[ROCKMAN]

dashster - Why do you care when people talk about not caring about the peak of conventional oil? If you don't care about us just ignore the discussion. LOL.

[dashster]

$this->bbcode_second_pass_quote('ROCKMAN', 'd')ashster - Why do you care when people talk about not caring about the peak of conventional oil? If you don't care about us just ignore the discussion. LOL.

[Pops]

All politics is local, all economics is kitchen table and all oil peaks will likewise be personal.

When I lived in the central valley of california in the late '90s and early 00s there was a phase of real estate build out known as "drive to qualify." The upshot was that as housing prices escalated in the San Francisco bay area people who were unable to qualify for a mortgage drove east into the valley where home prices were lower, they bought there and commuted to work in the bay area. Of course the unaffordability progressed eastward as well and some people moved every couple of years to capture the appreciation. As their home values escalated, they cashed out and bought larger and larger homes farther and farther away from work: 80-100 miles one way commutes were fairly common.

Then fuel prices doubled and doubled again and people were caught in a trap where they had to drive to make the mortgage but driving was too expensive. Now, there were obviously other things going on, the equity appreciation they had been told was a permanent feature turned out to be a bug; many were lied to and in turn lied back regarding their qualifications and all the rest. But the upshot was, when the price to drive shot up too fast to adapt, in a month or two they were done for.

Those folks have lost all of their equity in addition to all the loses in their other assets. I have a relative who owned several rentals and a nice house who is utterly grateful to have finally been able to get out from under and now have a mortgage on a trailer in a park that he pays out of his social security check. People want to say that the crash had nothing to do with oil but I know that to be wrong in the valley, around particular kitchen tables.

Which is why the particulars are important. Cornies like to bold-all-cap-itallic-colored-font: Look, new record! Well of course there is a new record, there has to be a new record, that's the way constant growth works. It's like breathing, each next breath isn't remarkable, it's when the next breath doesn't come that is remarkable.

Which for those interested is why the definitions do matter. Obviously it is an avocation, I'm interested, curious, it's like watching history, really.

[ralfy]

$this->bbcode_second_pass_quote('dashster', 'B')ased on the graphs on the current front page news article:

http://peakoil.com/production/eia-world ... ion-update

It doesn't seem that conventional crude production could have peaked in 2005 as Stephen Kopits said. The earliest would be 2008, as that was higher than 2005 and there appears to be no gain in tar sands or shale oil during 2008.

[ROCKMAN]

Dashter - Oh my Dog! End your conversation? LOL. You obviously haven't followed my thousands of posts. Just ask any of our cohorts here if I shouldn't be nominated for "Posting Diarrhea of the Year" award. LOL. I've been known to post to old threads just to bring them back to life. Perhaps you misunderstood my post and took some disagreement or challenge as an effort to shut you down. If you followed my posts for any amount of time you would seen me chastise some of our folks for going after other folks just as you described. Just the other day I posted a slight admonishment about the way my pal Plant was being. Not that I don't agree with some (of more then few) of his or Nony's posts they and others add to our colorful tapestry here IMHO.

[vtsnowedin]

$this->bbcode_second_pass_quote('Pops', 'A')ll politics is local, all economics is kitchen table and all oil peaks will likewise be personal.



Then fuel prices doubled and doubled again and people were caught in a trap where they had to drive to make the mortgage but driving was too expensive. Now, there were obviously other things going on, the equity appreciation they had been told was a permanent feature turned out to be a bug; many were lied to and in turn lied back regarding their qualifications and all the rest. But the upshot was, when the price to drive shot up too fast to adapt, in a month or two they were done for.

Those folks have lost all of their equity in addition to all the loses in their other assets. I have a relative who owned several rentals and a nice house who is utterly grateful to have finally been able to get out from under and now have a mortgage on a trailer in a park that he pays out of his social security check. People want to say that the crash had nothing to do with oil but I know that to be wrong in the valley, around particular kitchen tables.

.

[dashster]

$this->bbcode_second_pass_quote('ralfy', '')$this->bbcode_second_pass_quote('dashster', 'B')ased on the graphs on the current front page news article:

http://peakoil.com/production/eia-world ... ion-update

It doesn't seem that conventional crude production could have peaked in 2005 as Stephen Kopits said. The earliest would be 2008, as that was higher than 2005 and there appears to be no gain in tar sands or shale oil during 2008.

[ralfy]

$this->bbcode_second_pass_quote('dashster', '
')
A yearly average peak? From that graph it doesn't look like 2005 would be a candidate for that either. I have been telling people that 2005 was the peak in conventional oil based on what Kopits said in his presentation, but it doesn't appear that could possibly be right. That graph you linked to shows 2011 as the peak to date.

[ROCKMAN]

OK folks...let's get to what's really important for 99% of the global population. It isn't how much "convention oil", shale oil. Biooil, McDonald's grease trap oil, or tar sand crap is produced. The "world" doesn't buy any of that. It buys refined products and virtually only a very few of them really care what is was made from. So: according the EIA the world consumed 84.12 million bbls of refined products in 2005. And that volume increased year to 2012 when it consumed 89.43 million bbls per day. Regardless of what may or may have not peaked in 2005 global the production of refined hydrocarbons has not peaked as of the latest stats in 2012. Other then a very few of us here no one is involved in the buying or selling of "oil". But everyone one here buys refined products and that's what is critical to their lives.

The EIA, the IEA, US gov't, ExxonMobil, etc. can change the various definitions of one type of liquid hydrocarbon or change the source definition. But no one has changed the definition of gasoline, diesel, jet fuel, etc. The would is producing and consuming more refined hydrocarbons today the ever before. Perhaps it might be useful to focus as much on PLH as PO. For the most part the world doesn't run on crude oil...it runs of refinery products.

[dashster]

$this->bbcode_second_pass_quote('ralfy', '')$this->bbcode_second_pass_quote('dashster', '
')
A yearly average peak? From that graph it doesn't look like 2005 would be a candidate for that either. I have been telling people that 2005 was the peak in conventional oil based on what Kopits said in his presentation, but it doesn't appear that could possibly be right. That graph you linked to shows 2011 as the peak to date.

[JV153]

Worldwide crude oil production peaked in 2005.. hrmmmm.. and oil consumption in Asian and Middle Eastern countries soars:
http://www.indexmundi.com/energy.aspx?c ... onsumption
http://www.indexmundi.com/energy.aspx?c ... onsumption
http://www.indexmundi.com/energy.aspx?c ... onsumption
http://www.indexmundi.com/energy.aspx?c ... onsumption
http://www.indexmundi.com/energy.aspx?c ... onsumption
http://www.indexmundi.com/energy.aspx?c ... onsumption
http://www.indexmundi.com/energy.aspx?c ... onsumption

[Pops]

The explanation of Kopits graph is right on the slide, he is pointing to "conventional" oil, not tar sands mining or LTO fracking or natural gas liquids condensing. Conventional oil is the stuff the industry is built around with the other stuff overlooked or passed over or flared as waste - until now when all of a sudden it has been Discovered! LOL

Notice that on Matt's chart the volume is 73mmb/d, he is only counting conventional crude oil except for the US LTO, which he calls out.

The point isn't that you can't make stuff with those "liquids" - of course you can. The point is that pretty well as expected, the resource formerly known as crude oil peaked or at least plateaued right on schedule. Because of that the market now is limited by supply where in the past it was limited by demand.

Early on this board the question was "Yeahbut, what happens when demand outstrips supply?"* We now know what happens:
first) the price rises because try as they might no one can open the valve any wider,
second) demand begins to fall
- this is where the market shifts from demand constrained to supply constrained
third) exploration budgets rise
fourth) upon finding no new conventional oil we start burning the less desirable stuff like tar sands and the light oil/condensate/NGPL we had saved for making other stuff, IOW we start burning the furniture.

To clarify (or maybe confuse further) here is a picture of what the boom is all about.




Condensate and the light oil are selling as a substantial discount because they aren't as useful to the refiners as their equipment is currently set up. The same article in the WSJ where I got that chart has the refiners whining because the drillers are mixing in so much cheap condensate with crude to get a better price.

My question is, why don't the US refiners simply switch over their equipment to refine the lighter oil and take advantage of the lower price instead of sitting on their hands waiting for the drillers to build heater/crackers to export it?

I'd answer by saying if the fracking boom is to be a sea change rather than a bubble, they would. Just like the drillers in ND would sign up to a pipeline to save transport costs in the long run - if they thought there was going to be a long run.


*I just searched and found 68 mentions of "demand outstrips supply" on PO.com mostly back before '07 when it did. LOL

[ROCKMAN]

JV - "...and oil consumption in Asian and Middle Eastern countries soars". And this is the point I'm beginning to focus on: the consumers don't consume oil...they consume refined products...mostly motor fuel. Since 2005 the world has consumed more gasoline then ever before. The same is true for diesel. In fact, according to the EIA, in 2013 the world's consumption of gasoline, diesel fuel, jet fuel, heating oil, and other petroleum products reached a record high of 88.9 million barrels. So maybe convention crude oil might have peaked in 2005. Maybe not. But since consumers buy refined products and not conventional crude oil is that the critical question? However the industry is doing it we're meeting the world's demand for more energy. But that energy is costing a lot more today then in 2005. It might happen in the next few years but at the moment refined petroleum product production has yet to peak.

[Pops]

Of course the consumer doesn't care, if you want to know what the consumer cares about change your bookmark to GasBuddy.com, you'll have lots more free time, LOL

Neither does he care that he's spent trillions to enable EXXON et al to drill overseas or additional trillions to keep the King in power in the KSA and other of our oil "provinces." And more importantly, many many trillions to preserve our non-negotiable way of life. Does that mean the underlying facts aren't relevant?

If you aren't willing to negotiate then you take what is handed to you.

As far as product supply increasing that isn't news, that's is BAU. It would be pretty surprising if the things counted as "liquid Fuels" increased and the volume of "product" didn't.

The thing surprising is how easily the consumer was convinced that the peak of conventional oil wasn't a bug, it was a feature.

[ralfy]

Also, from "Commentary: Interview with Steve Kopits":

$this->bbcode_second_pass_quote('', 'P')eak oil does not occur when we run out of oil. Peak oil occurs when the marginal consumer is no longer willing to pay the cost of extracting and processing the marginal barrel of oil. And we can actually calculate what the related numbers are.

[JV153]

$this->bbcode_second_pass_quote('ROCKMAN', 'J')V - "...and oil consumption in Asian and Middle Eastern countries soars". And this is the point I'm beginning to focus on: the consumers don't consume oil...they consume refined products...mostly motor fuel. Since 2005 the world has consumed more gasoline then ever before. The same is true for diesel. In fact, according to the EIA, in 2013 the world's consumption of gasoline, diesel fuel, jet fuel, heating oil, and other petroleum products reached a record high of 88.9 million barrels. So maybe convention crude oil might have peaked in 2005. Maybe not. But since consumers buy refined products and not conventional crude oil is that the critical question? However the industry is doing it we're meeting the world's demand for more energy. But that energy is costing a lot more today then in 2005. It might happen in the next few years but at the moment refined petroleum product production has yet to peak.

[ROCKMAN]

JV - Not annoyed at all. Very rarely ever am annoyed by anyone here. It's why I use so many LOL's so folks don't read any unintended harshness in my words. I had no problem with your post...facts are facts and always prefer them over opinions. My latest soapbox has to do with folks downplaying the quality of the production from the shale trends. So instead of chasing our tales over what gravity this condensate is or what the yield of that particular oil is, it occurred to me to just look at the bottom line: regardless of what's coming put of the well heads let's just look at what's really important: the products that actually enable the global economies to function. To be honest I had expected refined products would have peaked some time ago for a variety of reasons. But they haven't. And not just surprised because we are cracking more unconventional production but more so with the increased costs. The world certainly isn't in great shape but considering the world is spending so much more for refined products then ever before conditions aren't as bad as many had predicted not that long ago. And those predictions seemed reasonable to me at the time.

[Pops]

Where did you find that ROCK?
Not that I think you are fibbing but I can't find any product numbers on EIA international stats past 2012.

[dashster]

$this->bbcode_second_pass_quote('ROCKMAN', 'V')ery rarely ever am annoyed by anyone here. It's why I use so many LOL's so folks don't read any unintended harshness in my words.