## Hubbert Theory says Peak is Slow Squeeze.

I wanted to highlight and extend a very important point made by WesTexas the other day, which is that the Hubbert linearization method has a lot to say about future decline rates. And what it has to say is rather optimistic (at least by the admittedly low standards of the Peak Oil community). If you believe the Hubbert theory, average net decline rates in global production will be quite low for several decades.

Hubbert-style prediction of future global oil production decline rates, together with recent year-on-year change in BP production data (inc NGLs), and a linear fit to the BP data.

The reason a lot of us have been worried about high decline rates is the recent history in the North Sea, especially the UK. UK oil production has been undergoing dramatic 8%, 10%, and now even 15% year-on-year decline rates. The case is sometimes made that this is due to application of new technologies which suck oil out fast and then decline very rapidly. Since those technologies are being applied everywhere these days, maybe global production will behave like the UK, which would be extremely hard for the world economy to handle.

The important point WesTexas makes is that these high UK decline rates were predictable from the Hubbert theory. Recall that the UK has this strange dual peak structure in it's production history. But if you believe it has now settled down into a linear regime, the intercept with the y-axis of that regime is about 13% (correcting for the unit choice in this graph: 130/1000 is 13%):

Hubbert linearization of UK oil production due to Nick Rouse, with yellow line added by me.

Let's develop some intuition for the meaning of that intercept in the P/Q linearization graph. It turns out it's the K parameter, in the URR*exp(Kt)/(1+exp(Kt)) equation of the logistic. That's the thing which mainly controls the width of the peak. For example, suppose we build a logistic curve with a URR (Ultimately Recoverable Resource) of 2350gb and a K of 5% (based on this picture from a few months back),

Hubbert linearization of BP production data (inc NGLs), Deffeyes fit, my fit, and CERA and Rembrandt Koppelaar projections.

Note the world value for K at around 5% is much lower than the UK's 13%. If we build the logistic, we get cumulative production as follows (I've set the peak in 2005, reflecting my growing, though not certain, suspicion that the peak is near).

Cumulative production logistic model with URR = 2350gb, K = 5%, and peak at 2005.

If we difference the cumulative production, we get the classic Hubbert Peak in annual production:

Hubbert model of global oil production with URR = 2350gb, K = 5%, and peak at 2005 .

Note that the peak value is about right (30gb a year).

Now let's double check and make a linearization plot and just see that logistics really do give a linear P/Q versus Q plot, and that we get back the 5% and 2350gb we put into the scenario:

Hubbert-style linearization: annual/cumulative production versus cumulative production with URR = 2350gb, K = 5% .

Yep, looks fine. Ok, now what happens with the decline rate? Well, here are the year-on-year percentage changes:

Year-on-year percentage changes in Hubbert model of global oil production with URR = 2350gb, K = 5%, and peak at 2005.

You see that what happens is, in the early years, production grows at the input rate of K=5%. the growth rate takes a declining sigmoid form, and the line crosses the axis at the production peak in 2005. Then decline rates increase gradually till they reach the input K value again (5%). (There are some slight deviations from this story associated with using whole years rather than infinitessimal time intervals to make the graph).

To get a better feeling for the meaning of K, lets look at the US, with K = 5.4% (the intercept of this graph, remember:

Credit Seppo Korpela.

We'll take that, the UK number of 13%, and the world number of 5%. I made a plot of Hubbert peaks - the US centered on 1970, the UK centered on 1999, and the world centered on 2005. Note that I've rescaled them so they all have the same area under them (1000 notional units), so we can better compare the shapes.

Hubbert-peak model of US, UK, and world production. US has peak at 1970, and K=5.4%. UK has peak in 1999 and K = 13%. World has peak in 2005 and K = 5%. All three have been rescaled to have identical area of 1000 units under them.

Obviously, the good news is that the world would decline the slowest of all. In particular, if we plot the post-peak decline rate for the three regions as a function of years after peak, we get this:

Hubbert-style prediction of future decline rates as a function of years after peak, for the US with K=5.4%, the UK with K=13%, and the world with K=5%.

Clearly, the world only declines relatively slowly. To compare all this with some data, we can look at growth/decline rates in the BP annual data (which includes NGLs).

Hubbert-style prediction of future decline rates, together with recent year-on-year change in BP production data (inc NGLs), and a linear fit to the BP data. The last point in the data (2005) is provisional, and is constructed from the first eight months of the EIA monthly series for 2005 compared to the first eight months of 2004.

The dark green line is the same Hubbert model (2350gb URR, K=5%, and peak = 2005). The plum colored line is the BP data. Clearly, the data are very noisy - as the world economy goes through it's various gyrations, production goes above and below what the model would predict. However, the model trend is about right. To see this, I added the blue line which is a simple straight line regression to the data. The difference between the Hubbert theory and the straight line are likely comparable to the errors in the data.

I should say this somewhat matches my subjective sense as I continue to slowly plough through press releases of all the world's oil projects. I do have the sense that in a number of places, we are not seeing the kind of all-out aggressive exploitation of the resource that happened in the North Sea. Whether it's the tiny rig count in Saudi Arabia, or the disappearing independent oil sector in Russia, there are significant economic and political restrictions on near-term production. That's a bad thing from the perspective of the short-term price picture, but it does mean that there's some oil that will still be around to get used another day.

The good news is that we've got several decades of declines that are quite modest (no doubt interrupted by various nasty shocks and alternately periods when things go somewhat better). That makes adaptations much more feasible - be they more efficient vehicles, tar sands, coal-to-liquids, or windmills. You may recall my claim that the decline rate is the main thing that controls whether the economy can adapt or not:

Simple model of economic response to varying decline rates. If decline rate is low, adaptations and continued economic growth are possible. If decline rates are higher, sustained but orderly economic contractions occur. If decline rates were extremely high, adaptation would be infeasible, and society would collapse.

What this suggests is that for the next few decades we will mostly be in the green zone (shocks aside). The US economy can probably get 3-4% less oil intensive each year by slowly replacing the vehicle stock with more efficient vehicles. As Econbrowser has been noting, this has begun. I don't doubt growth will be affected - there is very unlikely to be enough oil for the developing countries to grow their economies as they would like. The fact that BRIC countries will continue to grow faster than the US and Europe will place more pressure on the western economy's oil usage than a global analysis might suggest. However, this theory does imply that some economic growth will be possible for quite a long time.

Whether that's a good thing for the long-term future of humanity is a different question.

Interesting analysis Stuart.

The filling of existing strategic petroleum reserves (SPRs), and the creation of new ones should also mitigate the decline by postponing some consumption.  The US Congress has authorized the US SPR to be enlarged by 300 million barrels.  I suppose that China and India will proceed with their own SPR stockpiling.  I wonder what the attitude of producers will be when the peak is past?  Will we see "custodianship" take precedence over "reliable supplies"?

Fantastic work, as always. I think Stuart sets the standard for those who dispute him to meet. They need to show better models or specific holes in his logic to have any credibility.

Regarding the SPRs, I don't think there's any chance of them being filled. If energy supply is contracting while worldwide demand is increasing, prices will shoot up, and it would be political suicide to further reduce supply to put it into a reserve for what? - for an emergency? I think 5+\$ gasoline will be considered emergency enough as is challenges our economy. There will be pressure to release the reserve (as we have been doing already), not fill it. Last week's numbers showed further decline in SPR despite the congressional authorization for an increase, and the 16-17 million barrels removed since Katrina were drawn down during a time of much less stress than what's coming.

