When will we know that we have peaked?

by **smiley** » Tue 28 Jun 2005, 16:30:14

In another thread I’ve been looking at the production of Mexico and the giant Cantarell field (2.3 mbd) for a while. This week the EIA has confirmed that the field and thus the whole of Mexico has peaked in 2004. IMO this is potentially the biggest news of the year. The no. 2 supplier of oil to the US has peaked.

But I find interesting is the way this has been reported over time. I have collected some quotes from the different IEA reports.

June 2002

$this->bbcode_second_pass_quote('', ' ')Mexican crude oil production is projected to peak at 4.1 mb/d around 2010. Production will remain flat for about a decade, and then decline sharply, reaching 2.7 mb/d in 2030. New discoveries will not compensate for the decline in production from the large mature fields, such as Cantarell. Net exports of crude oil and products are expected to decline even more quickly than production, as domestic demand will continue to grow. By the third decade of the Outlook period, Mexico will become a net
importer of crude oil (Figure 4.14).

by **PhilBiker** » Tue 28 Jun 2005, 16:37:40

Thanks a lot for the analysis, smiley! Great work, very interesting!

by **strider3700** » Tue 28 Jun 2005, 17:39:37

The problem is it's very very hard to hide something like the production numbers of oil. It's watched like a hawk by millions of investors. So What you could do is have "temporary" declines that are preannounced because you're working on infrastructure or something but anything other then that usually is a giveaway that something is up.

About all that you can easily lie about is the amount in the ground. I'm still not sure why the CEO's aren't strung up when they make these massive insane comments about reserves that then prove to be amazingly hopeful guesses at best, outright lies at worst.

by **Leanan** » Tue 28 Jun 2005, 18:25:32

Good work, and good point.

Interesting that it was projected to peak in 2010. Unbridled optimism? Marketing B.S.? Or a flaw in the understanding of decline?

Simmons says that when you use high-tech methods to extract oil, the decline is much sharper. Also, that the total amount of oil extracted is actually reduced. He claims that this was a surprise to the experts. (Indeed, this is still controversial. Many oil industry types insist that high-tech methods increase, not decrease, the total amount of oil extracted.)

It does seem that when information is known, decline is usually sharper and earlier than predicted.

by **bruin** » Tue 28 Jun 2005, 18:42:02

I can't believe Mexico isn't getting a ton of attention either. This is much bigger news then what China is up to right now for the USA.

We get about equal amounts of oil from Saudi Arabia as we do Mexico.

by **MicroHydro** » Tue 28 Jun 2005, 19:57:05

$this->bbcode_second_pass_quote('bruin', 'I') can't believe Mexico isn't getting a ton of attention either. This is much bigger news then what China is up to right now for the USA.

We get about equal amounts of oil from Saudi Arabia as we do Mexico.

by **pup55** » Tue 28 Jun 2005, 20:12:51

Maybe someone motivated will start to track the statements of the OPEC oil ministers in the same way.

Then when we get the surprise, we will be able to look back and see the turning point.

For now, when they start saying stuff like "unexplained technical difficulties" you can start being suspicious.

Come to think of it, that's what they are saying about iraq right now.....

by MD » Tue 28 Jun 2005, 23:40:57

An excellent popst that deserves a lot of attention.
Demonstrates IEA lack of credibility and tendency to the optimistic.

by **Eli** » Wed 29 Jun 2005, 00:25:35

Well the signs are already there that SA may be in decline right now.

The oil that SA has brought to market is heavy sour crude not light sweet crude. The current thinking is that they are going to be the ones that ramp up production to double what their numbers are now. That being the case you'd think they could increase their light sweet crude production by 1.5 mbd but they can't.

They can't produce more than they are now and their oil ministers are walking around saying crazy things like "SA has enough oil for the world for a hundred years" that is just an insane delusional statement. The more they say "we have got plenty of oil" the closer they are to running out and going into decline. Ten years ago everyone knew SA had tons of Oil now people are not so sure.

by **strider3700** » Wed 29 Jun 2005, 02:01:35

enough oil for the entire world for 100 years eh?

so assuming 0 growth, lets just say it's 84,000,000 barrels/day each day for the next 100 years

thats 3,066,000,000,000 or just over 3 trillion barrels of oil still in the ground. at $50/barrel thats 150 trillion dollars worth of oil in the ground. thats about 3 years worth of the entire worlds GDP. anyways spread over 100 years that is saudi arabia making 1.5 trillion in oil sales each year. so since the states buys 1/4 of the oil on the market at the moment that means they will be giving SA 375 billion yearly for the next 100 years. The US spends 370 billion each year on the military.

If the saudi aren't lying they will be liberated in short order.

as an aside why doesn't the cia facts page
http://www.cia.gov/cia/publications/fac ... os/us.html
have data on oil imports and exports from the states?

by **Zentric** » Wed 29 Jun 2005, 02:24:55

I can see the powers morphing this mostly-geological event of oil depletion into a political/economic crisis. The reason for our troubles will never be about the world running out of plentiful oil. Instead, it'll be about this hurricane, or that oil refinery, or despicable haters of our freedom who menace our production or shipping routes. And it would be those very same haters of freedom who we'd pursue, putting us back into a foreign conquest mode - as alluded to in MicroHydro's talking point.

You know, since oil shortages are all but inevitable, why wouldn't the powers (e.g. attendees of Cheney's Energy Taskforce) have free rein to do whatever they want with the supply of energy?

What's the cooperation for without the reward?

Just ramblings, I'm afraid :wink:

.

by **Battle_Scarred_Galactico** » Wed 29 Jun 2005, 06:46:07

Great thread, a good indication of things to come I think.

by **smiley** » Wed 29 Jun 2005, 19:46:42

$this->bbcode_second_pass_quote('', 'M')aybe someone motivated will start to track the statements of the OPEC oil ministers in the same way.

Then when we get the surprise, we will be able to look back and see the turning point.

by **pup55** » Wed 29 Jun 2005, 20:52:41

You're probably right.

Instead, maybe there should be a counter someplace that keeps track of how many times OPEC announces that it is going to raise its production by 500,000 bpd.

by **Doly** » Thu 30 Jun 2005, 05:24:58

According to that theory, we must be peaking pretty much now.

by **Sys1** » Thu 30 Jun 2005, 05:51:21

Those events suit well to Olduvai theory.

by **smiley** » Mon 04 Jul 2005, 14:52:04

I find it pretty amazing that this news did not receive any attention at all in the media. Everyone is looking at the US oil stocks with a magnifying glass, but when one of the main suppliers to the US peaks it does not register at all.

Even Campbell did not mention it in his newsletter, even though he received much criticism on calling the peak on Mexico. This is his chance to pay them back.

by **AdamB** » Fri 22 Aug 2025, 20:00:57

$this->bbcode_second_pass_quote('Leanan', 'G')ood work, and good point.

Interesting that it was projected to peak in 2010. Unbridled optimism? Marketing B.S.? Or a flaw in the understanding of decline?

When will we know that we have peaked?

When will we know that we have peaked?

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