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24 comments on A White Christmas

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Freddy Hutter on December 24, 2005 - 5:57pm Permalink | Subthread | Comments top
We are clearly at least five years away from Peak.  The IEA has in the past published supply and demand  outlooks six quarters ahead into the future.  These are the basis of quota (and price) decisions by nations, firms and OPEC.  Now they project out 'til 2010.

And their data gathering on contracts and production coming on stream indicates that extraction will increase a minimum of 1.25-mbd annually from 2006-2009 culminating with a global production rate of 91-mbd in 2010.  Growth areas are the ME, Brazil, Canada, Angola & the Caspian region.  All this talk of Peaking in 2005 is plainly silly stuff.

Of our 11 scenario modelers, only Campbell shows a near peak (85-mbd in 2010), yet global production already exceeds 84-mbd in 2005.  He will shortly be revising upwards once again.  If we are near peak, who are the modelers that are forecasting this?  Where is their data?  And why aren't the other modelers that are Peak-friendly revising downwards?

Crying wolf just discredits the discussion.  Hurricane damage to infrastructure and distribution caused a short term loss of almost 1-mbd.  We have already exceeded the pre-hurricane extraction rates.  To presume that the summer slump was indicative of peaking is pure folly and i would expect better from TOD posters that have followed trends of the last three years.

The road from 1950 has been a bumpy one.  But 2005 was not a pothole.  And there are none in the foreseeable future.  If refining capacity is not increased, there is questionable purpose in increasing production.  That would hold us to a plateau ... not negative growth.  But even as we speak, Alberta is contemplating a major refinery.  

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peakearl on December 24, 2005 - 8:23pm Permalink | Subthread | Parent | Comments top
While I'm not saying we have peaked, I will wait for IEA to revise November to see what the real numbers are. Surely you saw Stuart's discussion of revisions made. I think it doesn't serve to poblish preliminary, inaccurate numbers either. As far as i can tell, IEA in chronically wrong in its predictions of production, as has been abundantly shown. We disagree mostly in how much faith to put into their estimates. They have been profoundly wrong in regions very well known, and I don't think they'll do better with poorly defined regions.
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peakearl on December 24, 2005 - 9:13pm Permalink | Subthread | Parent | Comments top
I never intended to carry the torch that "peak is now." I figure we'll find out when the time comes anyway. I have just been impressed by the anaysis by those here and elswhere that seriously examines decline rates and their effects. It was an inadequate consideration of decline that led experts to miss the peaks in the US, North Sea and elsewhere, but they don't seem to learn from this to revise their world models. It was the study of declines vs additions that lead Simmons to his correct (within 1-2 years) predictions of North Sea peak and US natl gas peak, when other experts ridiculed this idea. I'm just concerned that this may repeat itself with world production at some point. You previously said you don't concern yourself with depletion/decline rates - but this is where the essential problem lies, and where modeling has been falling short.

I read Rembrandt's report, and have great respect for his study. He also uses very conservative decline estimates, starting at 3%, while other estimates range from 5 - 8%. This difference alone is enough to dramatically move the peak, and no one can say for sure what the number is. That is why I take all predictions with a grain of salt. I'll think I'll drop  this line of argument now, though. I'll just keep watching the numbers.

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Stuart Staniford on December 24, 2005 - 11:24pm Permalink | Subthread | Parent | Comments top
Well said.  At this point, there is only moderate levels of disagreement on how many new projects are coming on stream in the various bottom-up projections.  It's all about decline rates.  They are murky, but I think peak=Real Soon Now because FIP decline rates are >6% is at least as credible as peak>2010 because decline rates are <5%.  More work is needed to clarify the situation further.
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Engineer-Poet on December 26, 2005 - 9:53am Permalink | Subthread | Parent | Comments top
Of course Alberta is considering a new refinery.  The old ones aren't well-suited to processing bitumen.
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Agric on December 29, 2005 - 9:18pm Permalink | Subthread | Parent | Comments top
We are clearly at least five years away from Peak.

My first reaction to your comment was "Oh really... ?"  Freddy. But you make a fair justification for it so I feel I should do likewise.

It mostly depends on four things:

  • will decline rates be as predicted
  • will planned projects come onstream as planned
  • will significant demand destruction occur (major economic slowdown)
  • will geopolitics disrupt supply

Any of these could radically change the date of peak oil. It IS perfectly feasible that peak oil has happened in 2005 - if half Saudi production was taken out tomorrow for 10 years it would be almost certain. Odds are that PO will happen in the next 10 years regardless, and if decline rates are higher than predicted 2010 may be optimistic.

One should not rely on always seeing potholes before hitting them ;)

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