Where are the US SPR inventories reported?  I would like to monitor them also.
The U.S. SPR inventories are reported in the Weekly Petroleum Status Report issued by the EIA.  The latest balance sheet, which automatically updates each Wednesday morning, can be found here: U.S. Petroleum Balance Sheet.  The amount stored in the SPR dropped for quite awhile, but 700,000 barrels were added in the week ending 11/25.
Thanks for replying and correcting. It was the previous week it had dropped 0.3.
Not to put too fine a point on it, but I'm glad to get some less bad news for a change.  Perhaps we have some room to lead people to adapt to the new realities.

We had our office Xmas party last weekend, and one of my coworkers came up and asked if I was serious about what I said in my report on Bartlett's conference.  She looked so unhappy that I felt like the Grinch.

Stuart do you do this fulltime?? Fascinating use of math/science to help us get a grasp on what data we have. Thanks.   On the positive note this decline could ameliorate the increased global starvation an 8% would imply;however I am skeptical about our economy knowing peak, an at least in the U. S.,and not collapsing. I also agree that holding reserves will be likely.   Thanks again for the expertise this site brings to this elusive crucial issue.
The good thing about a collaspe in the US economy is that the OIL might last longer at the levels of current production.

Though it is hard to see that as a good thing if you are standing in line at a soup kitchen.

I should stress there's two different rates going on in these various discussions. The 8%-10% rates we discussed here are the decline of fields in production. That is to say, how much will the fields on stream currently (recent and ancient), taken as a whole, decline by next year. That is useful if we have a tabulation of projects coming on stream which we can then add to that declined current production.

The decline rates in this article are the overall (net) decline rates (after adding in new production). The two numbers can potentially be pretty different (eg with US natural gas where new wells are declining at 31% annually, but annual production is only declining a percent or two). The overall decline rate is the important one for assessing the impact on society. The FIP decline rate sets how hard the industry is going to have to work to maintain production (roughly speaking).

In other words it represents the best case scenario if there's no political upheaval or pervasive economic shocks so that the industry can go about its business without interruption. Unfortunately, I'd say that would be incredibly unlikely. The global economy has been grossly destabilized in recent year by the giant conveyor belt carrying wealth to the US, which is likely to break down in the not too distant future and wreak financial havoc. In addition, even a perception of shortage in a commodity as strategically vital as oil could (I think would) provoke resource wars and gunboat diplomacy. The impact of that sort of human behaviour on energy supplies would be nothing short of disasterous, but, in the absence of the global trust required for a Powerdown scenario, it seems to be what humans typically do in response to resource shortages. Sadly, I fully expect the human aspects of peak oil to magnify the effects of peak oil very significantly. There's no room for complacency.
When Katrina and Rita caused shortages, the response was cooperation, not conflict. In fact, there are many examples of oil cooperation: Russia helps out Belarus. Venezuela and Mexico help out Cuba and other Carribean nations under the San Jose Pact.
Your faith in human nature is touching JD. I don't share your optimism. We are talking about a much more profound and widespread crisis than a single hurricane in a localized area surrounded by a functioning economy.

There were elements of both cooperation and conflict in the response to hurricane Katrina. See here for instance: http://www.fromthewilderness.com/free/ww3/092105_world_stories.shtml#0.

I would say we are in a state of mixed messages at the moment. People are worried, but so far the economy has held up despite the increasing stresses upon it. Once the positive feedback spiral visibly changes direction (as opposed to hovering near the cusp as it appears to be now), the human response is likely to change dramatically for the worse. The psychology of a bear market is corrosive. It undermines the ability for populations to respond rationally, thereby compounding the effects of the initial problem substantially.

Do you really think the US would refrain from making further pre-emptive resource grabs, trusting the Chinese and the Russians and everyone else to refrain from doing so as well? I'm sorry, but I see a tragedy of the commons situation here. I think the US will be busy blaming China, and anyone else it can think of, for the collapse of the American economy as the credit bubble implodes. Trust will be in very short supply and without that, cooperation is impossible.

I should point out that trust is still possible locally under such circumstances, it's just that the trust horizon contracts. In the 'us' versus 'them' equation, 'us' becomes ever more tightly defined and 'them' becomes an ever more pejorative term. In times of plenty (or upswings of optimism), 'us' may be almost global, in a 1960s brotherhood of humanity sense. In resource constrained (or pessimistic) times, 'us' may shrink to the point where it includes only those in the same area with the same values and in the same boat. At that level, the value of cooperation and the price of conflict would still be clear.
Stuart- Nice analysis.

It makes sense that the world decline would be slower than the US or UK--more diverse supply, and a lot of newer production coming on-line.

If this is anywhere close to correct, it will require a radical rethinking within the peak oil community. We'd average a mere 0.5% annual decline rate for the 1st post-peak decade, 1.5% for the second, and 2.5% for the third. There will be demand pressures, and local shortages and surpluses, of course. But we should be able to accomodate those sort of declines with simple, non-radical conservation efforts.

But oil-related greenhouse gases would remain high for decades, and the global economy keeps ticking along. Motoring may be easier, but the climate won't be so pleasant.

The greenhouse gases are going to be there for up to 30 years if we stopped burning everything today.

So we should not worry so much about that aspect of this.

Not sure I understand your logic here Dan Ur?  Because greenhouse gases are so persistent, it is the very reason why we should be worrying about climate change embedded within the context of oil/gas depletion.

In other words, once we see significant enough changes to the climate to cause the political will to shift toward greenhouse gas reductions, will will still only have scratched the surface of what those effects might become in the decades to follow.

I was not trying to imply that we do nothing to reduce our use of OIL, but that in affect it won't matter a hill of beans what we now do.  The damage is already done and the systems are already changing.  We can HOPE for the best, but we should expect the WORST.

Is not depression and gloom just a great way to spend a day.  (sarcasitic remark).

Yes, and it gives us time to phase in a great deal of coal-to-liquids.
I agree with everyone else...as usual Stuart has set the bar with his fantastic posts to TOD.  I'm glad to see some relatively optimistic news (by peak oil pessimist standards).

However, I'd like to bring attention to the Exxon Mobil projection that the world will need approximately 120-130 mbd of oil by 2030 to meet global demand assuming economic growth and energy growth rates continue at their average from the last 30 years.

What that means is that based on Stuart's modest net decline rates, if we are peaking in 2005 then we should have around 55-60 mbd available by 2030.  The difference between what we think we need (120-130 mbd) and what we may have available (55-60 mbd) is still a profoundly huge number.

I just don't see how it is possible to "grow" the human population, "grow" our (energetic) standard of living, nor "grow" our agricultural output during any degree of net decline, be it 5% or 15%.  All that said, I definitely like the direction Stuart is taking with his analysis and I'd recommend that the TOD community take a look at the book by H.T. Odum entitled, "A Prosperous Way Down: Principles and Policies."

Stuart, I'm not as talented with the statistics as you...but do you have any thoughts about this post?

"Exxon Mobil projection that the world will need approximately 120-130 mbd of oil by 2030 to meet global demand assuming economic growth and energy growth rates continue at their average from the last 30 years."

AVERAGE world growth from 1975 to now projected out 25 years?

Automobile registrations in the United States went from 8,000 in 1900 to 902,000 in 1912.  The US population was 76 million at the time.

