The IEA is now out with their December liquid fuel stats (later in the month than usual). That lets me update my graphs of oil production with all the latest stats. See above for the short term view since the beginning of 2008. As you can see, it still looks, right now, that Nov 2010 is a new high of monthly liquid fuel production. The IEA revised November up by 300 kbd (thousand barrels/day), and then showed December falling by the same amount. OPEC showed December flat over November.
Here's a slightly longer term view (since 2002) showing the whole "bumpy plateau" era (which began in late 2004). This also includes spot oil prices on the right scale (CPI corrected to Jan 2010 dollars).
The combination of flat or slightly lower production in December with higher prices has bent the price production curve back toward the envelope of the 2005-2008 oil shock:
(It's probably worth emphasizing that the pink oval above is not the result of some precise statistical algorithm, but rather is hand fitted by eye).
It will be interesting to see how prices and production evolve in January.
Did you catch this one from RIGZONE: Rumaila Field Surpasses Production Target by 10%
ReplyDeleteThe pace of activity on Rumaila has built steadily over the past year. A total of 20 new rigs are now mobilized in the field. Over the course of the year, a total of 41 wells have been drilled, 103 workovers completed and 122 kilometers of flowlines laid. Some 10,000 people are currently working on Rumaila, over double the number at the beginning of 2010.
This is from the 11th. Also featured in the WSJ, Bloomberg, etc.
The question is how high the demand is. And remember that they mix in NGL and biofuels, which has a lower net energy returned than Crude Oil.
ReplyDeleteChindia will both continue to grow at extreme rates. Saudi Arabia still has some in the pipeline but most independent estimates put it at about 4 mb/d. Iraq is really the gamechanger. If they see another civil war or anything like that, the entire process will be drawn forward much more quickly.
And also, there's always that 'unknown factor'. Look at, for instance, Tunisia. Most of us, if we had to make a guess, would probably pick a state like Yemen for a overthrow. The fact that Tunisia out of all places can see such a swift revolt shows the power of the sudden change.
Now the movement is spreading across the Arab world. And considering a lot of oil is located there, that adds more danger to the already dangerous energy situation(or oil situation) for Western importers.
And let's not even pretend what happens if Israel goes to war, irregardless against what enemy around it, that will make the oil prices hike up considerably. An Israel/Iran war(which is thankfully becomming less likely but still highly plausable, see the latest Economist piece on this) will completely shatter the entire world economy in ways that will even make most doomers seem moderate.
There's no immidiate rebound from another major, sudden oil shock caused by war or revolution. We are too close to the margin.
I actually think that you may be right on the natural side of the argument. I, too, have issues with the whole Old Testament-style Apocalypse(conveniently all packed in on one day for quite a lot of doomers), but you don't even need a factual decline.
We're already seeing an increasingly worse situation and there will no doubt be more Tunisias around the world. And probably for war, terrorist strikes or a whole host of 'unknown factors' which are impossible to predict are far more likely in an increasingly unstable and unsustainble world(both ecologically and politically).
And if one of these sudden 'unknown factors' comes to the fore and hits oil supply in a serious way(at least relative to our razor-thin margins), then we might see if not a collapse then at least chaos in certain regions around the world. How safe, for instance, is a place like Nigera or Angola? You don't need a lot of disruption to shake the system when you're as close as we are now.
And also, concerning the DB Bank report you previously wrote about, they themselves wrote that the world is getting weaker and weaker when it comes to resistance to high energy prices. It was 11 % in the 70s. It was 7.5 % in 2008. The authors claim that it will now take around 6-6.5 %(depending on the timeframe, early or late in this decade).
The fact that most of our oil comes from very unstable regions should never be discounted. And whenever making predictions, it should be wise to remember that oil supply is also affected by the political and social developments(or declines) in the region around the nation producing the oil. That is why we might still see a 'sudden crash'(but not a Doomsday) but it might well be for other, non-predictable reasons which becomes ever-increasingly probably as we move more and more into a very volatile world.
So peak oil called off, but:
ReplyDeleteWorld needs $100 trillion more credit, says World Economic Forum
And here is "doomerish" Richard Heinberg:
ReplyDeleteLimits to debt
who is right, Heinberg or WEF. I think both...