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Page added on December 16, 2016
Worldwide Oil Demand May Soon Peak
For years, analysts feared the world had reached a peak in the supply of crude oil, and that supplies would begin to diminish rapidly as demand increased, sending prices skyrocketing. This situation is known to analysts as “peak oil.”
Now, as The Christian Science Monitor reports, the opposite phenomenon may be occurring. That is, the world may reach peak demand before it ever gets a chance to hit “peak oil.”
With technology reinventing itself almost daily, transportation alternatives continue to improve. That means, instead of sucking every drop of crude from the earth, we may be able to leave some of it in the ground.
A recent report from the World Energy Council estimated that world petroleum consumption would top out in 2030 and decline thereafter. In the face of declining demand, we may see High Plains producers moving more investment dollars into other sectors, like wind or solar.
16 Comments on "Worldwide Oil Demand May Soon Peak"
geopressure on Fri, 16th Dec 2016 1:09 pm
Did the author of this story not see the US Presidential Election results???
Do they not understand the significance of Trump nominating Rex Tillerson to be the Secretary of State???
rockman on Fri, 16th Dec 2016 5:48 pm
“…that world petroleum consumption would top out in 2030 and decline thereafter.” Or not if it turns out that we are at or at least near global PO now. Consider the lower oil prices that greatly decreased investments in developing new oil reserves. And happening today when existing reserves are currently being depleted at the fastest rate in history.
As far as a shift in transportation fuels: 98% of the 80+ million light vehicles sold in 2016 were ICE’s. So if a significant number of the 1.2 BILLION light ICE light vehicles on the road today are going to be replaced by alt vehicles in 14 years we should be selling a much greater number of alts being sold today, shouldn’t we? After all the govt estimates that vehicles sold this year will run 11 years before being replaced.
And global jet fuel consumption? “Fuel consumption by U.S. airlines is growing at some of the fastest rates for a decade, according to data published by the federal government. U.S. carriers consumed 1.6 billion gallons of fuel in July, up 3.4 percent from the same month a year earlier
(link.reuters.com/qad75w).
Fuel consumption for the first seven months of the year rose nearly 2.9 percent, the biggest increase since 2011 and before that 2005, according to the U.S. Department of Transportation.”
And why is US jet fuel stats significant? The US burns 5X+ the fuel the #2 country, the UK, consumes.
Apneaman on Fri, 16th Dec 2016 9:24 pm
James of megacancer.com pointed out this insightful comment from a fella on Gail’s blog
“JT Roberts says:
December 16, 2016 at 7:55 am
Nice text end almost here.
A lot of people aren’t getting thermodynamic collapse in oil means so to illustrate in 1965 the world was producing 30million barrels a day today the world is producing 90million barrels a day. However the net energy that is left over after production has declined from 50% to 18% so in 1965 we had 15million barrels of usable energy and today we have 16.2million barrels. This is less than 10% gain on a 300% increase in effort. 2017 is projected to increase the decline to 14% net energy for us to just stay flat global production will need to increase by 25million barrels a day that is not going to happen.
Its likely no coincidence that Trump chose Rex Tillerson as Secretary of State. In order the keep the bus on the road more high value net energy has to be brought into the market. US frack oil is 5:1 at the well head where as Middle East is 20-30:1 that oil has to be in the market to slow the net energy decline. Some wrongly conclude supply demand principals will correct the situation with higher prices.
Oil is not likely to increase in price. The net value is the energy it supplies. So each barrel is less valuable then the one the preceded it as the vast majority is consumed by the Oil Industry. The only thing keeping the industry alive is a dramatic build up of debt. Chevron borrowed 18billion last year Exxon 8billion. At the same time they cut all E&P exploration and production. If the price per barrel increases it will gut the global economy.
Another way to look at it is this. At the pump the end user must bear all the cost of the product. So if a producers cost has increased 300% the end user has to pay that increase. The problem is he can’t because the net value is too low to produce profits from the use of it.
For example right now jet fuel is running around $2:50 a gallon. It needs to be $7:50 a gallon to maintain the production. If it was what would happen to air travel? That’s the conundrum. It’s the same with us would we commute 1hr each way to work at $7:50 a gallon. At some point you just quit. This is particularly true for low wage jobs who still make up the vast majority of wage earners.
So the collapse in oil prices is a collapse in business activity that preceded it. Look at all the macro indicators they’re all down. The “glut” is purely a function of the industry to keep cash flow. 1/3 of the frack oil is in bankruptcy but the creditors are making them pump like crazy hoping for a ROI.
Why it’s so hard to understand is because we’ve been lied to our whole life about how economies really work. We’ve been taught that it is all supply and demand. This is a lie. The true pricing mechanism is the cost of production. The cost of production determines if a product can be affordably brought to market. Not demand. If you don’t believe that then why don’t we have super sonic passenger jets anymore? Because no one wants to fly at the speed of sound? Is it because we don’t know how to produce the planes anymore? Or is it that the cost of production of the service exceeded the net value to the customer?
The same will happen to oil.
Here’s the most fascinating bit. The US hit this net energy crises in 1970 when domestic production peaked at 10 million barrels a day. We never recovered. Nixon however did 4 things. One he took the US off the gold standard. By making the US dollar fiat he could increase debt exponentially. This allowed the US to continue to grow without real growth. This is an absolute requirement for Capital economies. Second he opened China for manufacturing. China had untapped energy reserves and abundant labor. In essence the off shoring of manufacturing preserved vital US resources and reduced domestic pollution. Third he created the EPA this imposed a great deal of pressure on industry to produce there products elsewhere like China. As I’ve explained before manufacturing is a lead loss industry so it sells its product at the cost of production or even a loss but the true profits are made by the Banking and Transportation sectors including wholesale retail distribution. Fourth he convinced the Saudis to sell their oil only in US dollars for unlimited military protection. This expanded to the rest of the OPEC nations. This move created the Petro dollar system that artificially created demand for US dollars. Like economic extortion the oil hungry world had no choice but acquire US dollars with real goods and services so they could buy oil. The price of the real goods and services were the cost of production. So incredibly cheap products flooded into the US with absolutely no cost because the US dollar was now a fiat currency. All you had to do is allow your currency to inflate at the same rate as your import export imbalances. So free stuff is flooding in to support this New Consumer Based economy. Americans start believing the more they consume the more there will be to consume. Absolute break from reality.
Here’s the question do we think Nixon was bright enough to have figured all that out? I don’t think so. Trump is at the same inflection point. He has no idea why he is making the decisions he is. But this is the set up for the end. As one geologist states unlike 1970 the world can’t import oil. No one can Make America Great Again. But many will fall for his plan.
This is in today’s headlines about Trump policy.
The main thrust of his approach couldn’t be clearer: abolish all regulations and presidential directives that stand in the way of unrestrained fossil fuel extraction, including commitments made by President Obama in December 2015 under the Paris Climate Agreement.
He has to reverse the decline in EROEI. A way to increase net energy is to remove all pollution controls.”
https://ourfiniteworld.com/2016/12/07/what-has-gone-wrong-with-oil-prices-debt-and-gdp-growth/comment-page-14/#comment-109660
Boat on Fri, 16th Dec 2016 10:01 pm
When oil producers pump more oil than the market needs it takes time for the lowest cost producers to be driven out of the market. That’s what they call rebalancing. It happens in every commodity. It’s how markets work.
Apneaman on Sat, 17th Dec 2016 12:45 am
Boat I thought markets worked by blowing big bubbles that impoverished millions except those at the top who get big bonuses and a taxpayer bailout ?
That housing market POP in 2008, set off a chain reaction and almost ended your precious market system permanently. No bailout no Markets. I can’t recall the number of industries that have been getting bailouts and subsidies and tax breaks in my lifetime. It is all contradictory to the claims of econ 101 and all that, “only the strong survive”, capitalism bullshit.
Economics is a pseudoscience and Capitalism is a secular religion. Whenever shit goes bad you always say “it’s just capitalism” which is the secular equivalent of “god works in mysterious ways” or “god wills it”.
Going to be great fun watching Trump and his cancer crew of oil scum and young earth creationists try and “rebalance” America by gutting the EPA, shutting down climate science, attack alt energy threaten, intimidate and whatever else they can come up with. Seems pretty desperate to me. Over a decade of unleashing Fracpocalypse upon the land and tar sand expansion and they even more desperate then when they started. Got to sprint full out while guzzling Red Bulls to keep up with the Red Queen.
It appears the other tribe is not willing to take it lying down. LMAO
To Carry a Light into Darkness — California Governor Jerry Brown Promises to Fight Like Hell Against Trump’s War on Science
“If Trump turns off the satellites, California will launch its own damn satellite.” — Jerry Brown
“Creating lists of employees smacks of McCarthyism and should cease immediately.” — The Union of Concerned Scientists
“Fear is palpable among U.S. climate scientists over Trump moves” — The Japan Times
“Assaults on science are characteristic of non-democratic, authoritarian, fascist governments. We worry it is going to get worse.” Dr Peter Gleick
“We’ve got more sun than you’ve got oil.” — Jerry Brown”
-Eliminating NASA Funding, Death Threats on Twitter
“Meanwhile, instances of politically motivated threats against climate scientists mounted. Peter Gleick, a hydro-climatologist and co-founder of the Pacific Institute, a nonpartisan think tank, reported to the Japan Times that he received death threats in the form of pictures of guns posted to him after he tweeted critically about threats of violence to scientists made by Brietbart on Twitter.”
https://robertscribbler.com/2016/12/15/to-carry-a-light-in-the-darkness-california-governor-jerry-brown-promises-to-fight-like-hell-against-trumps-war-on-science/
The true believer liberals still think there is a chance to halt the biosphere collapse – wrong. Save their kids and grandkids. They will come to see Trump and Rex and the entire cancer gang as thugs trying to murder their offspring. Self defense and all that. That recent pipeline protest was starting to get pretty rough. With Trump in and the retard conservatives emboldened, I can easily imagine a gang of them showing up at the next big enviro protest armed to the teeth and someone doing something stupid. All that hate anger and division in the US – BOOM!
Think of all the energy spent fighting. Billions and billions on propaganda on both sides. The denial industry is easily a billion a year on it’s own. The untold millions of man hours spent by professionals and many more by the armies of true believers. What’s the EROI for all that I wonder? All the while the seas are rising and that is costing many coastal cities and towns billions in defenses. Longer and more severe wildfire season – towns burning down. Almost half the country in drought. Rain and hail bombs doing major damage infrastructure – more billions. And still half the country including the new POTUS is in denial and thinks he can make America 1965 again by force. Sounds like a plan eh? Good luck.
makati1 on Sat, 17th Dec 2016 2:47 am
If Trump gets his way, he will turn the pollution clock back in America to the days when belching smoke stacks produced smog so thick you could cut it with a knife. I remember those days. Acid rain, rivers running with raw sewage, the sweet smell of plastics, and on and on. All the pollution in China coming back to kill Americans. Not to mention turning up the world’s heat. Go for it!
Cloggie on Sat, 17th Dec 2016 3:24 am
I remember those days. Acid rain, rivers running with raw sewage, the sweet smell of plastics, and on and on.
Interesting, so you implicitly admit that problems like acid rain and dirty rivers were solved, even though temporarily. And now the evil Donald is going to bring back these wrongs.
I’m with you on this one. You can buy wind parks as many as you like from Shell Oil, em I mean Shell Wind.
http://phys.org/news/2016-12-shell-led-consortium-700mw-offshore-dutch.html
So if acid rain and polluted rivers can be solved (and don’t forget the hole in the ozon layer nobody talks about anymore), why can’t climate change (if any) not stopped.
Why not prepare without a rush for the end of the oil age and in the end organize a grand ceremony to thank the oil mayors for that beautiful green planet they delivered us on top of all that happy motoring.
makati1 on Sat, 17th Dec 2016 6:48 am
Cloggie, they were “solved” by sending the polluting industry to China. Not by any other means. When those industries return, if they do, the pollution will return with them and China’s air and water will clear up. There is no easy, quick, techie cure for our situation. It is all down hill.
Davy on Sat, 17th Dec 2016 7:07 am
“China’s air and water will clear up”….HA HA HA HA HA. China is over ecologically as is increaslingly much of Asia.
onlooker on Sat, 17th Dec 2016 8:13 am
Yes,Asia is simply ravenously consuming, decimating, contaminating and depleting all its Nature areas. The effects of its huge population cannot be overestimated.
Boat on Sat, 17th Dec 2016 1:55 pm
Onlooker,
Quit saying bad things about China. They are great because they are not the US. The doomer think tank will have to send you into serious reflective thought programming if you keep it up.
onlooker on Sat, 17th Dec 2016 2:00 pm
Nah, Boat. I am a sooner through and through. A lifelong member haha
onlooker on Sat, 17th Dec 2016 2:01 pm
Doomer not Sooner
GregT on Sat, 17th Dec 2016 2:11 pm
“So if acid rain and polluted rivers can be solved (and don’t forget the hole in the ozon layer nobody talks about anymore), why can’t climate change (if any) not stopped.”
Hole in ozone layer is closing and will be ‘healed’ by 2050, scientists say
http://www.telegraph.co.uk/science/2016/06/30/hole-in-ozone-layer-is-closing-and-will-be-healed-by-2050-scient/
We shall see Cloggie, in about another 35 years, likely long after both you and I are dead and buried. And acid rain has not been solved. I lost an entire pond full of Koi due to acid rain the year before last.
GregT on Sat, 17th Dec 2016 10:21 pm
“Quit saying bad things about China. They are great because they are not the US.”
Difficult to argue with you over that Boat.
joe on Sun, 18th Dec 2016 3:55 am
Its becoming ever more clear that global growth is not what the MSM tells you. The world bank has a nice chart on this.
http://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG
Economic growth and oil growth are not in sync, oil supply has grown more or less in a nice upward line, but global growth is all over the place and trending either flat or a bit down.
http://cdn.oilprice.com/images/tinymce/g3-min13.jpg
So what is going on?
The nature of the dollar to oil is key. As inflation wipes out the value of each and every barrel drilled this ensures that as the purchasing power of each dollar declines then more oil must be pumped and more importantly consumed to get the same value.
https://www.google.ie/search?q=dollar+inflation+history&prmd=inv&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiditTCuP3QAhVFKcAKHUfLCmYQ_AUIBygB#imgrc=SGY6jE0PhLy6WM%3A
We are running faster to stand still. We are forced to consume more and more. But in 2008 that system was disrupted because the banks became disconnected from the requirement just to supply enough money for consumption, instead they became suppliers of their own drug, like a junkie crack addict with their own lab, the outcome is inevitable.
Oil is nothing but a feedstock for the means of the consumption of money, so too much focus on oil in relation to Trump is missing the point. If Trump strengthens the dollar and the Fed raises rates high then its curtains for tight oil. However Trumps election promises forces him to do a reverse Nixon, but to do that Americans need to be willing to go back to work, to stop serving coffee and learn to build engines and use mining equipment, people in cities will suffer badly as their services economy will suffer the most, as old industrial zones reactivate and pollute the air. Do I really think Trump has any idea what hes doing? Not for a second. Oil supply will grow, I accept that, but as inflation wipes out the purchasing power of consumers then demand will slide, as global gpd growth dip and flattens then protectionism and populism will grow because globalisation has stalled. The best lands are used, the best water is used, we are currently at peak child. There is no more world to grow and expand into and people can only absorb so much debt before the system collapses and governments/society is forced to bailout private business and accept their losses.
Going back to a gold backed system now would completely destroy to world as people would horde money under their beds. The system has never really recovered from 2008 and we are due for another serious shock when people realise the current stock market values have no real reason to be where they are.