My guess is that Lee isn't letting the boys at Exxon project that kind of auto growth for China or India.

2 million cars were sold in China in 2003, an 80% increase over the prior year.  At the early US rate they'll have 225 million in twelve years.

Maybe I am a putz and I don't know what I am talking about, but I am not sure if it is valid to try and do Hubbert linearization for the entire world.  For many years, total world production wasn't contstrained by the physical ability to get oil out of the ground - it was artificially constrained by the Saudis throttling production in order to provide a stable price, and also by the fact that the if all of the oil wells produced at full tilt, the world couldn't have used it all.  In 2005, neither of these conditions is true any more, so you might argue calculations now might be valid.  Unfortunately we probably haven't been in this state for long enough for us to be able to project into the future.
Hubbert linearization works for US production, which was constrained for decades by the Texas Railroad Commission.
According to "Twilight In The Desert", the 1973 OPEC oil shock was really about the Saudis realising that producing at their high rate was damaging their fields. Reducing production to a prudent, American, rate of production of oil was not a political decision at all, though the Saudis poised as Arab heros.
This thesis is that the oil crisis was a technology crisis that was only avoided by better seismic (bright spot) and offshore oil drilling and production techniques.
This may be true, or may not be true. I am not knowledgeable enough to decide, nor do I or anybody else on this board have access to the real well data for Saudi Arabia.
I'm going to have to think about all this some more but I do have a few preliminary comments.
• I expect deepwater production from West Africa, Brazil and some other places to replicate the North Sea decline rates some few years from now (after 2011?)
• Given the "above ground" geopolitical or investment issues for the Middle East, Russian and the Caspian Sea that can inhibit increased production flows, this kind of purely "Hubbert mathematics" analysis is interesting but--to be fair, as you note--are you really modelling the real world here? You're also discounting oil shocks and the usual delays.
• Concerning that last point, what about the ever-growing number of small producers like the Sudan (which exports to China) or Mauritania and their contributions to the world's oil supply? Is production from these smaller producer countries both geopolitically reliable and economical based on price going forward? More numerous smaller producers (without Megaprojects) are becoming more and more important to the world supply & demand equation. I wish I knew how to model this important future trend.
• In that last graph with a peak at 2009, you refer to "adaptation". I am still trying to figure out what the hell that means. I just don't see much elasticity in the system either here in the US or in China.
• Increasing internal demand (consumption) in some exporting countries makes oil less available for export on the world market. How does this affect supply for the "addicts" as opposed to the abilities of the "dealers" to increase their daily production numbers?
Since the problem as I see it seems to be about "peak flows" and not just potential recoveries over time as shown in Hubbert linearizations, it just seems to me that this kind of top-down analysis is flawed because it is incomplete vis-a-vis RealPolitik. Overall depletion (new production + declines in existing production) is hard to predict and the Hubbert abstract models may be correct if nothing bad happens. But without considering geopolitical factors, we are enlightened only about the ideal case. Of course, I myself am pessimistic because I think Homo sapiens are fuck-ups--and maybe I'm just in a bad mood right now.

Anyway, nice post, I'll need to think about all this again and these are just a few of my thoughts on initially viewing your remarks...

best, Dave
I'm not discounting oil shocks. They are clearly visible in the graph at the start of the piece - the data over the last forty years makes big jumps about the trend line as the economy goes through booms and busts and oil shocks, but the trend line of the data is tangent to the model only very slightly removed from the center of the data period. Remarkably good agreement really.

I would agree with you that there will be shocks in the future, and some of them may be of equal or greater magnitude to the past (although the Iran stuff was pretty bad). The growth/decline rates I'm sure will continue to be noisy, and perhaps the amplitude of the noise will increase as the system comes under increasing stress.

Obviously, there's no way to know if the model will work in the future as it has in the past, just as there's no way to be sure the sun will rise on future mornings. We just observe a certain approximate regularity in the universe, extrapolate into the future that it will be true to the same degree as in the past, and then wait and/or gather more evidence to find out.

It seems, given Matthew Simmons' revelations in his book Twilight in the Desert, that the likelyhood the superfields of Saudi Arabia will behave with an orderly two percent decline rate is wishful thinking at best. The Yibal field in Yemen is a close approximation of the Ghawar and used the same technology the Kingdom has been using to keep up supply, and Yibal suffered a rather sharp decline. I feel that these large fields which use advanced water sweep and bottlebrush drilling techniques are due for a spectacular collapse.

While it would be nice to believe that we might have a nice gentle slope on which we can make some sort of transition, I think we would be better served assuming the worst -- just in case that horrible scenario turns out to be accurate.

The best way to prepare an economy for a disconnect is to welcome the change and use the adjustment in infrastructure to help fuel the economy as we transistion. An economy is an economy is an economy no matter if it is oil based or solar based, growth based or steady state. The important thing is we must plan and not let the vagaries of the so-called invisible hand of the market make decisions for us. The invisible hand of the market is merely the eccentric wobblings of a chaotic system. If we are to descend into energy rationalitiy, we need to recognize that chaos is the opposite of civilization. Just letting the chaos engine swing into the frentic, destructive portion of its cycle because the political economists of this era want it to fit their models is not only irrational, it is kinda dumb.

ceteris paribus (all things being equal) the world will probably be rather nice about decline. My doubts arise when you consider the current administration's posture of belligerent (corporate) nationalism (or fascism). Will America accept that things will decline? If we were to endorse the Rimini Protocol, maybe things could follow an orderly course?

Stuart made an excellent point at the very end of the article; one that is equal to all the analysis done previously.

...this theory does imply that some economic growth will be possible for quite a long time.

Whether that's a good thing for the long-term future of humanity is a different question.

Maybe the utterly counter-intuitive supply disruptions created by political situations will be what helps prevent people from burning too much of the oil (and then switch to coal). Maybe the only thing worse than switching to CTL on a massive scale is switching to direct coal and wood home heating.

It looks like we've all got a lot of work ahead of ourselves if we are to prevent catastrophic climate change, a return to feudal oppression and massive dieoffs (that a low decline rate would lull people into a false sense of security before really taking a dive for the worst amidst geo-political strife).

I'm not a statistician, but I think I followed your logic. What I didn't understand was how you got to K=5% for the world. Is this an accepted number.

Whether or not this provides us some reprieve from the impact of peak oil is still up for debate. Supply is not the only issue here. If demand continues to rise in places like the U.S and China, in a world of shrinking supply, that oil is going to come from somewhere. The where is from the poorest nations and people. The rich counrtries will still get there oil, but what happens to those countries that can no longer afford it? They don't show up on a bell curve.

David

It comes from the third graph - the linearization of actual data for world production. The BP data is the dark blue line, and the yellow line is a fit to the linear region. The linearization intercept is 5%. Deffeyes fit is to different data (probably the Oil and Gas Journal series but I haven't checked to verify that), but his estimate of K is very similar.

You analysis makes sense but at 1% decline rate around 2010 we  will lose about 800,000 bpd worldwide. That seems manageable, however, demand will still grow just because of demographic pressure if we want to maintain a constant 4.5 barrels/capita/year that has been observed for the last twenty years.

UN prediction for the world population (middle case):

From the graphic above you can easily estimate what would be the oil production required to maintain 4.5 barrels/capita/year.

I have good intentions of taking up these issues in a future post.
you had better take this issue up because it it the most important point made in this entire comment section so far.

energy use per capita is the key.

