definitely pay a huge price, but the die-off predictions seem improbable to me except from the threat of war. About 1/5th of the world's population lives in India, Pakistan and Bangladesh on the arable land which is about the same square kilometers as the US east of the Mississippi. But they don't do it in 2,000-5,000 square foot McMansions driving a SUV, the diet is vegetarian mostly with dairy products, and the lifestyles of the poor aren't very long. In China I don't have a comparison of the arable area, but its equivalen. They have a bunch of non-arable areas like Tibet and the central Asian deserts of Inner Mongolia and other northern and western provinces (thats western from a chinese viewpoint) which don't have the water to farm.
I don't know any real way to estimate the wealth of the US, but we have 300 million people on about the same area. It lets us eat a carnivorous diet, have clothes and shoes only limited by our closet space, and closets the size of huts housing whole families in rural Asia. We have free public education through high school, and could be free in the Universties too with our social wealth and with accessable loans and grants. We fall down badly on public health, but its still better and more acessable than over half the world. We are rich, yet many people say our lifestyle is "non-negotiable" and we are threatening the world with resource wars instead of conservation. Bob Ebersole
The lifestyles of the poor aren't likely to be all that short, either, since life expectancy in India is 68 years. Less than the 78 years of the West, but not terrible. (For comparison, China clocks in at 73 years.)
From the links above, China's land is 15% arable, or 1.4m sq km, while India has 49% of its land arable (one of the highest percentages in the world), which gives them 1.45m sq km. So it's within a few percent.
For comparison, the US has 18% arable land, giving it 1.65m sq km, but has a shorter growing season (since it's further from the equator).
Does anyone have a link to the original statement? All I've ever been able to find is people's (angry) responses to it, so I've never been able to determine what the context of the statement was.
My guess is that Cheney was saying Americans' freedom is non-negotiable, not their SUVs, and I'd like to be able to confirm or deny that hypothesis.
I believe it was Bush that stated that the American Way Of Life is non-negotiable.
It was Bush, Sr., not Jr., and it was apparently said at the 1992 Rio Summit in response to discussions about limiting environmental damage (including GHGs).
Ref: http://www.sourcewatch.org/index.php?title=New_World_Order
Note: You can find other references as well but I can find no direct quote for this either. Of course, in 1992 not everything was immediately sucked up into the WWW either. However, the attribution makes much more sense (to me, at least) as it is not as vacuous as the supposed Cheney statement and is precisely the sort of thing I would have expected from Bush Sr. and the conservatives at that point in time.
I can find no credible evidence that Cheney ever made the statement that so many attribute to him. If someone has that evidence, I would be most interested in seeing it. Thanks in advance!
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Ahh, that makes more sense.
Googling for lifestyle+not+negotiable turns up mostly links attributing the phrase to Bush Sr. at the 1992 Rio summit. The Cheney-related attributions are not only less numerous, but none I found gave an indication where or when he is supposed to have said that, making it almost certain that the source you found is correct.
Thanks for digging that up!
I think the Cheney quote that you have in mind may be this one "conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy".
http://www.time.com/time/nation/article/0,8599,127219,00.html
Yes, but conservation is a silver BB. One more BB than the current energy "policy".
RobertInTucson
I haven't escaped from reality. I have a daypass.
As I recall the non-negotiable lifesyle statement was by George H.W. Bush back in the 80's when he was VP, but I sometimes have a bad memory for things like that. I won't use it again, but the point is a lot of Americans think that they are entitled to a wasteful way of life and that no one has ever had a different life in the US. Population densities can be a lot higher than they are currently without endangering life or health. And although much of the northern United States has severe winters, much of the south can have two crops a year. I was raised in Houston and live in Galveston, and around here we raise tomatos to be planted as sets right now and harvested near Thanksgiving and greens and lettuces grow all winter.
many people seem to lack a hisorical perspective. When I was a young teenager i asked my three surviving grandparents about their lives. My father's father was the eldest of 11 children, and his father ran a hotel by the railroad in Lincoln, Nebraska, had a quarter section of wheat (160 acres) and also was a carpenter. My mother's mother was the youngest of five and her father had a ten acre farm and worked in a shoe factory part time. My father's mother father was the only one in the bunch who very wealth, he had a prosperous business building streets in Omsha. My point is that most people in the US did several things to make a living, and just as Westexa suggests in his ELP idea, they ere all
Interesting that you should mention "seldom used tankers", just the other day I read about the richest man in norway (an owner of oil tankers) and his problems regarding alot of spare capacity in the tanker market. Freight rates are apparantly just about as low as they can go without the freighters losing money. The article says they are hoping for OPEC to increase production so they have something to put in their ships. Even more interesting, tankers are being converted to bulk freight already.
took me 20 min to find the article again on account of me thinking it was on na24.no I had read it, but it turned out to have been on e24.no :), but here it is for those of you who read scandinavian.
I suspect that the oil tanker market is biased by the fact that existing single hull oil tankers must be retired by 2010. So while new conformant double-hull ships are being built to replace existing single-hull ships, there is an excess number of ships to carry the expected oil. After 2010 it should become obvious, assuming a 2005 peak of crude plus condensate, that there is less oil to ship each year and that the less efficient crude carriers will be idle.
"Permanent changes will soon hit the downstream segment of the industry. With changes like these, we might see quick, permanent demand distruction that permanently depressed the price of crude. Stuart Staniford was suggesting that this could happen in his post a couple of weeks ago."
A non linear event. As the Power Laws kick in.
To be preceded by and accompanied with "Shock Doctrine"
(Naomi Klein).
Even today, Klein notes, Chile remains one of the most unequal societies in the world. It's shock therapy miracle shifted "wealth to the top and shock(ed) much of the middle class out of existence."
It's the way it works everywhere and a glimpse of the future: "an urban bubble of frenetic speculation and dubious accounting fueling super-profits and frantic consumerism, ringed by ghostly factories and rotting infrastructure of a development past; roughly half the population (excluded); out-of-control corruption and cronyism; (decimated) nationally owned small and medium-sized businesses; (mass) transfer of (public) wealth (and resources) to private hands (accompanied by) a huge (shift) of private debts into public hands." Inside the Chilean bubble was paradise. Outside was "The Great Depression." Bubble-benefitters reacted with "junkie logic: Where is the next fix?"
Israel attacks Syria's just delivered N Korea
cargo with a message to Iran.
How many times did you see this headline this week:
US Devalues It's Currency
Arkansaw of Samuel L Clemens
Bakhtiari is still looking good.
boy (girl) he sure is.
Thanks
FF
Leanan: I see that- and he forecasts an 11 mpd drop in the next 8 years. Between B+B (Bakhtari and Bernanke) we might see four digit crude oil by 2015.
Of course. That's for sure. Now, which will go faster, the dollar downwards, or the oil upwards? Bets are accepted.
More probably, petrol will be rationed by 09.
And deflation is the worry. Not inflation.
Crude could trade at $45. But a bottle of beer would cost
a dime.
See "The SIV's are worthless fro details."
Arkansaw of Samuel L Clemens
Actually I suspect we are going to see something rather remarkable instead of pure inflation or deflation. My suspicion is that certain products such as oil will continue to cost very much if decline outpaces demand destruction and due to inflationary actions by the US Federal Reserve so long as the dollar remains the world's currency but at the same time many other things will collapse in price. So oil might hit $150 per barrel and gasoline $6.00 per gallon but a $300,000 home might fall to $75,000 or lower.
Those who don't believe housing can fall that far, it already did fall even further once for the US south, especially in and around Texas, during the S&L debacle. I recall driving through Houston before I moved down here in the mid-to-late 1980s and seeing an incredible number of boarded up suburban homes visible from the interstate. It was a surreal sight. And yet at that time other products were still inflating in cost.
That is the future I expect, the "shock and awe" that mcgowanmc noted above that destroyed Chile's middle class and will probably destroy our own.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Housing consists of a lot of local markets so it is dangerous to offer generalizations. With that disclaimer . . .
The long run house price has been around 3x average family income. The current house price level is around 5x family income. So a 30% drop in prices is needed to get back to the long run average and a $300,000 home becomes a $200,000 home.
Markets tend to overeact going up and down. Gas at $6 will force a lot of folks to relocate, and will drive up prices for all other goods. Throw in a weak job market and the future looks like a world of hurt.
