EIA: Annual Energy Outlook 2006
Posted by Prof. Goose on February 15, 2006 - 11:57am
Topic: Supply/Production
Tags: eia, hubbert peak, iea, oil prices, peak oil [list all tags]
The Annual Energy Outlook 2006 presents a forecast and analysis of US energy supply, demand, and prices through 2030. The projections are based on results from the Energy Information Administration's National Energy Modeling System. The AEO2006 includes the reference case, additional cases examining energy markets, and complete documentation.Just wanted to give everyone a heads-up that it was out: (link). (and here's a link to the general forecasting page which links to this report...). I am betting we'll be talking about this over the next few days...
I wonder if they even believe what they're writing?
Our EIA Scenario is not affected today as the extraction forecast in the AEO is based on their reference scenario while we chose their 2005 "high price scenario" which is more conservative than today's outlook. The URR remains exactly the same as the last release an thus does not affect the exhaustion date next century.
All Scenarios and EIA's 1991 outlook is at http://trendlines.ca/economic.htm
Can someone disagree with your outlook and not whine?
If so, tell us how.
Yet pundits here ignore the best Peakist predictions and dwell on their navel gazing and ad nauseum posts that we are post peak. As if our friends from Ireland and the Netherlands had somehow joined "the dark side".
So yes, Bio, it is mere whining.
In 1991, Lynch said we be at 81-mbd in 2005. It was indeed 84. IEA was next best with its 1996 forecast of 80-mbd for 2005. And EIA (aka DOE) saw 79-mbd coming back in 1997.
All the while Campbell foresaw 55-mbd in '91 and upped it to 64 in 1997.
In this our third year of publishing the Scenarios, we continue to see the optimists coming down and the Peakist revising upwards. And IEA's middle-of-the-road outlook continues to represent the likely outcome...
Extremists at both ends of the spectrum face gnashing of teeth each year end. We have two sets of whiners...
Saying April was peak, like the "whiners" on TOD or that production will continue to rise to 120 million (or whatever number) in some far off date?
We both know the answer.
The worry here is that this rate cannot be maintained. The evidence is growing that it cannot.
While I still think your input is needed, it must be noted that the reason some people here think you are a complete douchebag is that you never bring any evidence to the table suggesting the opposite.
Nobody cares about trendlines. I know. I actually follow them. Try providing some indicators that we can continue "producing" oil at 1 or 2 million barrels per day more than the year before for the next few years. Dotted lines on a chart mean nothing.
"The same is true as you pointed out in natural gas where the stocks were reported as going up when one day 2 months ago the EIA web page showed that there was a notice to participants that the pressure readings inside the salt-dome storage capacities were so low that the structural integrity of the pressure chambers was called into question. There's a limit below which the pressure would cause the chamber to collapse. This was reported on the website and immediately removed in a matter of hours later. When you look at the official information on storage there is no record of that low pressure reading in the long term EIA natural gas storage chart. So there's clear evidence that the government is playing around with the storage information for natural gas."
http://financialsense.com/fsn/BP/2006/0204.html#seg4
Has anyone heard anything on this, could it have been true?
Domestic Crude Oil Production
Begins To Decline After 2016
The graph actually shows domestic production bouncing up in a big way between now and 2016.
And this is the assumption that ANWR will not be touched!
I bet the EIA crew comes here and reads this. They say to one another "yep TOD is right on the money, too bad we would get fired if we didn't put out this propaganda.... aka Future energy Outlook".
I wish we would hear more from the Abundant Oilers - if any of you are listening, let me ask you some questions: "How does it feel to have people call you liars? How does it feel to be a part of a system that will lead to the majority of the people being blindsided by some nasty scenarios? If you see that people's lack of the ability to effectively plan has led to massive hardship and even death, will you take any responsibility?"
Come on Abundant Oilers - come out and defend yourself! Get your buddies who aren't on this blog to join and fight using your cold, hard data.
Here is another interesting article:
http://www.mywesttexas.com/site/news.cfm?newsid=15933008&BRD=2288&PAG=461&dept_id=474107 &rfi=6
If we drill down, we find that the fudging is getting less and less plausible, even compared to AEO's of a few short years ago. Here's the graph of what they claim for domestic US production (a subject I happen to have looked into somewhat).
In the text surrounding this figure, there are basically no arguments justifying why it's believable. Here are the issues I see.
- The deepwater production is all in the Gulf of Mexico. The last two years in a row, it's been seriously impacted by hurricanes, and the global warming evidence to me suggests this will continue to be a major issue - much more so by 2030 than today. Thus that big increase in deepwater production is, IMO, contingent on figuring out Category-5 proof techniques of subsea oil extraction - I'm not saying that can't be done, but I expect it to spread production of the available reserves out significantly. However, let's let this point slide - I accept that my view is certainly not mainstream yet.
- The lower 48 onshore has been declining at a gradually increasing pace for many years - it's now up to several percent a year. They are proposing that in the future, production will level out and become almost constant (ie the gradually increasing decline rate is doing to gradually decrease back towards zero). No region has ever done this. I don't know why any would - it seems completely implausible.
- Ditto the shallow water offshore which also miraculously levels out.
- The net effect of all this is that, after many years of basically decreasing production (with the odd exception before JD calls me on it), we will now have a sharp trend break and production is going to increase again for most of a decade.
- The area under the curve to 2030 corresponds to about 50gb of oil. Judging by the relatively shallow declines obtaining in 2030, it would seem they are calling for another 50gb-100gb after 2030 before we hit the final URR. Ie, they are estimating total that the US can producing another 100gb-150gb of oil, versus the roughly 190gb we've used to date. My estimate was remaining oil production was 27 ± 8gb. Proved reserves stood at about 22gb at the end of 2004.
Now, maybe some would like to argue their extrapolations are more reliable than mine. What I would have liked to have seen is their argument for why their extrapolations are plausible. There's absolutely no justification provided in the text (see p91). When I see unlikely looking extrapolations, with no justification, which lead to a politically convenient conclusion, I tend to draw the inference that the process which produced the document was too flawed to be worth further reliance on it.... But then again, staring into the sun can make a fellar blind and deranged.
On energyresources a while back (I can't find the ref# dang it!), Glenn Morton <http://home.entouch.net/dmd/Oilcrisis.htm>
ran down a list of the deepwater GOM fields with the projected production rates and the actual, to-date, production rates of those that had started up. All were fairly well below projections. Seems that optimism is the hallmark of any entrepreneurial endeavor. Maybe there is a psychological principle involved which dictates that the higher the stakes, the grosser the exaggerations of projections. We could call it the Kurzweil effect :-)
ET
'Twas ever thus.
Having said that, there are some points in their favor. The deepwater graph shows steady growth interrupted by the recent hurricanes. EIA forecasts that growth will resume. Basically they are assuming that the last couple of years of bad hurricanes were an anomaly. I think that this accurately represents the mainstream meteorological view.
I understand that you don't agree, and that there are those in the community who say that global warming is beginning to have an effect, but even among that group I don't think they would claim that we are going to see a repeat of 2005 every year from now on. Even if the average is getting worse, it is a very slow, gradual climb, and there is a lot of random year to year variation in terms of how any given region will be hit by hurricanes. I doubt that even you would predict that there is a greater than 50-50 chance that 2006 will produce significant hurricane damage to GOM oil production.
As for the rest, my eyeballing of the lower 48 production curve shows it concave upwards. This is exactly what you expect from exponential decrease. Their extrapolation looks just fine, visually.
The main one that I agree is questionable is shallow water, which has been concave downwards but where they show it leveling off. Still, this is the smallest contribution to the overall production so it wouldn't change the main conclusion much.
As far as your estimate of 27 +- 8 GB remaining, does that include deepwater offshore? Kind of an awkward question, I'd think. The HL technique doesn't exactly respect geographical boundaries. You draw a curve and fit a line. If that curve includes the beginning of a ramp-up of deepwater production, then what, the line automagically knows how much will come from that region? I don't think so!
That's what a constant decline rate matching the 1990-2004 data would do (the red line). So they are definitely assuming that decline rates are going to get milder in the future for some reason. However, don't forget that over the long haul growth/decline rates have been fairly continously, if noisily, getting worse, not staying constant:
So even the exponential is likely over-optimistic.
In response to your point on extrapolating the Hubbert Linearization (which indeed was of all US production in including Alaska and GoM deepwater): it obviously is feeling the beginning of the deepwater GoM bump because it has been going on for a decade or so. However, if one felt that there was a very large amount of GoM such that only a tiny fraction of it had been so far developed or proved up, the linearization would miss that (I agree). I do not believe that is the situation - there is not large amounts of unproved discovery out there (Bubba could speak more strongly to this). It's possible GoM will push things up towards the top of my error bars, but I see no reason to revise my estimate at this point.
There is some disagreement between all three sources (EIA, MMS and World Oil) but it is relatively minor up to about the year 2012. Even outside of hurricanes, only a very minor bump can be expected from GOM oil production. And it looks like the MMS predicts that GOM production actually peaks in the 2009 to 2011 period. Somehow, the EIA has GOM production increasing after that to about 2016/2017 or so. Needless to say, I'm skeptical about that.
And of course Stuart's Lower 48 estimate is real based on historical decline rates. The EIA's is an unsubstantiated fantasy that doesn't seem to consider declines at all.
But really, it changes my conclusions very little. The peak is 2011 at about 2.2/mbpd for GOM oil production. Again, no disruption from hurricanes.
As far as GOM deepwater, their graph seems to show a good 15+ GB coming out of there, but I don't know if that is plausible or not. I don't see how the USA-based Hubbert curve could predict the GOM total, since we are so early in its production history at least as shown on the EIA extrapolation.
I couldn't figure how to post the picture, but this link gets you to an interesting graphic.
http://www.aapg.org/explorer/2005/09sep/hurricane.cfm
http://home.att.net/~thehessians/disasterwatch.html
"THE COMING HURRICANE SEASON - The director of the National Hurricane Center is warning Americans that the 2005 hurricane season may end up being mild compared to 2006. The effects of an El Nino weather system in the Pacific that raises ocean temperatures could increase the intensity of hurricanes this year. He says far too many residents ignored hurricane evacuation requests in 2005."
Mars Tension Leg Platform BK MC 807 is at 3250 ft water depth and should produce 220,000 BOPD and 220 MMCFD
Good discussion of the Magnolia field development ($ 600 MM) at 4,700 ft water depth 180 miles south of Cameron, Lousiana, in Garden Banks blocks 783 and 784. Magnolia will tieback to Shell Enchilada Plfm 50 miles away.
http://www.offshore-technology.com/projects/magnolia/
Notice the graphic showing the increase in TLP depths over the years from 1000 to 4000 ft.
As near as I know, 5000 ft depth is thought to be the limit for anything to be semi-attached (using Tension Legs) to the ocean bottom. Water deeper than that requires a semisubmersible and a lota' anchors. Anadarko's et al Mississippi Canyon block 920, in a water depth of 8,000 feet
will serve as a hub for the development of 17 (!) blocks in the surrounding area. Cost $ 400 MM. Project fiche is here.
http://www.anadarko.com/news/news_release_detail.asp?r=1&id=642680
A new pipeline from Magnolia to the beach would run (I estimate 2 MM/mile) = $360 MM so total would be a cool $1E9, so that's out of the question. Besides, as the older shallower fields run out, the existing pipelines gain excess capacity, so they'll naturally want to take advantage of those existing assets. I finally started to feel my 38 year age one day when I arrived on Galveston 144 to inspect the old plfm there to see if it was suitable for removal and recycling it as a pipeline junction platform we needed over towards Corpus Christi. I had designed the pipelines that connected 144 and 146 across the Galveston Anchorage Area and Galveston Shipping Fairway to the beach 10 years earlier, but it had finally run out of gas and was being decommissioned (that was 1988). The pipelines are still there waiting for a deeper strike in the vicinity to come along.
I think this year there are probably a lot of offshore platform engineers running around in Houston updating their design wave height much higher than the 54 ft they used before.
Yes, yes, but that NOT accurately represent the mainstream CLIMATOLOGY view. There are some diferences between climatologists and meteorologists. Science is one diference...
Bsically, the meteorologists give no explanation for the "anomaly" while the climatologists MAINSTREAM vision is that Greenhouse Warming is real. There are almost no controversie between climatologists currently, the GW is mainstream between climatologists and the "sceptics" lose the last terrain they had the last year because 3 scientific papers showed that the troposphere was going warmer as predicted by the GW's models. The "sceptics" are being reduced to say that the GW will be not so strong as the models say it will be, because they were forced to admit that there are GW.
We too need take note that the Pacific's Typhoons are geting more intense the last years too and that the meteorologists cannot explain it. While the meteorologists say that there is a Gulf's anomality they cannot say that there is an Pacific's anomality, see you, the Pacific Ocean have too much water to have an "anomality", anything happening to the Pacific Ocean is mainstream and not an anomality. So, the only explanation for the Pacific's Typhoons geting more intense is GW.
The meteorologists have no explanation for the "Gulf's anomality". They cannot give a physical explanation for that "phenomenum", they simply give no explanation, nada. The only scientific papers explaining it show a strong correlation between warmer Gulf's waters and stronger hurricanes. But meteorologists are having a strong aversion to link the dots and say that GW is geting the Gulf's waters warmer. The problem is that there is no other explanation for the Pacific's waters geting warmer, only Greenhouse Warming. And there are scientific papers that show a correlation between warmer Pacific's waters and stronger Typhoons...
The scientific vision is that there are GW. There is no real controversy between the scientists. The TV's meteorologists are not following the scientific trend for now. The meteorologists will need sooner or later to account the GW effect to make correct weather predictions or they will have problems if they continue to predict a weak hurricane season at the year start and after they change the prediction for a strong hurricane season (yes, that happened the last years... see you, that is the reason there is a hurricane "specialist" that never get a wrong prediction about the hurricane season, he ever change his predictions from "weak season" to "strong season" when start to be evident that will be a strong hurricane season).
And while we maybe not have a strong hurricane season this year (well, USA can get lucky, luck happens), strong and maybe stronger hurricane seasons will happen because there are Greenhouse Warming (don't count on good luck forever, Fortuna is capricious). By the way, while maybe there is not a strong hurricane season this year, it is problable that the summer will be very hot because the winter is being warm. Take note that very hot summers make the energy consumption go up to he sky, all that people using air conditioners. And there are a good deal of electric energy that come from oil...
João Carlos
Sorry my bad english, my native language is portuguese.
I happen to be well acquainted with a National Weather Service meteorologist.On several occasions I tried to get his thoughts on climate change. He seemed to be completely disinterested in it. Their entire focus in on getting the short-term forecast somewhere near right. In my words, meteorologists study the noise not the trends.
In all likelyhood we will see more seasons nearly as active as 05, as the trend is for the next fifteen years or so to see above normal activity. This is from both the meteorologists and the climatologists. (And some mets really do care about this stuff) :)
This is from NOAA's forecast for the 2005 season:
"3. Multi-decadal fluctuations in Atlantic hurricane activity
Historically, Atlantic hurricane activity has exhibited very strong multi-decadal variability, with alternating periods lasting several decades of generally above-normal or below-normal activity.
Hurricane seasons during 1995-2004 have averaged 13.6 tropical storms, 7.8 hurricanes, 3.8 major hurricanes, and with an average ACE index of 159% of the median. NOAA classifies all but two of these ten seasons (El Niño years of 1997 and 2002) as above normal, and six of these years as hyperactive. If the 2005 season verifies as predicted, it will be the seventh hyperactive season in the last 11 years. In contrast, during the preceding 1970-1994 period, hurricane seasons averaged 9 tropical storms, 5 hurricanes, and 1.5 major hurricanes, with an average ACE index of only 75% of the median. NOAA classifies twelve (almost one-half) of these 25 seasons as being below normal, only three as being above normal (1980, 1988, 1988), and none as being hyperactive."
In other words, every 25 years or so hurricane activity "flips" from an inactive mode to an active one. Since we are still a few years away from even the mid-point of the latest active cycle, and since SST's in the Gulf and Carribean have been at record levels the past few years, with no sign of a reversal in the trend, we are almost assured of several more seasons like 05.
ET
It looks like they have deliberately 'wiggled' the line to make it look more believable.
How can they predict such a 'noisy' curve?
Even if domestic production could rise, an increase of around 35% until 2030 in Oil consumption is completely unrealistic. Probably not even CERA would came out with something like this.
As for prices, projections these days are completely useless. When the heat turns around the corner some economies will simply colapse, progressively easying away prices. But as production continues to fall prices will go up again and other economies will in turn fall.
These kind of reports are very very dangerous.
http://tonto.eia.doe.gov/FTPROOT/forecasting/04842000.pdf
I don't actually know how one would do a good comparison ... perhaps a plot of their five year previous projection alongside the actual outcome? I'd expect to see them "trailing reality"
Looking at the history of their previous projections compared to what subsequently happened is certainly an important level of response.
Because of their importance in the public's eye, that history should always be but one click away on TOD.
I suggest that major arguments that have been slowly developed here be easily accessible. The crtique of their reliability as forecasters should be high among our arguments.
One click away. Put these in a sidebar. Unfortunately, blog structures allow major arguments to be slowly buried. Not a good structure.
I tried that once but on three years:
Their predictions don't mean much!
And you can't just blame EIA for this. It's the nature of, well, reality. I've tried to explain this before