We now have December data for global liquid fuel production, which allows us to see the whole year. What has been striking about 2012 is that oil production has been remarkably flat, with no significant rise across the year (there was a small 0.25mbd/yr trend overall, but that was not statistically significant).
This is in contrast to 2009-2012 when production has generally increased, except for the interruption of the Arab Spring, particularly the loss of Libyan production in early 2011. Instead, 2012 looks more like 2005-2007 when production was pretty much flat, occasioning a huge spike in global oil prices.
If this new 2012 production plateau continues, I would expect prices to rise again. They have otherwise been on a gentle slide since the situation in Libya stabilized in mid 2011:
4 comments:
Stuart,
You have had several posts about production of tight oil at Bakken but I have not seen that you have “high lighted” the flaring of gas connected to the production. What a waste!
http://www.dailymail.co.uk/news/article-2269517/The-picture-space-shows-U-S-oil-field-burning-gas-power-Chicago-AND-Washington-cheaper-selling-it.html#ixzz2JP2tnUbJ
not sure about the prices rises. ok the top barrel is at USD 90+ with tar sands but there is a long way for other types of oil to get there, plus it's mostly Saudi needs for higher budgets (100+) that's driving the price those days through production cuts. mid-term wise I say that in next 2 years output will continue to rise at snail's pace, perhaps a good year in 2013. after Manifa in 2014, due to lack of mega projects to compensate for base declines, everything really rests on the underlying capacity to maintain plateau and how shale oil will deliver. ok the volumes are material but can it last?
as for predicting accurately peak oil, the debate is irrelevant. since field engineers operational reserves computations are within 20% accuracy on average. this means that even if all the countries in the world gathered together to exchange notes and compile a field by field tally based on actual detailed geological modelling the range of uncertainty would still be about 10-20 years.
this is no argument for the sceptics btw, even assuming the famous "2030" deadline, that's a mere 17 years away. mega projects do take 10 years to be engineering and executed. so we're pretty much talking about taking right now dramatic changes to our energy system, when growth from China and India will outstrecth any solution we have and under constraint of global warming.
that's one huge order I say.
The FT also ran with this as a cover story which is nice to see:
http://www.ft.com/intl/cms/s/0/d2d2e83c-6721-11e2-a805-00144feab49a.html#axzz2JVVu3tpK
We still appear to have conflicting studies over whether shale gas can act as a bridge fuel to a low carbon economy (I have strong doubts), but this will add fuel to the fire if you forgive the pun.
On my way home on my bike the other day I was thinking what would be the driver of growth in oil prices and of course new cars in China hit me as the most probable as most people don't have one there although they are over 100 million already and big cities are limiting new cars. In US and Europe cew cars are just replacement for old ones so oil demand does not rise but falls as they get more efficient vehicles. So when China hits 200 million cars in say 5-6 years (maybe 130 milion trucks and buses additional) then they will be where Europe or USA is now and still be growing. With a billion cars on the road globally a 10% increase is not small so over the last few years and the next 5 etiher so that since 2005 peak real oil (not biodiesel and tar sands and deep sea, etc.) such a huge demand increase somewhere means that the next time a supply limit really hits(siberia and Saudi and Shale oil and deep Sea tanked out for example)that it will cause much higher prices and as I read in ASPO article recently about US reserve currency status this could put paid to the post war order of things-meaning real collapse of Superpower status-just when America has 125%-150% debts-now 100%. See this on Moors law:
http://www.indybay.org/newsitems/2012/08/20/18719938.php
"Moore's Law for transistor count is ending, but now there's Moors' Law for oil and it says gasoline -- US national average -- will be $7 in 2017 as oil reaches $120 a barrel. The law is named for Kent Moors, a professor Duquense U. Specifically, the price of oil and the number of cars in China, which drives it, double every 5 years. These prices change everything in society."
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