Peak Oil at 2014?

14-04-2010 12:02am

http://news.yahoo.com/s/nm/20100413/bs_nm/us_iea_3

Quote:

World oil demand to hit record high this year: IEA

LONDON (Reuters) – Global oil demand will hit a record high this year, the International Energy Agency (IEA) said on Tuesday, revising up consumption estimates as the world economy recovers from recession.

The Paris-based adviser to industrialized economies raised its forecast for world oil demand growth this year to 1.67 million barrels per day (bpd), up 100,000 bpd.

The agency said in its monthly Oil Market Report that world oil demand would reach an average of 86.60 million bpd this year, up from 84.93 million in 2009.

The previous record high for world oil demand was 86.5 million bpd in 2007 before the onset of the global financial crisis and economic slowdown.

"There are signs of oil demand picking up in North America and the Pacific, Asia and the Middle East although consumption in Europe still looks weak," David Fyfe, head of the IEA's Oil Industry and Markets Division, told Reuters.

But the extra demand will largely be met by production from outside the Organization of the Petroleum Exporting Countries.

The IEA raised its forecast for non-OPEC output in 2010 by 220,000 bpd to around 52.0 million bpd due to higher output by OECD countries. Overall, non-OPEC supply is expected to rise by around 500,000 bpd this year.

As a result, the IEA estimated demand this year for OPEC crude and stocks would fall by 200,000 bpd to 29.1 million bpd.

This will test the "peak oil" theory a bit, can supply keep up or will prices continue to rise.

YFlyer · 14-04-2010 12:31am

Petrobras could increase production by 6 fold within the next ten years. They have found a number of significant wells with crude having an API of around 28.

http://www.oil-price.net/en/articles/petrobras-discovers-oil-again.php

14-04-2010 10:43am

YFlyer wrote: »

Petrobras could increase production by 6 fold within the next ten years. They have found a number of significant wells with crude having an API of around 28.

http://www.oil-price.net/en/articles/petrobras-discovers-oil-again.php

The recoverable reserves of the accumulations have been put at 65 million barrels

About one days worth!

YFlyer · 14-04-2010 11:12am

Yeah it seems small however the Campos Basin has a confirmed reserve of 7.21 Billion barrels of oil.

They are finding new wells all the time. Even in shallow water

14-04-2010 1:40pm

OK we're up to 100 days worth now from one field. But this underlines the simple fact that it is being consumed quicker than it is being found.

As I said further up, consumption is still increasing and at some point will outstrip supply and force prices up unless the supply can be increased.

This recent price chart shows demand driving up prices rather than supply increasing to hold prices steady.
As to why, either supply is being withheld to keep prices high or supply can't keep up with demand.

I don't know which it is but either way it's bad news for consumers.

Edit: forgot to add the fact that as oil is priced in US dollars, it looks much worse than it actually is because the value of the dollar is falling rapidly as well, therefore the rise in real terms is only about half the dollar price.

26-04-2010 7:40am

http://www.guardian.co.uk/business/2010/apr/11/peak-oil-production-supply%EF%BB%BF

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

The energy crisis outlined in a Joint Operating Environment report from the US Joint Forces Command, comes as the price of petrol in Britain reaches record levels and the cost of crude is predicted to soon top $100 a barrel.

"By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day," says the report, which has a foreword by a senior commander, General James N Mattis.

Not new news, but still scary all the same.

zod · 03-05-2010 9:59am

Good movie here .. primarily on peak oil

https://www.youtube.com/watch?v=WAyHIOg5aHk

03-05-2010 10:20am

Demand destruction is already well under way here in the west, for all practical purposes we are already experiencing the affects of peak oil.