You are presuming business as usual. You are free to make that assumption. I am not, however.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
I'd like to point out that the world creates 10% more goods and services in 2007 than it did in 2005 with approximately the same total liquids consumption.
See this IMF update
Globally the world is coping rather well (including most third world countries).
It's a dead link. Further, we have been discussing the future, not the last two years.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Sorry about the link in the previous post.
The IMF summary of recent world economic growth
I'm pointing out that world economic system has demonstrated it can grow strongly without increasing oil consumption.
That's also true for the developed world, as Germany demonstrates. Their oil consumption is down almost 10% in the last 10 years (EIA), and their total energy consumption is up less than 1% (EIA), but their real GDP is up something like 15% despite a flat-to-declining population.
Not the strongest growth, but still reasonable year-on-year per capita increases with stable per capita energy use and falling per capita oil use.
I'm pointing out that world economic system has demonstrated it can grow strongly without increasing oil consumption.
Only because it could compensate by producing more natural gas and coal. Peak natural gas is a few years away and peak coal is 2 or 3 decades away.
When oil production falls 10% below its peak, I don't see how natural gas and coal can compensate.
And I can point to 1979-1982 as a period when the world economic system did not grow and in fact contracted while oil supplies contracted. So what is your point?
My point is that there is obviously some boundary on economic growth as oil supply contracts. The fact that we cannot readily quantify that boundary speaks more about the voodoo called economics than it does anything else. Yet the boundary exists. Germany, often held up here as the efficiency wonder of the world, faces the same problem all efficiency gains face - an absolute maximum which cannot be raised. All they can do is use what they have better - 50%, 90%, 99%, 99.99%, etc. I don't know what numbers are actually involved but the absolute maximum economic activity that Germany can generate would be indicated by 100% usage of their existing energy stock (an impossibility but I point it out as the upper bound). To continue to grow after that would require more energy (increases in energy total)
Thus, energy is the key. If fossil fuel supplies contract, we can only get so efficient before further efficiencies lose cost effectiveness. At some point we must replace fossil fuel energy with other forms of energy in order to even maintain stability, nevermind growth. This is why there is so much discussion about nuclear, solar (of all types), biomass, hydrogen, etc., as ways of obtaining or storing energy.
Then on top of the contracting oil supply post-peak (whether now or later, once we peak, we've peaked), we have the further problem of climate change, which is directly entangled with fossil fuels.
So to continue to assume business as usual is your choice but I would caution that we appear to be on the verge of a combination of changes that may render the old business as usual mantra very obsolete. You are quite free to make whatever plans you choose based upon business as usual but I am not.
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Not true.
I've pointed this out before, but see, for example here. World real GDP growth slowed during the oil crises, and I think one of those years might have had real per capita GDP drop, but world real GDP growth for 1979-1982 averaged about 2% per year, and never fell below zero.
I don't agree.
There are obviously problems for economic growth if oil supply contracts too quickly, but there's no evidence that economic growth cannot continue if oil supply declines at a manageable rate.
As you say, the problem is energy supply, and what the infrastructure is set up to use. If current uses of fossil fuels can be replaced - and all evidence suggests that they can, with some difficulty - then economic dislocation is a question of decline rate.
For that, of course, all the old questions about efficiency gains, renewable energy cost effectiveness, and so on come into play.
Pitt - Your capacity for hindsight analysis is impressive. For those on the front lines, would you care to use your obvious considerable abilities to identify how that transition will occur, absent economic parity, or heck, just expanding thinking to economic externalities?
You've assumed from the outset that substitution is ongoing. I did not. My entire point was that, absent substitution, there is a physical upper bound on economic growth as oil supply contracts. Of course, when you begin to substitute that changes things but when purely examining oil, there remains the boundaries described by physics. To get past those boundaries we must substitute, which was my second point. By confusing those two (and given the clarity with which you normally post I can only conclude that you have done this deliberately), you have created a convenient straw man to knock down. Golly gee, Gomer! Yet the physical energy boundaries I described remain and cannot be violated by you or anyone else reading this post.
Further, if you actually go and read the IMF and World Bank websites where they discuss "GDP" they simply measure GDP in dollars. Worse, these are all estimates, provided by governments who have incentive to make the stats look good (a well documented practice we have discussed before on these forums). Now if the absurdity of measuring GDP in dollars (whose value is constantly changing) does not immediately rise to grab your attention, then we're just going to have to agree to disagree here.
Then you come back around and agree with me that the problem is energy supply! So exactly what were we disagreeing about again?
"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone
Of course, because it is.
Making plastics with NGLs is substitution (NGL for oil).
Switching from oil to coal electricity generation is substitution (coal for oil).
People buying smaller cars is substitution (conservation for oil).
Switching to electric heat - industrial or residential - is substitution (coal for oil).
Increased use of public transit is substitution (coal or conservation for oil).
Substitution may not be happening fast enough, or may not be able to scale large enough, but it's certainly happening at nontrivial scale already.
Invoking physics only works when you're dealing with a closed system, and "ignore everything except oil" isn't a valid closed system. It's like looking at the decline of whale oil consumption and concluding that the economy must have collapsed; the effects of substitution cannot be ignored entirely.
Typically in terms of purchasing power parity (PPP), which is much more stable than currency exchange rates. The Euro has gained 50% against the US$ in recent years, but that doesn't mean the average European can buy 50% more, so the per capita GDP in PPP terms has changed much less.
If you're saying the world's major governments - and major non-governmental organizations which are set to watch them - have been lying for decades about GDP growth, I'll have to disagree with you.
And the shadowstats guy - he claims that the purchasing power of the average American has fallen by 40% in the last 15 years, yet the fraction of income spent on different categories of goods is almost exactly the same. That's not what his claim would predict, but it's exactly what the government's claim of flat real income growth for the middle class would predict, leading me to ignore his unrealistic numbers.
Well, a number of things. Primarily, we seem to disagree whether it's useful to examine oil consumption while pretending that substitution can't be and isn't being done, and we seem to disagree whether real PPP GDP growth is a valuable economic statistic or not, and whether such government numbers are trustworthy enough to be useful.
I just took Econ courses in college and the professors even acknowledge the data from the gov't is off. Clinton rigged the BLS numbers when he removed discouraged workers as unemployed. Inflation hasn't been measured correctly since they instituted substitution methodology. I don’t know about you - but steak is steak, not ground beef, so the standard has fallen while inflation has eroded the true value.
The gov't does lie and it's going to take a lot more reading outside econ/finance to figure it out. Perhaps understanding government in general will be a start....I recommend the Politically Incorrect Guide to History as a start.
We havent been growing except on paper....
GreyZone,
Houston in the late 1980's was a "world of hurt". Prices in some neighborhoods headed down permanently, while in others there was scarcely a bobble. The difference was that the residents of some retained their good incomes, while in others the jobs went away permanently because of changes. Here's two specific examples: Alief and West University.
Alief was a suburb built by jobs in working class oilfield industries-the manufacturers of high tech equipment used in oil and gas exploration Stuff like geophones, the acoustic equipment used by seismic crews to record the vibrations that are interpreted by geophysicists to interpret the underground structure of oil and gas fields. For a number of years seismic companies cannabalised existing equipment, then when the market picked up the manufacturers moved overseas. Bye, Bye excellent working-class jobs, hello job as an assistant manager of a telephone room selling some worthless product or another. So the mortgage was walked, and the savings and loan sold the house for cash to a hard working thrifty immigrant family, or to a landlord who moved in any kind of renter to keep up cash flow. Alief went downhill permanently.
West University was a beneficiary of the first wave of gentrification in the Houston area. It was built from around 1930 to 1950 as a middle class suburb, the middle management and professionals at Major Oil Companies were the original residents, people like the geologists working for Gulf, or the design engineers for refineries. The houses were modest by today's McMansion standards, but very nice homes in a stable suburb that is now inner city by location, upper class by residency. Downtown, the Galleria, Rice University and the Texas Medical Center are all within 5 miles. There was scarcely a bobble in prices, and within 3 or 4 years developers were purchasing the more modest homes, tearing them down and erecting million dollar cookie cutter homes. And, with the current downturn its happening again. My parents bought a house in Southhampton, the Houston area next to the east side of West U for $21,500 in 1959. We listed it last week and immediately recieved a huge offer as from a tear down/rebuild contractor.
