[pup55]

Last year when the BP review came out, we made a little supply/demand model, and made some assumptions about future conditions, and the offshoot of the whole conversation was that we were pretty much screwed if things kept going like they were.

But, surprisingly, well, not surprisingly, I guess, things did not go exactly like they were, because they couldn't. China's growth in oil consumption was not 9%, it turned out to be only 2.3%. And, the US's growth was about 2% in 2004, but this year it ended up at roughly zero, so to make a long story short, because of this reduction in demand, which you can call demand destruction if you want, Armageddon did not happen, unless of course you are in Zimbabwe or Belarus.

I have bumped up last year's thread for the inspection and entertainment of the forum.

So, I thought it useful to do the same sort of exercise this year and see what happens.

a. Base Scenario: Current Trajectory

Under this assumption, things keep going like they are for both consumption and production. Everybody that grows keeps growing (or shrinking) at the same rate, for both production and consumption.

Here is the outcome:
$this->bbcode_second_pass_quote('', '
') production consumption
2006 82243 83560
2007 83796 84771
2008 85806 86076
2009 88362 87481
2010 91579 88991

[Antimatter]

Don't forget two big f%^k off hurricances playing havok with the oil rigs in the GoM. I wouldn't call that lucky.

I guess the market works and the doomsayers are wrong...again! *climbs in flame suit and runs*

[pup55]

$this->bbcode_second_pass_quote('', ' ')production consumption
2006 82483 84007
2007 84256 85672
2008 86472 87441
2009 89216 89318
2010 92606 91308

[seahorse]

Pup,

As you know, there is some question or at least discussion that light sweet crude oil has peaked. Is there enough information to determine this? If so, is it then possible to graph the demand and production for lighter sweet crude grades and how a peak in light crude grades would effect demand growth?

I guess it seems plausible to me that a peak in light sweet crudes could be the same as peak oil, simply bc there doesn't seem to be enough present refinery capacity for heavier grades as evidenced by the fact that Saudi Arabia can't sell some of their heavier stuff even when demand is at its highest (during the hurricanes for example).

As you know, I don't have the ability to crunch the numbers like you and put together the graphs. If the above is possible, I would hope that someone who has the ability could try to get an answer to this question which has plagued this peak oil issue for at least a year now.

[pup55]

Khebab did the best job of anybody I think in trying to deduce the peak of light sweet, and he thinks it happened in 2004. I will try to unearth his post and put up a link so we can review the calculation.

I cannot tell from the BP data as presented exactly when it was. It doesn't split out the light sweet vs. normal crude.

The above chart might be a clue, though. It's the ratio of refinery throughput to crude oil production since 1980. Early on, the refineries were basically getting 95 barrels of stuff out of production for every 100 barrels of crude oil produced. Nowadays, this has shrunk to maybe 91, which is a pretty significant decline. If the theory is that the lighter and sweeter the crude is, the better the refineries will run, then this suggests that we used the last good stuff quite some time back, and for sure since about 1991 the refinery system globally has been getting increasingly less efficient. Of course, there are plenty of other factors involved in this, so this is a potential topic for some discussion. There were refinery types in the forum for awhile, so maybe they can tell us if this is the case.

At what point did we run out of "light sweet" and start into the heavier stuff? I suppose it's a matter of degree.

[Antimatter]

ENI's oil and gas review has info on crude grades. Handy linky here:

http://www.eni.it/eni/images_static/wogr/pdf/wogr2006_oil_quality.pdf

[pup55]

Thanks, Antimatter, this is quite good.

Looks like "light sweet", as defined specifically in the table, has indeed been dropping gradually since about 2000, and the nasty old "Medium and Sour" is still increasing.

[seahorse]

Is there any good information as to the world's ability to refine oil grades that are not "light" as defined above?

[seahorse]

Its also interesting that it was in the year 2000 that oil prices started rising. Is this a mere coincidence to the decline in light sweet available since 2000?

It seems that trying to understand the problem of peak oil may boil down to trying to determine how dependent the world is on light sweet crude. There seems to be a lot of suggestion that the world economy is based on light sweet crudes.

If the world does not have the ability to refine the heavier grades of oil (that are increasing and SA can't apparently sell), then the heavier grades become irrelevant in the calculation of a world peak oil date. It would mean that world oil peak is determined by the available amount of light sweet, bc without the additional refining capacity for heavier grades, there isn't enough light sweet to match increasing world demand.


***Also, there have been some questions on the US oil imports the grades of crude being put into its SPR. Some have suggested it is heavier crude, not light sweet.

[pup55]

Updated forecast based on recent news items and other current info from the sources below:

Brazil production Growth 5.9%

Trinidad and Tobago levels out at 200 tbpd

Azerbaijan levels out at 1,000 tbpd

Central Africa declines at 5.0%
Norway current production at 2.2 mbpd
Both of these estmates were based on recent posts.


Here is the new forecast:

$this->bbcode_second_pass_quote('', '
') production consumption Gap
2006 81108 83385 2277
2007 82087 84422 2335
2008 83073 85556 2482
2009 84196 86791 2595
2010 85540 88133 2593

[evilgenius]

What would be the impact of a substantial recession in the US? Would the physical structure, lack of alternatives like good public transportation esp out west, mean that for a recession to have an effect on US consumption it would have to be a protracted recession? Something that could alter the public's thinking about mileage, type of vehicle selected, and built in distance, suburban infrastructure.

Those kinds of changes probably could not be brought about before 2010. Many things about the economy could be falling except for gasoline demand. Right now there are too many pickups and suv's being used not as secondary but as primary vehicles. Without the means to easily switch to higher mileage vehicles because recession prevents it we might actually see death grip style numbers in terms of gasoline usage even though the economy is falling apart.

The question I suppose is, would the population figure out enough to at least slow down? Would they elect not to drive when before they would have? Can the rollout of higher speed internet help, or is that just a pipedream of impossible efficiency? What choice of alternatives will the consumer of the near future face in terms of trade offs if every set of options is going to be expensive? In other words isn't it possible that the cheapest individual choice in the time to come might be to stick with high gas usage even though on a macro level the impact of all those small choices would be devastating.

Damn!

[Doly]

$this->bbcode_second_pass_quote('evilgenius', 'W')hat choice of alternatives will the consumer of the near future face in terms of trade offs if every set of options is going to be expensive?

[pup55]

$this->bbcode_second_pass_quote('', 'W')hat would be the impact of a substantial recession in the US?