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November IEA global production
Posted by Stuart Staniford on December 22, 2005 - 1:21pm
Topic: Supply/Production
Tags: eia, hubbert peak, iea, oil prices, peak oil, plateau [list all tags]
Average monthly oil production from various estimates. Click to enlarge. Believed to be all liquids. Graph is not zero-scaled. Source: IEA, and EIA. The IEA raw line is what they initially state each month. The IEA corrected line is calculated from the month-on-month production change quoted the following month.
The graph above shows three estimates of average monthly global production since the beginning of 2002 (ie the doldrums after the tech crash in the world economy). The dark green line is the EIA estimate, which only goes through September 2005. The thin blue line is what the IEA says about monthly production in each of their monthly reports (which typically come about 10 days after the end of the month). However, the following month, they report a change from the prior month which generally implies a significant recalculation of the prior month (occasionally they explicitly acknowledge it, but not usually). Anyway, that recalculated line is the plum colored one, and is presumably their more reliable estimate.
The EIA says "Oil Supply includes crude oil, natural gas plant liquids, other liquids, and refinery processing gain." They also mention that the US number includes ethanol added to gasoline. I couldn't find a description of exactly what the IEA includes.
As Freddy notes, the November estimate is the IEA's highest ever raw estimate. Lately, they have tended to revise downwards, so perhaps this one will go down too. However, I caution that over the whole period shown, the average IEA revision is -54kbd, which is 1.35 standard deviations below zero (not statistically significant), so one has to argue that they tended to revise up in 2002, and revise down in 2004-2005. The IEA number is on average 125kbpd below the EIA, but with a standard deviation of 500kbd, and a standard error of 74kbpd. Thus the average difference between the two agencies is only 1.7 standard errors from zero and is not statistically significant either (over this time period).
Overall, it still looks to me like there was a structural break last summer. Whether we are very close to peak, or we will crawl up some more is hard to tell, but the sharp increases of 2002-2004 definitely seemed to stop in the middle of last year. Given my best current understanding of decline rates in current production, and the fact that OPEC is threatening to cut output, it's hard for me to see massive increases in the near term. At least now I've done the hard work of extracting the IEA data and can easily include future months in this graph. We await the December report with eager interest...
"enhanced" graph.
Anybody knows where to find info to update that graph?
Barbara
(no english mothertongue)
For me is clear that Peak Oil is ON US NOW. We are lucky to see it at this site, I imagine how many years we will wait before the media start to say it. I am sure we will see a lot of Saud's government official lies going to the first pages saing that there is no peak Oil and that Santa Claus will give us all oil we need if we stay good to the Saud...
Happy Peakxmas!
We do seem to be at a point where "Past performance is not a guarantee of future performance" in oil production. Lots of predictions on production seem to be based on trend lines from 2-3 years ago that visually don't appear to be met late in 2005. This means reaching those far off production goals requires even greater % increases over current supply. Not likely in my opinion.
Lastly, lumping ethanol into petroleum liquids seems to be a desperate attempt to pad the numbers. Does this mean that if we stay at a plateau of production, but replace 25% of the petroleum liquids with ethanol and biodiesel over the next decade that we have no petroleum production issues? That peak oil doesn't exist? This just seems like a desperate attempt to minimize the reality of field depletion as the driver for production declines or lack of increase.
In addition to corn I have been looking at some numbers on soybeans and potatoes.
The US harvests about 2.5 billion bushels of soybeans annually, and about 23 million tons of potatoes. Potatoes yield about 25-30 gallons of ethanol/ton or 688 million gallons of ethanol about .5% of our gas consumption.
There has been much talk about bio-diesel from soybeans. The only numbers I can find are that soybeans yield about 9.5 to 10 pounds of oil/bushel. How much bio-diesel will 10 pounds of soybean oil yield?? 1.5 Gallons max, that would make 3.75 billion gallons of bio-diesel. Our annual distillate consumption is 4.5*365*42=69 billion gallons. Soybean bio-diesel would only supply 5.4% of our distillate needs. 3.75/69=.0543.
I hope this can put in perspective our alternate liquid fuels problem. There is no way the USA can ever supply even 10% our liquid fuel with ethanol & biodiesel.
Other than massive nuclear and wind and solar, I don't see what the energy source is going to be once oil goes into serious decline, and that does not address the transportation fuel issue unless we replace our transportation infrastructure. And we have not started yet. Using less energy is the only solution. If we have 20 years, maybe we can do it, but if the top of that curve keeps tipping over....
But don't worry, because I heard on the radio this morning that the Saudis have been pumping like mad, and have produced so much oil that they expect to throttle back early next year, and the gas prices will go down further (back up to $2.29 this morning), and the economy will take off. But there's no need to worry about inflation in spite of all the jobs that will be created. The FCC really needs to work on blocking those broadcasts from other dimensions....
I'm with you on biofuels. Love the concept. Just can't get the numbers to add. It's a last resort idea and requires huge reduction in total fuel consumption.
I understand that Minnesota has enacted a 2% bio-diesel law that requires nearly all diesel fuel to be blended with 2% bio-diesel. Now I don't know how much nearly is, but here is a web-site to explain it further.
http://www.mda.state.mn.us/biodiesel/b2/default.htm
Here is a web-site of oil yield for oil-bearing crops.
http://journeytoforever.org/biodiesel_yield.html#ascend
So we're moving from the theoretical to the practical, at least as a demonstration. Here's the rest.
You get about twice as much energy from wind to wheels using batteries compared to using hydrogen.
If what you say is true, then we are heading down a dead end. Why are smart people throwing time and money away on hydrogen if batteries are the answer? Is it that they just don't know? Do you have a link to a source that proves what you say? I'd like to know because then I'll pass it along to the folks downtown who are building this project.
There are dozens (the calculations are simple), but you might want to start with Future Pundit's roundup before you take my word for it.
I try to retain some sense of optimism about all of this, that either by building an abundance of new nuclear power plants we'll be able to have enough electricity AND stay warm; that Stirling engine solar farms will deliver the solar promise without the drawbacks of traditional PV; that hydrogen will replace kerosene to keep our air fleet flying; that electric cars will keep us all in motion... but when you think of the folly, the stupidity, the blindness, the corruption, the deceit and the wishful thinking that is going on everywhere, I can't help but think, We Are So Totally Screwed. Anyway, it's Christmas Eve, so Merry Christmas and Happy Holidays to you. I've got to get into my Jeep and go to the bank 15 miles from here to deposit a check so I can buy some plastic crap for the neighbors' children while looking at Christmas lights which I used to enjoy which I now know are using up coal that we're all going to need in the future and wondering all the while just how much my house is going to drop in value when fuel becomes so expensive that people abandon the countryside and flock to the cities to stay warm and earn a living under futuristic Dickensian conditions from which we'll never escape. Merry Christmas!
Even the use of sustainable cellulose residue (instead of food crops) can only achieve 14.5 billion gallons (345 million barrels) of ethanol annually. The clear message here is that liquid fuels consumption has to go down. The clearest way to achieve that is migrating to electric transportation which can be supported by solar, wind, nuclear, and clean coal electric generating processes.
We can achieve a sustainable yet advanced technological civilization with what we know today. No, it won't look like what we have today but it's still better than the alternative of collapse. The only question is whether we will do so or not?
However what if sugar cane, coconut and date palms WORLD WIDE gets shunted into fuels. This has already started in Indonesia and Brazil. We already import gasoline and ethanol and we have a big appetite for transportation fuels. I agree again with you that this still won't replace a very large percentage of petroleum. But it could mask declines for awhile in the reports.
Do you have numbers for Canola or Mustard seed?
Soy beans is the worst example to give and in my mind, are a net-energy loss or close to it.
The numbers that I have seen (from coastal areas) say both canola and mustard yield close to 100 gallons per acre. And they also are a great rotation crop for wheat to replenish the soil, so farmers must grow these (or something else) anyway.
There is no way the USA can ever supply even 10% our liquid fuel with ethanol & biodiesel.
This is a very bold statement. We haven't even begun to tap ethanol from wood yet and it is an energy gain and can be processed from existing paper mills, but a cheaper method must be worked out. The average car also get 21 MPG, if this number ever got to 42 (and it will with price) 10% would be more like 6-7% currently.
Here is a web-site of oil yield for oil-bearing crops.
http://journeytoforever.org/biodiesel_yield.html#ascend
Really though it's all speculation, countries that currently use ethanol/biodiesel to power a large % of their combustion, will start to have problems if you are right. OTOH they will suceed and keep showing economic growth if I am right.
Brazil will be the first test case, 40% of their transportation fuel comes from ethanol. Results will come foward shortly. Same with France and Germany who use close to 5% biodiesel. (and they don't use soy)
I'm sure Pomona has data and I can point to many other engineers with data as well.
Just like peak oil, no one really knows when and everyone can use data to claim they know. But claiming the US will never have ethanol/biodiesel power 10% of our transportation, is a rather bold call when other countries have surpassed or are closing in on that number.
Could you post the raw data or a URL to the raw data?
Thanks.
http://www.eia.doe.gov/emeu/ipsr/supply.html
You can read the monthly reports in PDF format from here:
http://omrpublic.iea.org/archiveresults.asp?formsection=supply&formdate=%25&Submit=Submit
whose parent site (public data from EIA) is:
http://omrpublic.iea.org/
http://omrpublic.iea.org/currentissues/sup.pdf (page 51)
...it seems a pretty wide definition to me, but valid enough provided one is aware of it. It would tend to underestimate decline in a narrower definition of oil products since it includes products that would presumably increase in supply as narrower oil supply declines.
I would interpret the graph as you. Looks like most supply increases that could be brought online rapidly and are viable at prices of $50 has been, unless ulterior motives have precluded it.
Perhaps that simplifies the supply prediction problem to:
new projects + infill additions + future recovery improvements - currently producing field declines
Seems that any existing production capacity which can (and there is the will to) be brought online, already has been. Of the above variables I think the field decline rates will be most critical and it looks like they are more likely to surprise to the bad side given what we know of Cantarell, Burgan, and might suspect of Ghawar.
Maybe the biggest fear should be that enhanced recovery techniques result in continued high levels of production in the short term followed by sharp decline rates, as in the Texas fields.
I'm skeptical of the IEA forcasts for the many reasons cited here, but it's good to be skeptical of those calling the peak as well.
It seems that the same kind of "event" happened in 2000 and 1999.
In our analysis we found that annual extraction has gone negative 9 times in the last 30 years.
In short, a leveling or drop in production in 2006, considering all the factors in play at the moment mean zilch. All the conservation and replacement efforts contemplated won't outpace the new demand from China and India and other developing regions. A new middle class is emerging and their demand is insatiable.
Peaksters can get excited all they want watching the mid 2005 plateau and read into it what they want but the rest of us know it was hurricane and refinery related and the trendline will continue into 2010 amid the gnashing of teeth.
Well, Putin and Abdullah basically control the price of oil. How much should they charge? Should they sell it cheap, such that demand will grow fast? Or should they sell it dear so that demand will grow slowly? Or very high so demand will collapse? What's in their best interest? They're not interested in maximizing global growth in oil production, they're interested in maximizing revenues to their respective regimes. I would say that it's in their interest to charge as much as the market will bear without causing a substantial collapse in demand. I suggest that would be high enough that any uses of oil with much elasticity will tend to get weeded out to make room for the growth in BRIC vehicle miles traveled. There's a lot of inefficiencies in oil use such that it's quite possible for demand to go flat for a number of years as developing countries fuel-switch to coal for power generation and the vehicle fleet gets more efficient. So if it's possible for demand to go flat, and it's in the self interest of the people who control the market for that to happen, why is it not going to happen?
Stuart, great graph work and i appreciate your insightful thoughts and questions each week. Though we may not agree on everything, your objective presentations are superb, as is your reporting on conferences. I treasure most of your posts.
As price is set on the open market by the marginal barrel, and demand for oil is relatively inelastic, at least in the short term, a small increase in supply has the potential to drive prices down precipitously. On the other side of the coin, disruptions in supply of one million barrels per day (Katrina for instance) cause significant price hikes in the other direction.
I agree with Stuart that SA and Russia are driven by self interest here. I do not think in either case it is as simple as trying to maximize cash flow for their respective countries, however.
The rulers of SA can only maintain their power through controlling the oil production and keeping the $'s flowing through the econonomy. Also they have made a "bargain with the devil", effectively trading access to oil for protection by the US military. So SA needs to balance maximizing cash flow to the Kingdom without pissing off their protectors - the US Government.
Russia on the other hand is more complex. Putin's power does not flow from the oil industry in his country. In fact, he clearly felt that some of those guys, especially Kodorovsky in particular and Yukos in general, were a threat to his power. I don't think Putin would blink an eye at shutting in 1 million barrels a day from Russia if he felt that it would improve his grip on power.
I have heard for two years now that the price of oil is being priced irrationally in the market and that there is a large "fear" premium in the price of oil. If anything, in hindsight the market has acted exactly as it should have. Demand has soared in the last couple of years without any obvious new supply sources coming on stream to cover this demand. Excess supply capacity has been sopped up - especially for light sweet crude. Without extra under-utilized supply capacity the price had to go up as demand soared. Now that demand appears to have stopped its dramatic increase, the price for oil seems to have stabilized at between $52 and $62 per barrel. Perhaps that in the coming year, with futher recovery from Katrina and Rita, some new projects coming on stream (Bonga and Thunderhorse for example) and a possible downturn in the world wide economy, it is possible to see oil drop back to $35/bbl. However, if that happens I predict it will be short lived.
You would think there would be a lag. Of course the US demand and production has been going in opposite directions.