The future of oil supply

[Ralph]

If that graph was scaled from zero on the vertical it would look a lot flatter than it does.

And if it was semi-log it would LOOK flatter still. Degree of flatness by playing games with the scale is not the point. The point is that Hirsch once defined the plateau as a 4% swing, and noted it back right around the time that reality discredited him.

See that 85, give or take, climbing to 90+? Whaddaya think, 5%+? Almost 6%?

Sorry Robert, back to the salt mines for you.

From the last quarter of 2004 there has been an increase from ~84 million barrels a day to ~90 at the start of 2012. A modest increase compared to the growth in demand

While the definition of peak oil has often changed to accommodate all the things people wanted to jam into it, plateaus when peaks didn't work, kick the can when one claim or another didn't work, peak price instead of production when production continued to increase, there is one thing for certain. The definition doesn't encompass demand.

Peak oil, according to M. King Hubbert's Hubbert peak theory, is the point in time when the maximum rate of petroleum extraction is reached, after which the rate of production is expected to enter terminal decline.

http://en.wikipedia.org/wiki/Peak_oil

[kenneal - lagger]

5.6% increase in 5 years! Let's just hope that the world economy doesn't start growing strongly again any time soon.

Mind you, if the half of the world's population that is growing at 7% - China, India, Brazil - can keep that up for the next 10 years they will have doubled their total consumption of all resources again (they've done it over the last 7 to 10 years already) in that time. Yes, that was from a small base but after a few doublings the size of that base doesn't matter and the result becomes very large.

Those doublings will include their consumption of oil so let's just hope that Ralph's friends in the oil industry can keep pace. If they can't the price will sky rocket for a very short while taking us all back into recession again. That is the danger.

Eventually, as each recession gets worse, we will have a recession which doesn't end. That's if we rely on the oil which Ralph and his colleagues tell us not to worry about. If we heed the warnings that we have already had - 1970's, 2008 and probably a few others in between - and start to move away from hydrocarbons now we might stand a chance of reaching the steady state economy that the majority of the world's population needs. Growth is only required by those few, sadly sick, individuals (the 1%?) who don't know what "enough" means and by *ankers and economists.

[AndySir]

Hasn't peak oil happened, though? It was that nice light, sweet crude that we were worried about and that does appear to have gone. Now oil is fairly stable at $100 and the effect seems to be the 'greater depression' scenario that we used to talk about as strong commodity prices hamper growth. I'm quite happy saying that we're post-peak oil, but I mean post-peak North Sea etc.

[SleeperService]

@kenneal, not all economists believe the fallacy of infinite growth from finite resources but their opinion gets shouted down by the rest. However there is evidence to suggest that, for the Western World, the recession that never ends, may be very close. The economy is taking longer to recover from each one, (rather like the elderly who succumb to a series of illnesses rather than a single incident,) while the interval between them stays about the same. It's 5.5 years since the sub-prime mortgage led recession and, for the bottom 80% earning less than £42K, the standard of living is still below what it was. With 0.5% interest rates and several 'redefinitions' of 'in work' and 'unemployed' things fail to change.

@AndySir For the Western World I agree with you, no matter what the Industry says the effects of PO are here, now.

My take is that the Big Shift has occurred in the UK already and our recession is terminal. The current 'recovery' is being fueled by consumer debt, reckless lending is creeping back in to feed this, and the UK Debt burden is increasing. We are on a down spiral now which won't be smooth, the danger is that the level patches or slight bumps will be seen as 'The End of the Recession' and counter-productive decisions will get made. Looking back there is an 'economic event' every tens years or thereabouts, we'd need a Hell of a recovery to get back to where we were in 2007 in the next 4.5 years!!

[adam2]

Hasn't peak oil happened, though? It was that nice light, sweet crude that we were worried about and that does appear to have gone. Now oil is fairly stable at $100 and the effect seems to be the 'greater depression' scenario that we used to talk about as strong commodity prices hamper growth. I'm quite happy saying that we're post-peak oil, but I mean post-peak North Sea etc.

It seems beyond doubt that that production of "nice, light, sweet crude " has already peaked.

What is less clear is total liquid hydrocarbons as there is more than one definition.
There are also no reliable figures available for NET hydrocarbon production. I suspect that some technologies have a negative or only slightly positive EROEI.
It might make economic sense to use oil powered machinery to fracture for natural gas, and then burn the resultant natural gas to extract and process oil shale, but what is the energy return like ?

[RenewableCandy]

It doesn't believe in EROEI.

I mean, I could investigate the money content of every sofa on the planet (including, of course, Sofas Yet To Be Found) if I were given enough energy to start with...

[emordnilap]

My take is that the Big Shift has occurred in the UK already and our recession is terminal. The current 'recovery' is being fueled by consumer debt, reckless lending is creeping back in to feed this, and the UK Debt burden is increasing. We are on a down spiral now which won't be smooth, the danger is that the level patches or slight bumps will be seen as 'The End of the Recession' and counter-productive decisions will get made. Looking back there is an 'economic event' every tens years or thereabouts, we'd need a Hell of a recovery to get back to where we were in 2007 in the next 4.5 years!!

Not just the UK - here in Ireland, exactly the same is happening. It looks likely that we'll go through several of these boom-and-busts, over ever-shorter intervals, before any alternative strategies are seriously considered. Everything else follows the hockey-stick, why not booms-and-busts?

But we're alright jack. Look at Greece, Spain etc and the unemployment rates in the Balkans.

[vtsnowedin]

I see on the news ticker (Fox) that BP has made a strike in a well in the GOM. It is in 4900 feet of water and no indication of how rich a find as of yet. It might balance out some declines elsewhere.

[biffvernon]

Yeah, all they've said about the find is that it is 'significant'. I don't think that means that peak-oil has been cancelled.

[emordnilap]

Maybe we'll know how <irony_alert>rich</F--k_it> it is when it starts leaking, or perhaps when it explodes.

[PS_RalphW]

I have never heard of a oil discovery being widely reported in the media where they gave no indication (however inaccurate) of the size of the discovery. This was nothing but a piece of PR fluff that they put out to balance the $1bn write-off of a dry
well in the Brazillian deep water that was last year's refutation to peak oil.

I am amazed that the media universally reported the non-event in preference to the real bad news (from the BAU perspective).

[kenneal - lagger]

No doubt Ralph/RGR will shortly tell us how significant it is.

[boisdevie]

I am amazed that the media universally reported the non-event in preference to the real bad news (from the BAU perspective).

I discovered a can of oil in my barn just the other day. I'm waiting for the media to descent on me and then announce the discovery of a new oil field.

We're shafted but the media are unwilling/unable/simply too stupid to tell the truth.

[kenneal - lagger]

........... We're shafted but the media are unwilling/unable/simply too stupid to tell the truth.

They don't want to knock their advertising revenue by putting anyone off buying useless "stuff" in the future.

[Ralph]

5.6% increase in 5 years! Let's just hope that the world economy doesn't start growing strongly again any time soon.

So now you are depending on the known fact of inelasticity between GDP and increased liquid fuels production? Awful economic of you…me…I think the GDP can grow all it wants, and folks will learn what Americans have…you can use less, drive even more, and it will cost less if you give up the stupid personal transport choices.

Those doublings will include their consumption of oil so let's just hope that Ralph's friends in the oil industry can keep pace. If they can't the price will sky rocket for a very short while taking us all back into recession again. That is the danger.

Oh, don't let your doublings stop with oil. Let in the windmill doublings, the ethanol doublings, solar doublings, nuke doublings, and all of a sudden…worrying about energy appears to be the least of the worries faced by the economies of the world.

Albert was right, and he was right about far more than just oil.

Eventually, as each recession gets worse, we will have a recession which doesn't end. That's if we rely on the oil which Ralph and his colleagues tell us not to worry about.

Ralph and his colleagues say sure as HELL worry about oil. Did you even take the time to look up what the real price path used by the EIA is nowadays? Don't know about you, but when these folks are calling for scenarios stretching above $200/bbl, seems to me like they can hardly be lumped in the free and clear crowd, they are already in Simmons "gee I lost the bet right after I lost my mind" crowd.