The IEA Oil Market Report came out today, and confirmed what OPEC said on Friday: global liquid fuel production reached a new high in February, notwithstanding the turmoil in the Middle East. The graph above shows the three main public sources of "all liquids" fuel production, along with the spot prices on the right hand axis (though be aware that this is WTI spot prices, which have been anomalous lately).
Just focussing on the last few years, the picture looks like this, showing the way in which current production has now comfortably surpassed the previous peak in 2008.
It's worth noting that "all liquids", which is the best documented global oil production series, includes minority components like biofuels, syncrude from tar-sands, and natural gas liquids (with molecular weights all the way down to propane). More conservative definitions of oil like crude-plus-condensate (C&C) have not yet passed the 2008 peak (but the data are several months behind the all liquids data, and I think it's likely the C&C signal will also reach new highs once the data is available).
Here is the price/production plot I usually put up each month:
This shows the regime change from the pre-2004 era to the post 2005 era when oil supply has become much less elastic as the world has had very little spare capacity. (Note that the recent months would look less outside the 2005-2008 envelope if it wasn't for the aforementioned WTI-Brent anomaly).
Will 90 mbpd be crossed? Any bets? :-)
ReplyDeleteAny bets? I bet yes...
ReplyDeleteIf it does it won't be for long.
ReplyDeleteOk John,
ReplyDeletewrite me at ac.a@czechglobe.cz so we can arrange the bet...
According to Bob Hirsch the peak will be somewhere between 2012-2015. Skrebowski says 2012 or 2014, depending on how things happen.
ReplyDeleteEither case, as Stuart has observed, this is all liquids. I think that if you adjust for energy efficiency you'll get a far more smoother plateau.
But people tend to underestimate the geopolitical events that inevitably happen in the wake of high energy(and correspondingly, food) prices.
I doubt that the Arab revolutions could have happened without major discontect on higher prices of living. This, coupled with the youth bulge, has spurred the rightous grievances which were there for decades.
It'll also be interesting to see how the Japanese situation affects the world. Reconstruction requires a lot of energy, and that will be a lot of fossil fuels as the nuclear capacity is down.
Japan could also default or at the very least become the new Greece as they are simply running out of money.
Peak Oil is increasingly becomming a more and more minor player in the events shaping the world in the coming years. It's there as a fundamental issue, but a whole host of other issues will increasingly capture our attention, especially political upheaval in the wake of resource scarcity. Not just in the MENA or other downtrodden areas of the globe.