So yes, I think that cities will be ringed with poor suburbs and the inner city real estate will be very expensive if we go through another bust-boom-bust pattern instead of a die-off or a thoughtful reordering of society, because it doesn't have to be that way. If we would get away from the internal combustion engine for electric trains the suburbs will retain much value, especially if we change US laws to require companies to build their manufacturing in the US intead of subsidising their move overseas to nearly slave labor and tax avoidance of their fair share of the costs of our society (this year's poster child: Haliburton, already incorporated in the Caiman Islands is moving its headquarters to Dubai).
But mostly, if we want to stop population growth, we need to educate people so they can see that its in their own best interest to have only one child. We need to figure out how to make them prosperous enough to help that child be healthy, happy and have a life where both the parents and child are useful. We have to end the gross inequality and poverty that has 1.6 billion people living without access to an electric light, clean water and elementary education on less than $2 a day. If we want to stop climate change we need to get them to leap-frog to renewables and quickly wean ourselves from fossil fuels to renewables, while we help the big oil companies, car companies and coal companies change the core methods for generating electricity and have a place in the world.
This is a very tall order, but if we decide its undoable and don't do anything we're going to die, and not pleasantly and so will our planet and species. Its just that simple.
Bob Ebersole
As far as stopping population growth, it might be worth studying Western Europe; they've already pretty much stopped it. See http://tinyurl.com/2dn3re, especially the "Rate of Natural Increase" and "Population Change 2007-2050 (projected %)".
Also, I remember a quote that I can't seem to dig up again. It's from a UN field worker, who said "the best contraceptive for the Third World is education and empowerment of women".
Here's a hypothesis: in an environment where people (especially women) have reasonable control over their lives and adequate education, and relative stability over a few decades, human nature will lead to self-limiting populations.
How long will the world be able to sustain the people who are already here? Reducing the net birth rate to 0 by 2050 still leaves the world with a population of 9 billion. If the world cannot support its current population for another 50 years (as I strongly believe) then playing with fertility rates may be ethically safe, but is ultimately pointless. Realistic fertility reductions alone will not reduce world population in the short to medium term. Such a reduction is required if we are to arrive at any kind of sustainable balance with the planet and the rest of the species that share it.
In a similar vein, trying to reduce birthrates through Demographic Transition by industrialization is also utterly unrealistic due to the energy requirements. See this analysis.
As usual, I'm not saying we should be the agency of increased mortality, just pointing out that the usual suspects of empowerment/education and Demographic Transition are forlorn hopes when it comes to achieving a sustainable level of human numbers (or, more properly, human activity) on the planet.
And there you have it.
We get these constant "modelings" which
specifically exclude events that bring those models into question.
Blind Spots.
Two reports which negate the vast majority of these models:
My point — and I think Hansen’s point — is that the “when” (i.e. the rate of change) matters a lot! One meter by mid-century would be an unmitigated catastrophe. Sea level rise would have to average 9 inches a decade from now to 2050, implying seas rising over a foot a decade by then — which could continue for centuries. Who could adapt to that?
http://climatefrog.blogspot.com/
And here:
To discover whether mechanization is cost-effective, we must insert a number for hourly wage. If the laborer is self-employed, however, the figure for hourly wage seems purely imaginary: If costs are rising, for example, can the laborers not simply pay themselves less? Only to a certain degree. The laborer’s wage is often as little as it takes to keep body and soul together, but anything less than that subsistence wage would make farming impossible.
The rise in the price of fuel, combined with the hourly wage, then, determines the cut-off point for mechanized labor. When farmers pay themselves a certain amount for 6 hours of work, but the price of fuel is equal to that amount, the 6:1 ratio has been reached, and it would be reasonable for the farmer to give up mechanization.
http://www.countercurrents.org/goodchild220907.htm
Arkansaw of Samuel L Clemens
Yeah, Bakhtiari's WOCAP is the model that convinced me: Peak Oil is past history (2006), IMHO. It'll be interesting to see how close his projection holds over the ensuing years.
-best
Nice to see CERA are still on the money - or not.
Well, they are professionals, after all.
Show Me the Oil!
Yeah looks just like an 'undulating plateau'
Does anyone know where all these new sources of NGL are going to come from. Is someone starting to exploit the frozen methane reserves? does anyone have a response to this ?
Thanks.
I'd say it's all those big LNG projects....
That's how XOM has replaced production the last 4 years.
Bring the gas out of the North Field (Qatar), strip the NGl's, freeze the Methane and sell it to China.
I don't like NGL's mixed with crude and condensate since it is just different stuff (not transport fuel).
FF
Thanks for that FF I have seen an explosive growth in LNG production in the Timor Sea too. Freezing the methane must be a very energy intensive process in Qatar. I doubt that it is sustainable at current levels.
One thing that would be interesting to include in these charts is an indication of the price of crude oil fluctuations as they correlate to production volumes. It helps answer the question of whether these declines are a matter of supply/demand inconsistencies, or whether we're actually hitting some kind of production ceiling. From what I can see there's a clear pattern suggesting we're at a ceiling.
In that chart there are two clear declines in output. One is from roughly 1997-1999, and the other is roughly from 2001-2002 (I don't have the numbers used to generate that chart, so I'm just eyeballing it).
Inflation adjusted oil prices for the first decline:
1996 - 22.40
1997 - 20.39
1998 - 12.66
1999 - 17.78
Inflation adjusted oil prices for the second decline:
2000 - 29.54
2001 - 23.39
2002 - 23.78
2003 - 28.42
Clearly these are cases where we saw a decline in production because supply was higher than demand. Prices reflect that disparity. This makes perfect sense. Given relatively unconstrained supply, invariably, increased prices lead you to produce more to take advantage. Fluctuations happen as demand and supply come in and out of sync. What's telling about our current situation is that, against all precedent, production is flat in spite of prices going up substantialy.
2004 - 54.93
2005 - 47.97
2006 - 58.30
From 2003 to 2004, we saw the cost of oil nearly double and, as a result, production did increase a lot leading to a price decrease of roughly 25%. In 2006 though, the price climbed right back up and yet there's been no indication of producers pumping more to take advantage of the higher price. Now we're up to $80/barrel, a 37% increase over 2006 prices, and yet we see no evidence of increased production.
Bottom line is that, if they could pump more oil out of the ground, they'd be doing it. Since 2003, the price has nearly tripled and yet production is flat. So this suggests one of two things:
1) They cannot produce more oil in spite of the incentives
2) The cost to produce available oil is higher and thus the incentive, even at these prices, is not there
Either is indicative of us being at the peak.
I think there's an alternate explanation beyond your two.
1) They cannot produce more oil in spite of the incentives
Bottlenecks
From 1986 to 1998, oil prices were trending down. The incentives for new production and capital were low, especially when there were still projects and equipment from the heady days of the early '80s around. When oil hit bottom in 1998, it crushed every segment of the oil industry. During the 1998-2002 period, major production projects were not begun because the industry feared a return to $10 oil like in 1998. Absurd, in retrospect, but it was a very real fear. Demand for new equipment or personnel dried up. The five-year lay-off led to a loss of skilled workers in the field and a decline in the amount of capital equipment on hand - rigs, ships, etc - and a loss of ability to make new capital equipment.
Now they are playing catch-up. In the face of high prices and high demand, the bottlenecks have moved back from the well-head to related support industries. Now there are severe constraints on the manufacture of rigs and drilling ships, platforms, pipelines and recovery equipment, and especially in the training of experienced personnel.
The same factors in E&P affected refining. Falling oil prices cut into the margins that refiners could charge. Refinery capacity grew slowly and steadily from 1992 to 1997, and had begun to accellerate in 1998 - but the price crash put that expansion on hold for several years. Refining capacity is now back in line with that '92-97 trend - even though demand has grown substantially faster. There were lots of posts here last year about "Peak Refining". Even though more refineries are being built or expanded, it's perfectly reasonable to assume that oil producers are looking to the market and deciding that accelerating production in the face of limited refining capacity increases is foolish - it would just drive down crude prices, letting refiners capture the market premiums that limited final product supply is creating.
So there's an alternate theory to explain high prices and low production: bottlenecks in equipment and refining that destroy the incentives for greater production.
See this:
Orange = refining
Purple = Production
Pink = Price
1965-2007.
Here's a bigger version.
After the oil embargoes, refineries had substantial excess capacity. That has all vanished, to the point where we now have about as much refining capacity, proportional to production, as we did before the 1973 oil shocks.
Refining is the biggest bottleneck, and it's not growing fast enough to keep up with demand.
I'm not sure this proves its a bottle neck. Look to me we are back where we were before the oil shocks. I guess I don't see a issue either way. I'd note the ability to grow capacity in the past seemed pretty good pre-oil shock. I don't recall high oil price and complaints about capacity before the oil shocks and the spread is lower then than now.
Now I will say I'm not sure either way. The only way we could tell is for people to add more capacity and we would see oil production increase. It would seem to me if its a true refining bottle neck we would see the price spread between crude and finish products widen but the price of crude should not be high. Crude prices would have staid stable or declined. While a premium would have been paid for refining.
So I don't see this proves any thing either way. Refining is tighter than in the past yes but its actually higher than pre 1970 oil shocks so ...
With regard to refining and production related to price, additional insight might be possible if the mix between light-sweet versus heavy sour in both refining and production could be shown. There appears to be increasing conflict between available refining capability and mix of production.
Joe
Not really the countries with the ability to refine heavy sour crudes tend to buy it because of the price advantage. The US has fairly decent heavy sour capability.
The interaction of refining and supply is complex but globally its not clear that refining capacity is a bottle neck. If it was oil would be 20 dollars a barrel and the minimal OPEC cuts would not have mattered. The assertion that its THE bottle neck and peak oil is not happening does not seem to fit.
Now we are seeing refining problems potentially crude quality problems etc etc. Especially in the US but the US imports a significant amount of gasoline and we have not seen that this is a issue. If refining capacity was that tight we should have seen at least some problems importing.
I'm not saying that refining is not and issue but the claim that its the major problem does not seem to be true.
At peak one would not be surprised to see refining capacity tight since by definition we are producing the maximum amount of oil. But since the peak a few years ago oil production has slowly dropped and capacity has held steady or increased worldwide. Thus capacity could have only been the determining factor back in 2004-2005 time frame. If we had the capacity then and we are producing less oil now then by definition we have more spare capacity now then in the past.
We have had no indication from the market that they cannot accept more oil because they lack the ability to refine it.
With the high prices you would think that Non-Opec countries would be producing like mad and they certainly have had enough time to increase production to some extent. We have had high prices for what 4 years or so. And no response from the market ?
Excellent work, as usual ... but what does it all mean?
The IEA demand prediction line is what the supply will have to be if the world economy is to continue to grow as normal ... they say ~1.6% a year ... which is probably not far off.
Interestingly, if you draw a line from 2002 supply rate with 1.6% growth they are bang on target now!
However, if you draw the line starting in 2005 they are already several million barrels a day too optimistic! This implies world growth has been declining for two years or so.
The area under the IEA demand line is how much oil, in total, will be required if the world economy is to continue to grow as we have been used to ... as growth is vital to our way of life the IEA is tasked by the OECD to ask 'is there that much oil left in the world?' ... answer, Yes! ... but importantly, can it be got out of the ground at the rate required and supplied at a profit? Not at the moment it seems, so far (for two years) 'peak oil' or 'peak-lite' as predicted by TOD is correct, not the IEA!
Because of the steep rise in prices over the last 9 years or so we know that supply is constrained at the moment ... in the rough general direction of all the other lines on the graph ... either for geologic reasons or above ground reasons (or most likely a bit of both!)
If it continues like this, diverging from the IEA prediction, the graphs show world economic growth can be expected to fall away rapidly.
Geologic peak production is 'best case' ... the amount of oil available for import predicted by WestTexas' ELM is also 'best case' ... let's hope that above ground (political?) contraints that adversely affect both aren't too severe.
Clearly, from the graphs, we can expect negative economic change but it is the rate of change that is important ... to fast and we have disaster ... recent financial and global climate chaos events don't bode well!
Xeroid.