03-05-2010 2:48pm

http://www.energybulletin.net/52667

The peak of oil production is passed

We can no longer afford to sit around discussing whether or not we have passed the peak of oil production. We cannot wait, complacently, for price signals to stimulate the development of alternative sources of energy since oil prices will fluctuate wildly. Every time the economy tries to grow, oil demand will exceed supply, causing the oil price to spike up. This will strangle the economy, reduce oil demand and cause the price to fall. Oil companies cannot invest in the face of these wild fluctuations in price. Most importantly, we must remember that to do anything at all requires energy. So, while oil is still relatively abundant, we must invest as much as we can to develop the energy sources of the future. Once the oil supply starts to decrease significantly, we will be too busy just trying to keep food production and essential services running to have any energy left over for building expensive high-tech alternative energy infrastructure.

The peak of oil production was two years ago. For the sake of my children, and your children, we need to just accept that fact and deal with it. When it comes to investing in energy alternatives, do it now, because it will not be possible later.

_________________

zod · 03-05-2010 9:10pm

Fast forward to about 1:50

https://www.youtube.com/watch?v=aiNBCyiB0XA

Talking about 300 dollar barrels of oil on CNBC

13-05-2010 8:23pm

Interesting theory on the next phase of "peak oil", as of today it appears to be "following the script".

http://www.oftwominds.com/blogmay10/head-fake05-10.html

In May 2008 I proposed the Oil "Head-Fake" Scenario in which global recession will drive oil demand down even as oil exporters pump their maximum production in a futile attempt to fund their vast welfare states and thus retain their precarious political power.
Oil: One Last Head-Fake? (May 9, 2008) The terrible irony of the head-fake, of course, is that the exporters' mad efforts to pump more oil merely exacerbates the oversupply, further depressing prices, which are set on the margin. As exporters receive fewer dollars for their production, they attempt to compensate by pumping even more oil. Perniciously, this suppresses prices even more, setting up a positive feedback loop which pushed prices into full-blown collapse.

boc123 · 08-07-2010 9:32am

I'm currently reading Matt Simmons "Twighlight in the Desert". This whole issue to me is the scariest thing going on at the moment. Very surprised that it doesn't receive more mainstream attention.

I suppose it will fairly soon...

coletti · 08-07-2010 11:47am

The price of oil is largely based on the perception of availability of supply. It is to be noted that the oil companies make billions of extra dollars when the price is kept high. Literally billions.

Macha · 08-07-2010 11:58am

Actually there is evidence that investors are not always to blame for high commodity prices:

http://www.economist.com/node/16432870

08-07-2010 12:41pm

According to a poster on "theoildrum" one of the causes of the oil price spike in 2008 was caused by the Chinese bulk buying just before the Olympics to hide problems with local shortages.

As for the main show, current levels of production are likely to continue for another few years (maybe five) before slowly declining.

Consumption is already declining in the west (Ireland has declined 10% since 2006) while China, India and a few other countries continue to increase their consumption.

Peak oil will be the point when their growth is stopped by lack of growing supply, as far as the west is concerned - peak oil has already happened!

The main reason there is no "Mad Max" syndrome is down to the fact that gas has managed to fill the gaps left by oil as well as the demand destruction caused by the export of industry to China (aka the great depression II).

The energy crunch hasn't gone away, it's just been postponed!

maninasia · 08-07-2010 3:20pm

coletti wrote: »

The price of oil is largely based on the perception of availability of supply. It is to be noted that the oil companies make billions of extra dollars when the price is kept high. Literally billions.

I think you'll find it's the oil producing nations that get the biggest cut.

boc123 · 12-07-2010 10:42am

brendansmith wrote: »

This is quite worrying, a good documentary on this is 'A crude awakening'.

I still think that an alternative fuel will be invented before we get in trouble though. What o ye think on this subject?

Just watched that documentary, very intersting but also extremly worrying.

I am not sure what alternative fuel will be brought on-line in time. Have been watching a fair bit of Matt Simmons, he is fairly well respected but if his theories come true we are in big trouble. $600 for a barrel of oil, people going back to live in villages, no more air travel, long distance commuting etc.

12-07-2010 11:10am

boc123 wrote: »

Just watched that documentary, very intersting but also extremly worrying.

I am not sure what alternative fuel will be brought on-line in time. Have been watching a fair bit of Matt Simmons, he is fairly well respected but if his theories come true we are in big trouble. $600 for a barrel of oil, people going back to live in villages, no more air travel, long distance commuting etc.

I wouldn't worry too much about the $600 a barrel oil, the basic laws of supply and demand will keep the price well below that! It simply won't be bought, the economy will collapse before that! (assuming the $600 is in today's dollars)

The western economies have a huge amount of "fat*" that can be used before there is genuine hardship.

*fat: The classic "american lifestyle" will be forced to change, as you say

people going back to live in villages, no more air travel, long distance commuting etc

But, just doing that would delay peak oil for another generation or two.

boc123 · 12-07-2010 11:18am

Deleted User wrote: »

I wouldn't worry too much about the $600 a barrel oil, the basic laws of supply and demand will keep the price well below that! It simply won't be bought, the economy will collapse before that! (assuming the $600 is in today's dollars)

That wouldn't be great news either though;)

I know what you mean though, big changes ahead either way.
I saw a prime time clip from a few years ago and Eddie Hobbs is on the case so all should be well in the long run

coletti · 31-07-2010 11:42am

I'm old enough to remember being told in the 1970 that oil was running out, and that it would all be used up by the year 2000.

We're not at 2010 and, if you talk to the exploration companies, they tell us there is plenty of oil to last a very long time.

It suits them to start scarcity stories as that puts the price up and makes them enormous amounts of profits.

Is "peak oil" the 2010 equivalent of the "oil running out" stories of the 1970's?

31-07-2010 1:34pm

coletti wrote: »

I'm old enough to remember being told in the 1970 that oil was running out, and that it would all be used up by the year 2000.

We're not at 2010 and, if you talk to the exploration companies, they tell us there is plenty of oil to last a very long time.

It suits them to start scarcity stories as that puts the price up and makes them enormous amounts of profits.

Is "peak oil" the 2010 equivalent of the "oil running out" stories of the 1970's?

Peak oil does not equal oil running out!

What it means is the fact that it can't be extracted quickly and cheaply anymore.
There is an estimated 40 years left at current consumption rates, the problem is that they can't get it out any quicker. Drilling more wells only has a limited effect, drilling in more and more difficult and dangerous places alos is of limited help. Tar sands and other low grade oils are being extracted more and more but these are very hard on the environment.

Because of these issues, and many others, the days of cheap (ish) and plentiful oil are over. One of the contributary factors in the recession was high oil prices.

Capt'n Midnight · 31-07-2010 1:58pm

Deleted User wrote: »

Peak oil does not equal oil running out!

What it means is the fact that it can't be extracted quickly and cheaply anymore.

Most of the oil is still in the ground for some wells the extraction rate was as low as 1/3

we have tar sands too, and methane hydrates , they just aren't quite as cheap as oil

coletti · 02-08-2010 5:30pm

Deleted User wrote: »

There is an estimated 40 years left at current consumption rates, the problem is that they can't get it out any quicker. .

There is an estimated 40 years left if (i) No more oil is discovered (ii) We don't become more efficient in the use of oil and (iii) we don't use the oil we have discovered but is currently either more difficult or more expensive to get at.

No one is arguing that we should become more dependant on oil, but we also have to realise that there is a lot of it about, and that it's not running out any time soon.

02-08-2010 8:58pm

coletti wrote: »

There is an estimated 40 years left if (i) No more oil is discovered (ii) We don't become more efficient in the use of oil and (iii) we don't use the oil we have discovered but is currently either more difficult or more expensive to get at.

No one is arguing that we should become more dependant on oil, but we also have to realise that there is a lot of it about, and that it's not running out any time soon.

Good points, but the assumptions that 40 years are based on can't be relied on to be accurate, for starters they assume OPEC countries are truthful about viable reserves, growth in China and India will "eat" into the 40 years.

Future discoveries will tend to be small and difficult/expensive to exploit.

China & India are aggressively buying up any surplus supplies and locking up future supply for themselves. Doing so will mean a diminishing supply available to western countries, meaning the "peak oil effect" will be felt much sooner here, the unstable open market price being an indicator of that already.

Capt'n Midnight · 02-08-2010 9:59pm

coletti wrote: »

There is an estimated 40 years left if (i) No more oil is discovered (ii) We don't become more efficient in the use of oil and (iii) we don't use the oil we have discovered but is currently either more difficult or more expensive to get at.

As you can see relatively little oil was used before 1950

The growth of oil usage through transport is worse than the graph shows since a lot of oil fired power stations changed to gas/coal and doesn't take into account the billion consumers in India and China that will aspire to the same fuel usage as us.

03-08-2010 4:57am

Capt'n Midnight wrote: »

As you can see relatively little oil was used before 1950

The growth of oil usage through transport is worse than the graph shows since a lot of oil fired power stations changed to gas/coal and doesn't take into account the billion consumers in India and China that will aspire to the same fuel usage as us.

That chart clearly shows that "king coal" will regain it's crown for a while, but it doesn't show the energy generated from the coal.
I believe that most of the coal currently mined for power generation is the lower grade brown coal, very dirty hence the spike in CO2.

Recent advances in Gas extraction may allow for more growth for a while as well.

edit: just came across this article http://www.greencarcongress.com/2010/08/peakcoal-20100802.html#more

Study Concludes “Peak Coal” Will Occur Close to 2011
2 August 2010
A multi-Hubbert analysis of coal production by Tadeusz Patzek at The University of Texas at Austin and Gregory Croft at the University of California, Berkeley concludes that the global peak of coal production from existing coalfields will occur close to the year 2011. The HHV of global production is likely to peak in 2011 at 160 EJ/y, and the peak carbon emissions from coal burning will also peak in 2011 at 4.0 Gt C (15 Gt CO2) per year, according to the study.

....

The most important conclusion of this paper is that the peak of global coal production from the existing coalfields is imminent, and coal production from these areas will fall by 50% in the next 40 years. The CO2 emissions from burning this coal will also decline by 50%. Thus, current focus on carbon capture and geological sequestration may be misplaced. Instead, the global community should be devoting its attention to conservation and increasing efficiency of electrical power generation from coal.

Original article (behind paywall for full details)

old_aussie · 03-08-2010 7:33am

Middle class peope in India who can now afford a car will drive demand for oil.

boc123 · 03-08-2010 9:16am

old_aussie wrote: »

Middle class peope in India who can now afford a car will drive demand for oil.

If the supply can't keep up with the demand there is nothing anyone can do.
Price just went over $81 today.

Also received Richard Heinbergs latest Muse letter, quite depressing...

03-08-2010 9:48am

boc123 wrote: »

If the supply can't keep up with the demand there is nothing anyone can do.
Price just went over $81 today.

Also received Richard Heinbergs latest Muse letter, quite depressing...

Price controlled rationing comes into play, for oil sold on the open market.

Most western countries have experienced oil "demand destruction" in recent years, Ireland has dropped 10% since 2006, this trend is likely to continue as alternatives are found or certain tasks are simply ceased! (recession leading to depression)

That's why China and India are being very aggressive in buying (cash or goods up front, I believe) future supplies with countries that the west have difficulty in dealing with, Iran & Venezuela for example.

recedite · 07-08-2010 12:24pm

The oil price rises around 2008, peak production of easy to reach oil around 2007, and the recession/credit crunch are all related IMO.
From now on we are looking at the end of "growth" in the economy. We are into an era of expensive oil. But peak oil extraction in absolute terms can only be determined after it has happened. Just like the market top in house prices. Both depend on how much people are willing to pay.

Peak Oil at 2014?

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