<This Week in Petroleum 9-26-07 The Oil Drum Declining net oil exports--a temporary decline or a long term trend?>
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132 comments on DrumBeat: September 27, 2007

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Stoneleigh on September 27, 2007 - 9:29am Permalink | Subthread | Comments top

A new guest post - Modeling Oil Production to Estimate URR - Saudi Arabia, Kuwait and the World - by Apparent Peak has been posted at TOD:Canada.

Figure 17: World production for crude plus condensate (seven logistics)

While most of the modeling analysis focused on determining a country's URR and the world peak production date, the analysis on supply ROC showed that the peak production date might not be the most critical time to pinpoint. A more critical time to pinpoint might be the "Apparent Peak", i.e. the point in time when the demand rate of change for oil exceeds the supply rate of change. The results from the foregoing analysis show that there is the potential to reach the "Apparent Peak" in oil production beginning as early as this year, 2007, or possibly 2008. If we are now in this critical time period, the world's ability to increase oil supplies at a reasonable price will be tested in a very short time or else demand destruction will be needed to balance supply and demand.

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westexas on September 27, 2007 - 10:10am Permalink | Subthread | Parent | Comments top

EIA crude oil data for Saudi Arabia (year to date for 2007):

2005: 9.6 mbpd

2006: 9.2 mbpd (-4.3%/year)

2007: 8.6 mbpd (-6.7%/year)

If Saudi Arabia were to average 9.0 mbpd in the fourth quarter, the decline rate would still be -5.6%/year.

FYI, net export decline rates (total liquids, EIA), actual for 2006 and estimated for 2007 based on year to date production and +9% increase in consumption (Rembrandt's estimate for first half):

2006: -5.5%/year

2007: -11.0%/year

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PeakTO on September 27, 2007 - 10:23am Permalink | Subthread | Parent | Comments top

WT, as usual...the net export number is definitely the one we need to fear.

As you mention, even if they increase production by 400Kbpd in 4Q (4/5ths of the quota change) they won't show an increase this year.

By May 2008, we will have 3 years of declining world oil production. When does the rear view kick in?

However, I suspect that many factors will in play in the economic, oil, food, global political arenas before we get to then.

Crude oil STILL is only 11.7 cents(US) a cup.

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ilargi on September 27, 2007 - 10:37am Permalink | Subthread | Parent | Comments top

Crude oil STILL is only 11.7 cents(US) a cup.

I like that kind of number. It makes me wonder how much cheaper that same cup has gotten in Europe and Canada this September.

Or, as Mr. Colbert put it last night:

"Our first president now has the same value as their first president, a duck."
(Canada's 1 dollar coin features a loon)

Still, I'm asking myself what both your comments have to do with the graph from Apparent Peak's article.

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PeakTO on September 27, 2007 - 10:39am Permalink | Subthread | Parent | Comments top

Mine - nothing in particular...I was responding to WT's post.

My post below and on TOD Canada refers to the Apparent peak and his logistics analysis.

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SacredCowTipper on September 27, 2007 - 10:41am Permalink | Subthread | Parent | Comments top

The peak is just behind us (11/2005?) and the mortgage scam unwinding may allow the signal to remain mixed up in the noise for a while. I just hope we don't go into a new president 1/2009 with the administration able to hand wave and waste more time on this most pressing issue.

Posted before but here is the nice graph of just how ugly stuff gets from 1/2008 through 7/2008 on the ARM scam front.

http://www.dailykos.com/story/2007/8/28/172611/602

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vtfarmer on September 27, 2007 - 5:44pm Permalink | Subthread | Parent | Comments top

WT--

OPEC numbers for KSA give averages of:

Year Production Quota
2005 9.406 8.984
2006 9.141 9.035
2007 8.552 8.587

Is the production decline due to geological limitations or due to quota declines (and part of that decline will simply be getting within the quota since they had been pumping in excess of quota)? Are the quota declines intended to mask geological limitations or because the world economies aren't crashing as OPEC thought they would in the face of $40+ oil prices, so why should OPEC sell oil this year for $70 a barrel that it could sell next year for $90?

Also, if KSA could average 9 mbpd for the last half of 2007 (its quota is 8.9), doesn't that support the argument that the declines are political, not geological?

Rick

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PeakTO on September 27, 2007 - 10:26am Permalink | Subthread | Parent | Comments top

(copy of post from TOD Canada)

Great analysis!

Your logistics analysis seems to reinforce the need for accurate URR estimates, as usual. Although, I think the lower numbers 'seem' to reflect the political realities we are witnessing.

IMO, your "APPARENT PEAK" concept has immense value and is reinforced by the realities of global interaction. The supply rate of change is slowing dramatically while the opposite is true for demand.

Even if we obtain a minor increase in production in All liquids in the next couple years...it will have to be offset by a dramatic decrease in demand BEFORE then...so the APPARENT PEAK(all liquids) is now or slightly in the past.

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HankF on September 27, 2007 - 6:44pm Permalink | Subthread | Parent | Comments top

I haven't seen this Blog in the Oil Drum Blog listing. It may be of value.

http://netoilexports.blogspot.com/

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ComplexAdaptiveSystems on September 27, 2007 - 7:38pm Permalink | Subthread | Parent | Comments top

That's the ugly graph

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cuchulainn on September 28, 2007 - 5:18am Permalink | Subthread | Parent | Comments top

This graph is horrible - although most of the underlying issues will be very familiar to all us oil-nuts here at TOD this is still a very well presented powerful graphic. The spreadsheet behind it is also available (follow the link) and is very well organized and clear. I love me them well-organized spreadsheets :-)

Cuchulainn

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132 comments on DrumBeat: September 27, 2007

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