Good point--the per capita consumption rate is very important. However, the aggregate world figures disguise the huge disparities in energy use. A quick rough calculation for North America (BP 2004 consumption / CIA 2005 population) comes up with 27.4 barrels per capita, compared to 1.08 barrels per capita for Africa.

The demand outcome will depend on the dynamics of the players. I'd bet on the heavy consumers continuing their demand, China and India continue to increase conosumption fast, and for the per capital consumption to decline in Africa, and maybe Central and South America as well.

Good observation, there is a large disparity in barrels per capita through the world. The europeans are around 10 b/c/y and the US above 21 b/c/y. What is the minimum number for an industrialised society in order to maintain its current lifestyle? that's the big question! I believe that the infrastructure maintenance (road, etc. ) requires a minimum level which must be around 1-2 b/c/y (~1925 level).
One way to start on this question is to look at per-capita energy use (total energy, not just oil) vs per-capita GDP for a sampling of countries. This gives us some notion of the overall state of production technology worldwide. Here's a graph that I put together using data from The Economist's World in Figures from 2004. The size of the circles represent the population of the country and is not considered in fitting the line.

Standard interpretation of this, with (natural) log data on both axes, is that a 1.3% increase in per-capita GDP requires a 1% increase in per-capita energy. That's overly simple, since causality probably runs in both directions; economies that use more energy produce more, but rich economies can also afford to consume more energy in non-productive ways. There's a considerable range at the high end, not entirely obvious due to the use of log data. Compared to the US, Canada consumes about 10% more energy per US\$ of GDP, Japan consumes about 40% less energy per US\$ of GDP. Japan has some geographic advantages compared to the US -- it's smaller and more crowded -- so it's unlikely that we would be able to achieve the same degree of efficiency.

Here is the projected number of barrels per capita per year based on Stuart's logistic model:

I used the UN high case scenario (10.64 bilions of people in 2050). According to Stuart's model, we will reach 3.74 b/c/y in 2015 which corresponds to levels observed prior to 1970. I don't know what are the implications for the world economy.

nobody can say this is bad news ( i think) compared to stuart's previous post on 8% decline rates. after that, if we collectively weren't running for the hills, we were at least thinking about it. ...ok...i admit it ...i was.

as others have alluded to above, the real world thought that i wonder about is the accessability of oil...oil IS power, and countries will( or are) start thinking, "why am i giving this stuff away?" or "what will my population use after i sell it all to the americans?"

Sorry Stuart.  Interesting as these calculations are, I'm afraid I just don't buy it.

How can decline rates be 5% or less when we're going to have Burgan, Daqing, Cantarell and probably Ghawar declining with double digits in the next few years. It does not compute!

I more inclined to believe your earlier post that had decline rates about 8% for the world.  That would be somewhere between the US and the North Sea.

I tried creating some theoretical production graphs that were different shapes to see how they looked when they were 'linearised', and the graphs with steep accelerating declines caused the linear model to curve down to an ultimate Q that was much less than the earlier linear part of the graph predicted.

You can sort of see that in the UK linearisation graph above.  The last bit looks more like a curve than a straight line and that curve may yet bend right down to an ultimate Q of 24 or 25 Gb, instead of the projected 28 Gb.

That's why I'd like to see some real linearisation graphs of fields that have been almost completely depleted using high production techniques and technologies. Matt Simmons had a whole lot of production graphs from individual fields in the North Sea.  It would interesting to see the linearisation graphs for some of those fields.

Hi Stuart,

Your analysis is very interesting (as always) however apart from BP, which is most inimical to the whole concept of depletion, what do the other oil majors have to say about future production declines?  I understand that Exxon Mobil forecasts a 4-6% world decline rate and that "by 2015, we will need to find, develop and produce a volume of new oil and gas that is equal to eight out of every ten barrels being produced today."

And isn't it the case that the overwhelming majority of oil production worldwide is now being brought about under water injection leading to faster declines of those fields once recovery falters?
This is the fields-in-production decline rate, not the overall decline rate. Exxon has said that. However, our analysis of their production numbers indicates that their own internal decline rate is actually much higher over the last five years.
Hi Stuart,

Thanks for your reply but I'm still not sure I agree with your conclusion that we will be on some protracted petroleum plateau for what seems like decades because we'll only face 0.5%-1% yearly decline rates while we lesiurely switch from one energy fix to another with barely a hiccup.  Given that we have been very effective at applying the latest technology to both ageing onshore fields and newer deepwater ones resulting in faster extraction rates and steeper rates of decline.  Like the doomer fast crash scenarios we've all read about these virtuous decline rates simply sound too good to be true!

Robert L. Hirsch recently reported back in the October 2005 vol 226 no 10 issue of worldoil.com that "the data shows that the onset of peaking can occur quite suddenly, peaks can be very sharp, and post-peak production declines can be comparatively steep (3 - 13%). Thus, if historical patterns are appropriate indicators, the task of planning for and managing world conventional oil peaking will indeed be very challenging".

I think a potentially high overall rate of decline in world oil production is far more likely, due not only to the aforementioned use of technology, but our collective greed, poor remaining oil grades, and shortages of skilled oil-workers and equipment. Additionally, the rate of decline will almost certainly be exacerbated by future hurricanes, revolutions, wars, missed deadlines on new projects, and increased demand from China, India etc.

I think this is a wonderful analisis  [on paper].As other posters have noted,however,mankind has a excellent history of snatching defeat from the jaws of victory...Any stupid moves ,[as has been the hallmark of this administration] towards a millitary solution to Irans nucular dreams and all bets are off.

Heading for the hills,in a orderly,careful fashion is still a  rational,intelligent,responce to the information avalible.

* ON WEDNESDAY, DECEMBER 7th 2005 --
MIKE RUPPERT WILL DEBATE JEROME CORSI, Ph.D. ON THE TOPIC OF "PEAK OIL" vs "ABIOTIC OIL" *

The TWO HOUR debate will be moderated by Michael Corbin, host of the KHNC Denver radio show "A CLOSER LOOK." Denver area listeners tune to AM 1360 at 11a.m. mountain time. -- West Coast listeners click www.4acloserlook.com at 10 a.m. Pacific time.
excellent!

this information should make it to the front page!

What did we do to deserve this? Perhaps they will mortally wound each other, and we can get down to figuring out our problems in a rational and orderly way.
Indeed. Or else we can just identify the gap between what the two debators claim and assume it must be close to the truth.
The conspiracy king:

vs the sliming slug:

The 'debate' would be about as informative as O'Reilly debating Limbaugh.

It is worth pointing out, though, that some people on this site have had little hesitation in advancing highly speculative conspiracy theories concerning Corsi's true intentions.  At the center of this alleged conspiracy is the attempt to link abiotic oil theory with intelligent design theory in the minds of Christians.

I wonder whether some of the people who have advanced this kind of thinking, or who entertain it privately, are also inclined to dismiss Ruppert's conspiracy theorizing out of hand as pure bunk.  If so, the inconsistency in their thinking should be glaringly obvious - all the more so since Ruppert's conspiracy theorizing is much more grounded in an abundance of documented facts than the conspiracy theorizing surrounding Corsi.

[Note, however, that I say this as someone who recognizes that Ruppert can definitely be over the top at times.]

I think that a lot of our talks do seem to revolve around the hope that a lot of folks will start changing the small things and that it will all turn out okay.

The key word not used above is  " IF "!!

The green zone is of us tooling along changing everything we can change and doing our best to make sure as few people die as possible and that the rest of us live decent lives.  Decent might not mean a McMansion, but a small place just big enough for us, but not small or tight. As well as bringing the guy who lives in a tent into a home with some better protection from the elements.  A general balancing out of things.

The above is a Utopian dream, and as we all know that means "no place" so we might more likely see a mix of all the colors.

I hope that we can be better in the handling of this than we were with say "Katrina" , but I do not have the faith in the general public that some of you might.

We will have winners, and we will have workers and we will likely have a lot of losers as well.

Very good work by the way, THANKS!

It should not be that complicated to understand why slow rates provide the limiting factor in oil depletion.

The analogy is to capacitance in electrical circuits or dampers in mechanical systems.  Put two capacitors in parallel and you sum the individual capacitors. Discharge rates are inversely proporational to capacitance. Therefore the high discharge rates have low capacity and thus contribute little to the overall capacitance of the system.

And I still do not understand the ridiculous fawning over the logistic model and Hubbert linearization.  It's misguided, people! The mathematics behind it makes absolutely no sense.

No wonder we go through all these gyrations to make sense of things that become perfectly obvious if you use the correct model in the first place.

I've explained to you about 10 times what you need to do to establish that you have a better model. You never do it - you just complain that people still choose to use the best predictive model we have right now If you had the first bit of sense, you'd realize that Hubbert was a first-rate scientist, and name-calling him takes away from your credibility rather than his.
What is wrong? I have a theory. Theorists don't always have to   defend their position. That's what experimentalists are around for.  It's a classic position in the scientific world.  Theorists don't mind getting attacked for their ideas. And that's not to say I am any first rate theorist, just that I know how the game is played.

No use getting worked up over this.

Hubbert never used any mathematical model; as far as I can tell he did his computations graphically.  And why would I name call Hubbert anything?  I think I dissed "Hubbert Linearization" because it is based on that ridiculous Logistic curve. It doesn't have any basis in reality.

Hubbert used the logistic curve (See Beyond Oil by Deffeyes, Ch 3 for a little of the history). The equation was developed by Verhulst in the nineteenth century, but Hubbert first applied it to this problem. So when you refer to "that ridiculous Logistic curve", you are expressing an opinion on Hubbert's contribution (one of many). While no-one would claim it's a perfect model, it was a significant creative contribution, and his work was seminal.

Testing your theory doesn't require doing any experiments. It requires taking data that is freely available on the net and seeing if your theory is any good at predicting portions of the data that weren't used for estimating the parameters. If you want to claim your model is better than Hubbert's, the proof is that you can predict out of sample data with lower residuals. Until you do that, there is no reason for anyone else to take you seriously. If your model is better at prediction, we'll all be eternally grateful. But no-one else is going to go make the effort to test your model properly if you, it's author, can't be bothered.

stuart....honestly, why do you bother with these people?

they have nothing to bring to the table and yet you keep trying to show them the lighted path.

you're a bigger man than I.

WebHubbleTelescope,

Could you please elaborate on the analogous physical properties between the discharge of an electrical capacitor and the discharge (depletion) of a petroleum resevoir?  I think that we could better point out any flaws in your thinking if we could understand more about your model.

Two posts showing how my model maps, at least mathematically, precisely to a set of staged RC circuits.
http://mobjectivist.blogspot.com/2005/09/rc-circuit-analogy.html
http://mobjectivist.blogspot.com/2005/10/electrical-shock.html
Ahh.. the Oil Shock model.  Having previously read these excellent posts I understand your description of this model and its incorporation of various stages of the petroleum resevoir life-cycle, together with external "shocks".  Now I'll try to understand the physical analogy of resevoir oil with electrons in a capacitor that discharge through a resister.  If the same mathematical equations apply, the analogous properties should then fall out.

Stuart,

Good work as usual.  Some comments and suggestions.

First, I would use the Lower 48 production as a model, not the entire U.S., for two reasons:  (1)  the Lower 48 peaked before Prudhoe Bay started producing and (2)  Alaska is very far removed geographically from the Lower 48.   If you just use the Lower 48 production, it peaked at 48% of Qt (total estimated cumulative production).  The swing producer within the Lower 48, Texas, peaked at 54% of Qt.

In my opinion, Saudi Arabia, now at 55% of Qt, is to the world, now at 50% of Qt, as Texas is to the Lower 48.

In regard to the UK, I think that it makes more sense to use total North Sea production as a model.  As we both noted, the Y (P/Q) intercept for the North Sea is much greater than the Lower 48 and Texas, but it is very interesting to compare Texas and the North Sea.

The Qt for the two regions are very close, 66 Gb for Texas, 60 Gb for the North Sea.  Texas peaked at 54% of Qt; the North Sea at 52%.  The huge difference was peak production.  Texas peaked at 3.5 mbpd, while the North Sea peaked just shy of 6 mbpd.   Given very similar ultimate recoverable reserves, this implies a much greater decline rate for the North Sea--which is implied by the P/Q intercept, which is precisely what we have seen.

So, regardless of the P/Q intercept countries and regions are peaking  (in the absence of political problems, e.g.,.Iran) at around 50% of Qt.  The P/Q intercept does give one a good idea of the future decline rate.

If memory serves, the P/Q intercepts for the Lower 48 and Texas are almost identical.  The net decline for Texas 10 years after we peaked, after an intensive drilling program, was about 28% (from 3.5 mbpd to 2.5 mbpd).   Using the crude + condensate number, and ignoring the non-conventional stuff, and if we peak this year, this suggests that conventional oil production around 2015 would be about 50 mbpd, down from 73 mbpd currently. Of course, what we would like to consume is growing at annual rate of around 2% per annum.

Oh Great!

Now the Chinese can finish all those freeways they're busy building and add the 600 million vehicles envisioned ... as they follow our exact path into the abyss.

interesting analysis, though i'm not sure how much can be gleaned from looking at global decline rates.  after all the world is very inhomogeneous, and the have not's will suffer first and foremost compared to the have's.  this is already happening in places like Zimbabwe and Indonesia.

An analysis by Hirsch (found on EB, Nov. 19) stated that on a national basis, decline rates are typically greater than 2% directly following peak (2% is the benchmark of the US decline rate, lower 48 states).  He suggested that individual nations experience not broad and widely plateaued  Hubbert curves, but actually follow a sharp, triangular curve type.  this is based on data from North America, Norway, UK, Argentina, Colombia, and Egypt.  the world peak may (and most likely will) be broader, but in the end, it may not matter much.  in this case, the devil really is in the details.

Nice point Stuart, still we have to realize that real world data sometimes has bumps, after the mathematical peak we're subject to a major fall year-on-year, just like in the US-48 history (take for instance 1973-1974). Another thing to take note, is the higher value of K for offshore exploration. Since this is now the major area of expansion, we might get some unpleasant in the coming years.
I'd like to suggest you to update your linearization model, which as far as I remember was calibrated by measuring Deffeyes` graph with a ruler. You can use ASPO's numbers to do that, they match the BP data perfectly. The result is a world URR of 2165 Gb; details are at WolfAtTheDoor (click "Hubbert's Peak" and then "Mathematics").
Wow. Stuart, your analysis of the general trend in the future production is the most convincing I've seen to date. I might not agree with the contraction threshold, though. Even in the medium term (one or two decades) the production decline might be too much for the economy to take without severe recession. I am not that hopeful about the efficiency increases in transportation in that timescale.
Stuart,
I have a comment about your claim that "the decline rate is the main thing that controls whether the economy can adapt or not."

This is a question for economic science rather than natural science. I wonder if there are any economists out there who could comment?

We have a global economy that is based on perpetual growth. Banks create money in the form of loans and to be able to pay back these loans (with interest), the borrower's business must grow. This debt-based economy counts on tomorrows expansion to repay todays loans. But Peak Oil means that tomorrow does not bring expansion. My fear is that the perpetual growth economy will not be able to cope with a gradual decline or even a plateau in energy supplies. Without growth, an economy that is based on growth is likely to simply collapse.

As panarchist points out above, the global economy is predicted to need vastly more oil than available.

Your figures for slow decline reinforce my belief that the most pressing problem is not actually a problem of significant shortfalls in energy supplies. Conservation, relatively minor sacrifices, and alternative energy sources could probably make up for the shortfalls in the first post peak years.

However, if our growth economy collapses, efforts to cope with the root problem of energy depletion will become drastically more challenging and the human suffering will be much greater.

In this light, the most pressing problem seems to be an economic one.

I have often thought along the same lines...

In fact I consider that our curent economic markets are ALWAYS in a bubble state, usually more air than substance. This is only possible because growth appears to be a matter of time and thus the air gap will eventualy be filled, but it never is because as the substance grows so does the air gap. The change from the belief that the gap will always be filled to the realisation that it will not must cause the bubble to implode...

Long fat tail

Just for fun,  an example of a province which doesn´t fit the logistic  curve.
Surely Austria is a tiny oil province, although we were self sufficient until 1958. Our peak was in 1955, in 1945 Nazi germany -of which Austria was part of-  collapsed, but otherwise no political or economical impediments to production.
As an aside, Austria uses less than half the amount of oil to produce 1000 US \$ worth of gross national product than the US, and yet we are one of the ten richest nations on earth. (Oil consumption per capita per year is approximately 8,5 Barrels).

http://www.geologie.ac.at/pdf/oelref2005.pdf Page 13 to 15

When we compare Austria's total energy consumption to US\$ of GDP (see message above for a variety of other countries), rather than just oil, Austria is somewhat better than other European countries, but not nearly as good as Japan. This is a situation that could be anticipated at least somewhat, as Austria has to import 66% of its energy compared to the US importing only 27% and Japan importing 80% (all numbers from The Economist's World in Figures, 2004 edition). Austria has substantially more hydro power per capita than the US, and IIRC, takes advantage of that by having an extensive system of electric trains. Such a network would be much less practical for long-haul transport in the geographically much larger US.
Looks good.  The only problem I see is that getting an overall decline rate that small means that the oil producing countries are all going to have to go like gangbusters on new production and sell all of it.  If we plateau there is a chance that some of them may decide that the oil is of more value in the ground or developing their own economies.
I agree. It would appear that oil producing countries will have more and more geopolitical leverage in the world (especially now that we've created a data point in Iraq suggesting that invading them doesn't increase oil production but does politically damage the invading politicians).
Great analysis, however there may be a second order effect or even a first order effect that is not present in the US data or the North Sea data.
That is the Homogeneity of the consumption throughout the population.  The percentage of population addicted to fossil fuel use is increasing at an exponential rate though out the world.  Due to government programs in N.A. and Europe, they provide some assistance to the aged and the low income. This in turn provides them with the ability to consume fossil fuels both directly and indirectly.  Conversely, in the not too distant past, 30 years maybe, a majority of the world population had no access to fossils fuels either directly or indirectly. It seems this should have a considerable effect both on exploration and demand. Demand is perhaps the Kicker that will drive the price and the world economy, and also perhaps the slope of the curves. Fossil fuel is like crack, one hit of it and you are addicted. This post is more a question than a criticism. Thanks again for your efforts to inform.
This is an interesting calculation, but it is biased in a way which is common to a lot of peak oil analysis (my own included). We tend to look at peak oil in a US-centric, or world-centric way -- i.e. if the decline rate for the world is slow, we're out of the woods OR the U.S. has plenty of coal, so we're okay.

That's not quite right though. Even if we have a decades long slow plateau/decline at the global level, individual countries can still undergo punishing decline rates of 10% or more. For example, here's some Type III decline rates calculated for 2004:

Australia: -12%
Papua New Guinea: -10%
UK: -10%
Peru: -8%
Yemen: -7%
Congo Brazzaville: -7%
Indonesia: 4%

The UK is a classic case. Regardless of whether the global decline is slow, the rapid decline of UK oil and gas is a big problem for the UK. Similarly, declines in Mexico and Indonesia could have severe fiscal consequences for those countries themselves.

The global figures aren't fine-grained enough to capture the nuances of the problem. I think all the worry about the US, Canada, UK and Australia is overblown. Those countries have tremendous resources -- economic, human and physical (i.e. coal and nuclear) -- and they will stick together. The hard part will be helping weaker countries through the transition, so they don't degenerate into poverty/mayhem and destabilize the global system. For example, the U.S. needs to take a much closer look at Mexico.

I wholeheartedly agree (for once :-)
That's the core of the problem right there, JD. From the perspective of engineers and scientists, anything other than a total cliff in production always looked manageable technically but it's the political and economic fallout that is going to create stress that can lead to irrational behaviors. The US embargoed Japan pre-WWII on oil, rubber, and other products and we all know what the Japanese response was.

What happens to our own economy when we have people living in suburbs and exurbs with 50+ mile commutes? Will the economic system build electric cars (or light rail or whatever) in time to save those investments? Or if we have to wash our hands of such investments, who eats the cost? And if the banks eat the cost, will they have any remaining capital to invest in alternatives and new infrastructure?

Meanwhile, countries like Mexico aren't going to be getting any richer, life will get harder, and no matter how bad we have it, it is likely to look better than what they have. Will Mexico go quietly into the dark ahead of us? I don't think so and your closing comment is dead on the money. Peak oil is going to be more of an economic and political problem than a technical problem. We possess the technical capacity to create a functioning society on a mix of wind, solar, nuclear, coal, and biomass energy sources (and slowly, over decades, phase out the coal since it has similar constraints as oil being a finite fossil fuel). The gigantic question is whether we will possess the economic and political capacity to actually do it without doing something irrational instead.

The gigantic question is whether we will possess the economic and political capacity to actually do it without doing something irrational instead.

In 1939, as Japan & Germany were slowly being choked off from fuel supplies, they did the "irrational" thing, they went to war.

In post Sept. 11, 2001, as the USA finds itself slowly being choked off from the succor of life (choked off for other reasons, like mounting debt and Hubbert's unforgiving curve), we are doing the "rational" thing by also going to war against the whole world. Springtime didn't turn out too well for Hitler and Germany. But this time it will be different because, Mein  Leiber Herr, the Higher Father/Fuerer is on our side. Anyone who speaks up against Big Oil or our brown shirt boys is a "cut and run" Traitor.

Precisely.
I expect that a lot of houses will be abandoned part of the year, in the north in winter, and in the south in summer. Retired people will find it cheaper to move in with each other and share houses half the year. This will also shave peaking power needs in the south and in the north.
Smack on the spot, JD. As have said before local preconditions will influence the effects peak oil has on local society.

The best thing I'd say you can do to prepare from peak oil is getting politically interested, maybe even active and try to solve as many local issues as you can.

Stuart,

I understand your models and and agree with approach but have two questions about global supply vs individual fields.

1.  To date much of the production has come from relatively few fields and/or from very developed countries that can recover the oil efficiently.  What happens when a majority of these locations go into decline?  In theory oil from more, widely scattered smaller fields will offset the decline of fewer larger ones and slow the decline, at least early on.  Do you think this is physically possible knowing how many wells, pipelines and distribution systems need to be established?

2.  If in the past oil was fungible by having inherent supply greater than demand.  What happens when demand exceeds supply (or wants to)?  Will oil still be fungible?  Or will nation states want to hoard supply for future use and not bring it to market?

I think either of the scenarios above could change the shape of the hubbert curve moving forward.  There may be very little change to the TOTAL oil recovered but a big change in the RATE it is recovered.

Maybe I missed it but I don't see how these are factored into the shape of the global curve.  The curve by default is the best case scenario for depletion.  I think I have pointed out two but what factors (if any) could impact the curve so it does not hold to the sigmoid shape post peak?

Mr. Hubble:   Your analogy using capacitors is highly misleading. You can discharge any capacitor no matter its size at the same rate, simply insert the correct value resistor in the line.  For the same reason you install a choke in a gas well.   To control the flow.  if there was no resistance in the line the cap would discharge instantly.
if there was no resistance in the line, the cap would discharge instantly.

Now you're talking technical in my old field of practice. Actually, even if the line was superconducting (no resistance), it would have parasitic inductance which would block instantaneous discharge through the series LC circuit.

I think it is valid to model underground crude flow with electrical RC networks since porosity of underground channels and viscosity of oil would be represented by variable resistance. The total amount of charge, Q in the system will have a finite value just as Hubbert's total reserves value Q is a finite number that bleeds off as we attach more and more discharge paths (thus decreasing total resistance) and over time to suck out more and more of the less and less available fluid.

No problem, read these for the analogy:
http://mobjectivist.blogspot.com/2005/09/rc-circuit-analogy.html
http://mobjectivist.blogspot.com/2005/10/electrical-shock.html

Step Back is right, although the physics of the two processes naturally differs, the matthematics is exactly the same.

The UK fields discharged so quickly they did not have much of a long term impact on the slower discharging resrvoirs.

Another analogy. Say you go biking on a hilly terrain. You are going to have a much slower average speed (a type of rate) than if you are on the flats, because as you go slower on the inclines, you tend to stay on them longer. On the downhills you gain speed, but since you don't stay on them as long they don't make up for the overall average speed loss.

Just trying to point out how rates can be counterintuitive.

I was reading a paper yesterday that claimed that projected energy use is always much higher than the actual.  We never need as much energy as we think we will.

I suspect the reason for this is the one Matthew Simmons mentions: that since 1970, the gap between the haves and the have-nots has gotten wider and wider.  When the Club of Rome made their prediction in Limits to Growth, they assumed that the rest of the world would be catching up to the U.S.  But instead of a car in every garage, all over the world, we got two cars, an SUV, an ATV, and a boat in American garages, while in Africa a bike is still beyond a lot of people.

This continues today.  Americans gripe about high prices, but really haven't cut back.  Meanwhile, there have been riots over fuel prices in Indonesia, Yemen, Panama, etc.

It could go on for quite awhile after peak oil - demand destruction mostly in poor countries - but only if other countries continue to let us buy on credit.  It's in their interest to keep lending to us, because if we go down, we'll take the world economy with us.  But it can't go on forever, and if it unravels, it could be quite messy.  Even economists who are not worried about peak oil are worried about our staggering debt, and what will happen if the dollar collapses.

Indeed, one cannot really separate concerns over peak oil from general concerns over the vulnerability of either the US or the global economy, both of which appear to be in a state of what I would call 'unstable equilibrium'.

A previous poster commented that the way an oil field behaves when oil is withdrawn is analogous to an electric circuit with capacitors, resistors, etc.  I would agree with that.

I myself would liken the current economic situation to a sharpened pencil balanced on its point. Theoretically, the pencil is in a state of static equilibrium, but that equilibrium is high unstable, and the proverbial butterfly flapping its wings will bring it down.

Peak oil could well be the thing the triggers the economic perfect storm, just at a time when we will need a strong economy to form the vast amounts of capital required for a major energy infrastructure change. So, we have the potential here for a very unpleasant negative feedback loop: the worse the oil problem gets, the worse the economy gets; but the worse the economy gets, the less we are able to get ourselve out of the oil problem, etc, in a downward spiral of ever-decreasing radius.

(For some reason, I seem to find myself in a metaphor mood today.)

You are describing a positive feedback loop.
I stand corrected.  Perhaps I said that because I was in such a negative mood :-)
What Hubbert's graph doesn't predict is the affect of demand destruction, country by country, and how that ultimately affects economic predictions.  Wealthy countries are in a better position than poorer ones, to the point where the U.S. might feel a decline of 2% and poorer countries might feel a decline of greater than 5% on the downside of the curve.  So, we have a situation where, the affects of the decline show up later in wealthier nations and sooner in poorer ones, which ultimately gives wealthy countries more time to change or more time to deny the problem.

What do you think, Stuart?

Thank you very much for all your time and effort on this subject.  You are opening our minds and helping to educate us!

In my recent attempt to read more and comment less, I've been going over and over this (excellent) analysis and the comments - but I'm confused!  It seems that the basic idea is that while individual fields may have steep decline rates, taken as a whole world production is still 5%.  The validity of the statistical analysis stems from the large number of independent producers / data points that feed it.  So while some producers have strange curves, the aggregate has a fairly normal distribution.

My concerns are:

1.    I'm not sure this is what the picture looks like - my impression is that we get most of our oil from a relatively small number of very big fields.  The North Sea is one of them - but I'm not sure I understand what the "BP" data represents - is this representative of generalized world production?  What do the other big ones look like, and will they distort the picture?

2.    How valid is the data used?  My understanding is that the data for at least the biggest producer is suspect.  If we don't know how hard SA is pushing their fields, then how can we be sure they will not change the shape of the depletion curve?

3.    Also, the premise is that the new technologies used to extend maximum output are used everywhere - but is this so, and even if it is, will it have the same results everywhere it is used (i.e. less effective in some places, more damaging in others)?

Essentially, what is the relationship between the BP data, UK North Sea, and what does it imply about the world data in general?

I never quite found the answer (or did not understand it) to the question:

Since those technologies are being applied everywhere these days, maybe global production will behave like the UK, which would be extremely hard for the world economy to handle.

Isn't all based on the valididty of the world data - and how accurate do we think this dta is?

First of all I would like to thank Stuart who again has done a great job in providing good and fascinating background data and analysis for good and important discussions at TOD.

I personally think it is important to try to understand or project how oil supplies will (if?) decline (the decline rate) the next decade. It could be that an evaluation of the R/P (Reserves divided with Production) ratios as these stood at end 2004 could give a supplementary helpful hint.

I used the oil (all liquids) reserves and production data as these are presented in BP Statistical Review 2005. Further the World has been split into three categories;

·    OPEC
·    FSU (Former Soviet Union)
·    ROW (Rest Of World (World minus (OPEC+FSU)))

Category              R/P       Share of world prod.
(Years)            (%) 2004

OPEC                   74,0               41,0
FSU                    29,0               14,2
ROW                    13,5               44,8

ROW as tabulated above has the biggest share of world oil production, but the smallest R/P ratio.

Even though the R/P ratio for ROW has only seen a slight decline through the last years, the ratio suggests that production could enter into a steep decline in the near future for this group of countries.

Question then is how steep will the decline for ROW become, and how fast would OPEC (and FSU) have to add production increases to maintain the world depletion rates as suggested by the Hubbert's analysis (which so excellent has been presented in this thread)?

It should also be given due considerations to expected declines from Burgan, Cantarell, Ghawar and other giants that will start to decline in the near future.

The above could suggest that as declines sets in, it could initially become more dramatic (higher decline rates) as suggested by the presented Hubbert analysis, and the decline rates could of course slow later on.

Fact is as of now no one knows how global oil supplies will decline when it starts (we are presently flying blind here), that is why I found Hirsch's article on this subject very important.

Canada and oil sands distorts this picture. Venezuela and oil sands is the primary source of reserves in OPEC once you wash out the fake Arab and Iranian data.
Some Y (P/Q) Intercept numbers for various regions/countries:

Lower 48, 6.2%; Texas, 6.0%; Iran, 13.0%;  North Sea, 13.5%; Saudi Arabia, 7.0% and the World, 5.0%.

For Texas, the actual net decline rate (net after all new production) is about two-thirds of the P/Q intercept.  For the North Sea, the net decline rate is about half of the P/Q intercept.

This suggests that the world will experience a net decline rate, from conventional production, of about 2.5% to 3.3% per year, post-peak.  3% would be a good guess.   In round numbers, it suggests that net conventional oil production will initially drop at the rate of about 2 mbpd per year.     Note that in four years, the drop would be roughly equal to all of Saudi Arabia's current oil exports.

Of course, with demand growing at 2% per year, this is a 5% year over year shortfall between what the supply is and what we would like to consume.

Of course, with demand growing at 2% per year, this is a 5% year over year shortfall between what the supply is and what we would like to consume

What we would "like to consume" is not consumption or demand. So it is incorrect to add it to the 3% to get 5%. It may place pressure on the demand, but it is not what we(you) are measuring in this case, which is a straight production/supply/demand decline - the Q axis on a graph.

Step Back:  You are absolutely correct, however I wasn't considering patristic inductive reactance or parasitic R. If they were not present which is not possible the discharge would be instant.  BTW I have spent 40 years developing different sensors to locate oil bearing formations in the uncased open bore hole.These sensors included sonic, induction, and magnetic resonance. I never saw or used a dipchip till I was about 40 years old. A dip chip is a dual inline package containing a few transistor gates, the threshold of digital electronics. I'm an old analog guy.
DualInline Guy,
I'm old enough to have played with vacuum tube radios in my old days and yet I'm young enough to deal with all digital or mixed signal IC circuitry now. We've come a long way baby on the electronics frontiers. Unfortunately, human nature is as savage and ugly as it always was. Nero fiddled back then. Our crony corrupted leaders of today FUBAR everything around them today, from Katrina, to Iraq, to US energy policy.

If you want to model them electronically, they are the parasitic components who will send our system into unstable oscillation and possible system crash.

Stuart (or anyone else),
Doesn't this Hubbert linearization analysis to figure out the decline rate assume that the peak production coincides with production of 50% of total oil.  While true for the US, is it possible that the world could reach production peak after half the oil has been pumped (due to demand/new technologies/more wells per field/etc)?  If possible, how does this affect the calculated decline rate?
A brief review of Hubbert Linearization, based on my work and on Stuart's:

(1)  Qt = Estimated total cumulative production

(2)  Contries/regions of sufficient size and with sufficient production history invariably show linearization.

(3)  In the absence of political problems, e.g. Iran & the FSU, oil production peaks--regardless of the subsequent decline rate--at about 50% of Qt.  The Lower 48 peaked at 48%, and the North Sea peaked at 52%.

(4)  The Y (P/Q) intercept appears to at least qualitatively predict the subsequent decline.

(5)  Texas, the swing producer before Saudi Arabia, showed the latest peak, at 54%.  Right now, Saudi Arabia (at 55% of Qt) is basically at exactly the same point at which Texas peaked.   The world, now at 50% of Qt, falls right between the Lower 48 and the North Sea.

(6)  Thus, my assertion that Texas is to the Lower 48 as Saudi Arabia is to the world.

Isn't it an amzing coincidence that the administration is now making a push for "clean coal"?
p.s. Donal has a better link re this in the next thread below
The NYT has an article today about Secretary of Energy Bodman's visit to Saudi Arabia.  He said that he came back with increased level of confidence that the Saudis can do what they say they can do.

I was interested in Saudi Oil Minister Naimi's comments, "We do not intend to be the swing producer in the future."

In any case, a crucial point regarding a 2% to 3% world decline rate is that almost all of this decline--my guess is 90% plus--will come from the export side, and not domestic consumption in exporting countries.

I believe that net world oil exports are on the order of 33 mbpd.   Using the crude + condensate number, if oil production drops by 10 mbpd over a five year period, my bet is that at least 9 mbpd of this will come from the export side.  So, a 14% drop in overall conventional oil production would, in my opinion, equate to at least a 27% drop in net oil exports.  As Kenneth Deffeyes pointed out, this will result in a war for the remaining oil exports.  He just hopes that it is fought with dollars and not with nuclear weapons.

I had a look at ASPO production figures and have come to a very similar position to you. Making a couple of assumptions, internal consumption doesn't increase (unlikely) and ASPO production figures for 2020 are broadly correct, I came out with about 32 Mbpd of exports from 2000 reduced to about 20 Mbpd of exports in 2020. If there will be only 20 Mbpd of oil available for exports in 2020, USA will take, say, 13 Mbpd, China takes, say, 6Mbpd, who has the remaining 1 Mbpd of available crude? Germany, Japan and South Korea who use lots of oil (>2 Mbpd) but produce virtually no oil themselves will be in trouble. Any ideas or comments anyone?
Stuart said
this theory does imply that some economic growth will be possible for quite a long time.

Whether that's a good thing for the long-term future of humanity is a different question.

This is not inconsistent with the overshoot and collapse predicted in Limits to Growth. Indeed, the authors said in Limits to Growth: the 30 Year Update (2004)

The end of growth, in whatever form, seemed to us to be a very distant prospect in 1972. All World3 scenarios in LTG showed growth in population and economy continuing well past the year 2000. Even in the most pessimistic LTG scenario the material standard of living kept increasing all the way to 2015.
Hi Stuart,
I understood from ASPO statistics that cumulative production up to day is about 950GB.
If you suppose PeakOil in 2005 and URR as 2350GB , then  should PO occur at about 40% of cumulative production ? It seems to be to soon for 2350GB , with 50% only in 2012.
For URR 2350 we may see an increase in oil production for a few years and a steeper decline afterwards. Otherwise, with URR 1850 ( Campbell ) or URR 2000 ( Deffeyes ) PO is already here with probably a steeper decline than your prediction.
Be careful on what kind of oil you are talking about! the URR at 2,350 Gb includes NGL, deepwater, etc. The cumulative production @ 950Gb is for regular oil only.
Stuart, Where do you get that BP data from the period 1965 to 1985? I can't find that data.
Dave-The Excel spreadsheet version of the 2005 BP Statistical Review of World Energy covers 1965 through 2004 in most data categories. Pricing goes back to 1861. Download from: