Posted by Heading Out on December 23, 2012 - 5:40am
Tags: azerbaijan, caspian sea, iran oil exports, iran sanctions, iraq, kyapaz, kyrgyzstan, serdar, turkmenistan [list all tags]
As we come to the end of the year, Leanan continues to point to the many stories that now fill the media reporting on the perception that the time to worry about peak oil is over. However, as Darwinian perceptively points out, the global supply of oil (crude and condensate) is not going up with the celerity that most commentators are envisaging.
The global balance between available supply and demand is in a balance, where the amount of oil remaining available to meet a surge in market demand is quite small. OPEC (and largely Saudi Arabia), by adjusting their production, ensures that the balance is maintained and prices remain at a level with which they are comfortable.
In the December 19th TWIP, the EIA has explained, without endorsing the statement that the US might surpass Saudi Arabia in global fuel production, why that is a less important statistic than folk are generally making it out to be.
The EIA note, in their review, that this balance is predicated on a sustained production from the Middle East. Yet, for several years now, reliance on maintaining current supplies, and guaranteeing adequate supplies in the future has assumed a steadily growing production from Iraq. The EIA notes that it is in the combined production from Iran, Iraq and Saudi Arabia that contains the additional oil needed for significantly greater production. (Venezuela is also mentioned, though there are more obstacles to overcome before their oil production can increase).
There is, unfortunately, a down-side to the glee which many commentators have greeted the news of potential US production gains. With the assumption that North America (and for this Mexico and Canada are included) can reach the higher targets projected, there is less concern with ensuring that alternate supplies remain available, as world demand continues to rise. This failure to ensure “insurance” may well cause some significant changes in the global market in the non-too-distant future, should the existing projections prove overly optimistic. (And Leanan referenced Kurt Cobb’s more realistic assessment, on Friday).
Continuing on from six posts that looked at global oil production trends, we now turn our attention to oil consumption / demand, which in our opinion, is every bit as fascinating and important to understanding the global energy system. In this post we focus on Europe and North America using JODI data (Joint Organisations Data Initiative) which is based upon figures reported by national governments which we therefore assume to be reliable. The JODI data base is not complete. Reporting began in January 2002. Most OECD countries have a complete set of reports but a number of countries like China only began to report in January 04 and many developing countries have a patchy reporting record. Russia and the former states of the Soviet Union do not report oil consumption figures at all.
Figure 1 This group of 11 countries classified as "Europe Core" combined show near uniform demand for oil products for the past decade. We consider this to be a somewhat remarkable trend since oil prices rose from $31/bbl in 2002 to >$100/bbl in 2008 (annual averages). Following 2008 the world has witnessed the biggest financial crisis since 1929. And yet demand for oil in this group of countries has been hardly affected by these momentous events. Note that this group includes Switzerland and Norway, neither of which are members of the Euro or the EU. These 11 countries typically have strong manufacturing / exporting economies. It seems likely that none will have significant oil fired power generation. All have modern motor vehicle fleets that already deliver fuel economy much higher than in N America. All but Norway are dependent upon imported oil.
Oil Watch posts are joint with Rembrandt Koppelaar.
This is a guest post by Andreas Ligtvoet a PhD. Researcher at TU/Delft department of Energy and Industry in the Netherlands. Andreas is a contributor to EniPedia (energy wiki), a site that his colleague Chris Davis created and maintains.
The effort to get a better grip on peak oil runs into the problem of data availability, data accessibility and data quality. As most TOD readers will recognise, there seems to be data asymmetry between the oil producers (NOCs and IOCs), international energy agencies, and the general public. Some transparency has been achieved by streamlining and organising data collection, e.g. through the JODI initiative. However, this encompasses top-down data collection that runs the risk of being polluted by non-data-driven incentives (the political need to over- or under-report, for example).
Click below the fold to read this discussion on the need for savvy open-source data gathering and to learn more about EniPedia.
Posted by Rembrandt on December 17, 2012 - 3:20pm
Tags: conference, economics, edinburgh, electricity, energy, fossil fuels, global energy systems, nuclear, renewable electricity, shale oil, unconventional, united kingdom [list all tags]
Our energy system is evolving due to depletion of cheap fossil fuels and the need for carbon emission constraints. Government and business are under pressure to tackle the energy challenges of rising energy costs, energy security, and reducing greenhouse gas emissions. We witness rapid changes across countries as this evolution takes place, steered both by markets (investment decisions) and government (policy decisions).
It is essential for energy professionals to stay well informed with the latest insights in this evolving world. For this reason, Euan Mearns of The Oil Drum, myself and several others, are organizing the first three-day Global Energy Systems conference, which will take place in Edinburgh, United Kingdom from June 26 - 28 2013. The conference is meant to deliver key updates on the most pressing energy issues and challenges facing our energy system, as well as providing a forum for exchange of substantially different viewpoints. It is supported by several universities and research institutes including University of Aberdeen, University of Edinburgh, Oxford Research Group, Chatham House and others.
The scope is deliberately very broad, covering most primary energy sources, so that a global view of the current energy system can be presented. Session topics include “the limits to easily accessible fossil fuels”, “frontier fossil fuel technologies and basins”, “the viability of nuclear power”, “the costs and benefits of fossil versus renewable electricity”, and “the economics and policy of energy systems”. A few of our confirmed speakers include Michael Kumhof (IMF), Sir David King (Oxford University), Arthur Berman (The Oil Drum), Ian Emsley (World Nuclear Association), Lord Ron Oxburgh (House of Lords UK Parliament), Peter Jackson (IHS CERA), and Thomas Ahlbrandt (former USGS WPA, Ahlbrandt Consulting).
Read below the fold for an overview of the conference programme and confirmed speakers to date.
With the possibility that demand for Iranian oil may fall below 1 million barrels a day (mbd) as sanctions continue to bite, Iran has announced that it wants OPEC to cut back production to the agreed quotas, rather than the overall additional 1 mbd that is actually being produced and sold. Such a move would, of course, make it more difficult for those customers who have found a way to replace Iranian oil, and perhaps incline them more toward disregarding the embargo.
OPEC has just released their December Monthly Oil Market Report (MOMR) in which they anticipate that earlier projections for 2013 oil demand growth will still be valid at 0.8 mbd. (Though they note that December 2012 growth y-o-y was at 1.0 mbd as the US economy continued to improve). They expect that all of this increase will be met by non-OPEC increases in supply, and that demand for OPEC oil may even drop 0.4 mbd. Part of that projection continues to rely on increased US crude production, and the EIA TWIP of December 5th had the latest chart showing that projected growth, based on the newly released Annual Energy Outlook 2013.
Figure 1. Projections of future growth in US crude oil production. (EIA TWIP) from Annual Energy Outlook 2013)
As a footnote to that graph, the Alyeska pipeline pumped an average of 582,755 bd in November, which brings the annual average up to 544, 625 bd. It is clear from looking at that plot that the gains in production are assumed to come from increased production of the "tight" oil deposits that have produced the overall gains achieved to date. The optimism of this projection goes a little beyond the levels that I anticipate will be achieved.
Figure 1 North American (USA, Canada and Mexico) total liquid fuel production stood at 16.3 million bpd in august 2012. 9.0 million bpd was conventional crude + condensate comprising 55% of the total.... 5 more charts below the fold.
Oil Watch posts are joint with Rembrandt Koppelaar.
Posted by Rembrandt on December 13, 2012 - 4:56am
Tags: automobile, car fleet, corporate average fuel economy, fuel efficiency, oil, oil consumption, united states [list all tags]
This is a guest post by James Hamilton, Professor of Economics at the University of California, San Diego. This post originally appeared on the Econbrowser blog here.
A lot of attention has been given to the optimistic assessments of future U.S. and Iraqi oil production in the IEA's World Energy Outlook 2012. However, perhaps even more dramatic is the report's prediction of a significant long-term decline in petroleum consumption from the OECD countries. For example, the report predicts about a 1 mb/d drop in U.S. oil consumption by 2020 and a 5 mb/d drop by 2035 relative to current levels. I was curious to examine some of the fundamentals behind petroleum consumption to assess the plausibility of the IEA projections.
Posted by Euan Mearns on December 10, 2012 - 12:40pm
Tags: africa, eia, energy information agency, europe, global total liquids, middle east, n america, non-conventioal oil, oil watch, shale oil, tar sands [list all tags]
Monthly oil production data reported by the US Energy Information Agency (EIA) offers several advantages over the equivalent data published by the International Energy Agency (IEA). First and foremost, the EIA report natural gas liquids separately enabling a more in depth analysis of underlying crude oil and condensate (C+C) production, they report data for a larger number of countries and make data available to download as XL spread sheets.
Asian oil production (C+C+NGL) has been on a plateau of 8 million bpd for over a decade. FSU oil production has been on a plateau of just over 13 million bpd for 3 years. African oil production has been on a plateau of 10 million bpd for 6 years and S American oil production has been on a plateau of 7 million bpd for over a decade. That is 38 million bpd of global production, or just under half, that has been static for many years.
European oil production (C+C+NGL), centered in the North Sea is in steep decline, down from a plateau of 7 million bpd a decade ago to 3.2 million bpd in August 2012.
The loss of European production has been compensated by rising production in N America and the Middle East. Rising production in N America comes mainly from unconventional oil - shale oil and tar sands.
Deducting N American shale oil and Canadian tar sands production from global C+C shows that the latter has been on a plateau of just over 73 million bpd since May 2005 with a near-term peak of 73.3 million bpd in April 2012. All of the growth in global total liquid fuel supply since May 2005 has come from natural gas liquids (NGL), unconventional oil, refinery processing gains and from biofuels.
Figure 1 Global C+C less tar sands and shale oil (US Bakken, US Eagle Ford and Canadian Bakken) has been on a bumpy plateau of just over 73 million bpd since May 2005. In May 2005 Iraqi production was just recovering from conflict and has since come back strongly. Currently Sudan is offline, Syria is all but off line and Iran is being squeezed out of the market by sanctions. The ups and downs reflect masterly control of supply by OPEC. Data sources: Energy Information Agency, National Energy Board Canada, Statistics Canada, North Dakota Drilling and Production Statistics, Railroad Commission of Texas. The chart includes a 150,000 bpd assumption for Canadian Bakken 2011/12.
Posted by Heading Out on December 9, 2012 - 6:15am
Tags: asean, china, egypt, india, iran oil exports, iran sanctions, natural gas, russia, south korea, syria, turkey [list all tags]
There is a lot going on in the Middle East at the moment. The revolution in Syria seems to be entering some form of end game, and there are the riots in Egypt. There are some signs that these events might move into countries such as Jordan. Increasing levels of turmoil in the Middle East do not help stabilize the future flow of oil and natural gas around the world, and there are underlying tensions, brought about in part by the need to sustain sanctions against Iran.
Turkey, for example, is caught up in dealing with Syrian refugees and the adjacent civil war and is also largely dependent on Iranian fuel to get it through the winter. In October, Turkey is reported to have imported 75 kbd of Iranian oil with larger portions of the total 417 kbd import coming from Iraq (105 kbd) and Russia (103 kbd). The volumes that continue to flow are now becoming a source of friction, since US law demands that countries continue to lower their imports every six months. While Turkey continues to work to lower their need for Iranian oil (and may increase imports from Russia), in the interim the U.S. Government is not increasing pressure but instead, is apparently moving to extend the waiver of sanctions not only to Turkey, but also to a total of 21 countries, a list that includes China, India, and South Korea.
Two officials said an announcement of the six-month extensions was expected from the State Department on Friday. The officials spoke on condition of anonymity because they were not authorized to publicly preview the step.
In addition to China, India, and South Korea, the waivers will apply to Malaysia, Singapore, South Africa, Sri Lanka, Turkey and Taiwan. All nine were originally granted six-month renewable exemptions from the sanctions in June.
The exemption means that banks and other financial institutions based in those places will not be hit with penalties under U.S. law enacted as a way of pressuring Iran to come clean about its nuclear program.
A total of 20 countries and Taiwan have been granted the waivers. The others—Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, the Netherlands, Poland, Spain and Japan—will come up for review in March.
This is the final installment of the tour of global crude + condensate + natural gas liquids (C+C+NGL) production data as published by the International Energy Agency (IEA) and deals with the rest of the world. OPEC and OECD production was described in earlier posts.
After many decades of growth, Chinese oil production appears to have stalled in 2012 at just over 4 million bpd. It remains to be seen if this is a temporary glitch or whether this heralds peak and decline in Chinese oil production.
Russia + Former Soviet Union (FSU) production has been on a plateau for 3 years at just below 14 million bpd. Russian production continues to grow slowly offset by declines in other FSU states.
Oil production in Oman peaked at 960,000 bpd in 2001 and declined steadily to around 700,000 bpd in 2008. An aggressive program of enhanced oil recovery (EOR) has turned things around and production has risen by over 200,000 bpd in the last 4 years and Omani production is challenging the 2001 highs. There are profound lessons to be learned here about the potential impact of EOR on heavy oil fields and future global production.
Columbia has also seen a reversal of fortune with new field developments reversing declines and new production highs just under 1 million bpd have been set in recent months.
Figure 1 Oil production has been largely flat in South and East Asia over the decade, rising slowly from 2002 to 2011 and since then in gentle decline. Production in China and India has been rising offset by declining production in Indonesia and Malaysia. All data published in this interim report are taken from the monthly IEA Oil Market Reports.
From May 2007 to August 2010, Rembrandt Koppelaar published an e-report called Oil Watch Monthly that summarised global and national oil production and consumption data from the International Energy Agency (IEA) of the OECD and Energy Information Agency (EIA) of the USA. This is the fourth in a series of new Oil Watch reports, co-authored with Rembrandt and details crude oil production data for the Rest of The World as reported by the International Energy Agency. Earlier editions: