Yesterday, OPEC reported a decent sized increase in oil production, and today the International Energy Agency concurs. The chart above shows all three major agencies that report public data for global liquid fuel production, with the data since the beginning of 2008. Interestingly, we are now within a few hundred thousand barrels/day of the all-time peak in July 2008. I pointed out back in the spring that it was logically possible we could exceed that peak if the demand was there. At this point, one good monthly increase could put us over that level.
Of course, it's not altogether clear whether the demand will be there. The incoming economic news flow is not too encouraging, with Ireland on the brink of default, and the G-20 leaders in disarray. And oil prices are on the upswing again, though a lot of that is really due to currency movements.
Anyway, here is the longer context since 2002, showing the whole "bumpy plateau" period since 2005.
One interesting sidenote is that the EIA reported a very downbeat preliminary estimate for August. We'll have to see if that gets revised away, or they are about to become the lowest estimate for a while.
As we've discussed before, "total oil supply" includes natural gas plant liquids as well as "other liquids", which includes ethanol and other biofuels. This means there is some double-counting with this metric. (Petroleum, in the form of diesel, is consumed as part of the ethanol production process. Then the ethanol quantity is counted also.) August EIA data indicate about 8.4 mbd of total oil supply was natural gas plant liquids. This means probably about 2 mbd was ethanol and other biofuels. If (as?) the portion of biofuels in total oil supply grows, differences year over year of the order of thousands of bbl/mo become less meaningful because the metric is in a sense contaminated with bifuels.
ReplyDeleteAt the same time, oil is creeping up in price... It looks like $100 a barrel will be reality sometime in the next few years.
ReplyDeleteIn regards to what Mike says, I think conventional is past peak but when adding in everything else we might still be before the peak. Ultimately, though, I think the precise timing of the peak is less important than oil prices being high and continually creeping up. The local peak back in 2008 was impressive but in the context of $135 oil, it was too little too late. The stock market crashed soon after, even if energy was only a fraction of the cause it still is no joke.
Things have changed, but have they changed so much that we can continue to have a working economy when oil goes up over $100 a barrel? Everything is still fragile, unemployment is still high, for all the happy talk we are still in deep doo-doo. Peak or not, it's not pretty.
Tar sands, oil shale, and coal are waiting to fill the peak oil void. Then "Fire will come down from God, out of heaven and devour the lambs." So much for the grandkids.
ReplyDeleteGiven the accuracy of reporting and lack of verification, fluctuations of a couple million barrels are statistical noise and within the margin of error, aren't they? I'm asking honestly...
ReplyDeleteMr Sunshine:
ReplyDeleteNo, I don't think it's that bad. There's only 2mbd from the top to the bottom of oil production in the great recession, and no question that's a real effect. I also think the stagnation this year is a real thing (given that all agencies agree on it more-or-less).
Now, if the EIA also comes up with an increase in October, I'd be strongly inclined to suspect that oil production really did increase in October. However, whether that's just a transient blip, to be reversed in coming months, or whether it represents the beginning of a new upward trend, is very much an open question I think.