[Maddog78]

$this->bbcode_second_pass_quote('TheDude', '
')What do the OPEC cuts have to do with a lack of interest in switching to NGVs? Not sure what you're getting at, maddog, unless you just want to gripe about the IEA's motives.

[TheDude]

"Tomorrow" means next year, assuming growth has picked back up post-recession. We all know how that works; some rebound in demand for oil will be there, the BRIC nations are still on a tear, although some reports coming out of China suggest a big bubble in the making - real estate values up 60%, sound familiar? Timing when the price will unquestionably start on an upward trajectory involves a multitude of factors; try this piece from Dave Cohen: The Next Oil Shock.

Notice how US import capacity seems to have shrunk:



I think this was endemic of demand elsewhere drawing away cargoes that could have been brought in last fall to compensate for the shortages post-Ike. Some state governments expressed an interest in investigating this, which is something I'll be looking into.

Short term impacts on the demand side are another factor I've been mulling over - US quotas for ethanol have been growing all the while, and the new CAFE standards will beef up auto mileage no small amount, too. Add 'em up and it will curb US appetite, at least. What's going on in other nations is a whole other ball of wax - how long has European mileage been on an upward trajectory? What kind of mess would we have been in without it, and have they reached the limits of what can be done with high efficiency diesel?

This is quite the complex picture, which is why I don't have time for the likes of Learsy, who was trumpeting the abiotic oil theory a while ago too, because obviously those evil Big Oil guys are keeping a lid on cheap plentiful gasoline for the masses blah blah blah.

[TheDude]

Also, these "spare capacity" figures all have Khurais's full 1.2 mb/d production folded in. The field actually peaks, if I remember correctly, three years from now; also we're entitled to question whether it can perform to its fullest, when the Aramco documentation Simmons quoted in his book says its previous peak was about 150 kb/d.

Even if Khurais performs as advertised the Megaprojects database compiled by the staff at TOD haven't found enough oil to do anything but keep demand/supply extra tight for the next few years:

[Maddog78]

We'll see on China's recovery.
Their market took a nice 6 percent haircut today, so clearly investors are getting nervous about that.
I'm generally pessimistic on a quick and easy recovery.
It's also for this reason that I think any impact from peak oil is several years out.
Demand destruction etc.
One thing is for sure, S.A. was exporting significantly more crude a year ago.
When they see rising prices and can't get back to those levels, it will be worry time.
When every rig is back to drilling with no significant finds or meaningful field development, that will also be worry time.
I also think that is several years out.

[DantesPeak]

$this->bbcode_second_pass_quote('Maddog78', '
')
It's not likely production is going to increase any time soon with demand in the crapper and most of the drilling rigs sitting idle.


$this->bbcode_second_pass_quote('', '
')Does anyone here really believe that output in Nigeria or Venezuela, or even non-OPEC member Mexico, could suddenly increase output tommorow if requested?

[vision-master]

$this->bbcode_second_pass_quote('', '&')quot;Tomorrow" means next year, assuming growth has picked back up post-recession. We all know how that works; some rebound in demand for oil will be there, the BRIC nations are still on a tear, although some reports coming out of China suggest a big bubble in the making - real estate values up 60%, sound familiar? Timing when the price will unquestionably start on an upward trajectory involves a multitude of factors; try this piece from Dave Cohen: The Next Oil Shock.

[Maddog78]

The point now, at this moment in time, is why would any country want to turn open the taps into an already happening glut of oil?

S.A., Kuwait, U.A.E., Iraq, Nigeria, Angola, Venezuela, Russia, Brazil, Canada and probably a few others all have the capability to increase production, maybe not tomorrow but in a medium time frame.
Should the glut end and the price jump, it will happen.
It won't happen tomorrow. Cushing is full. The Chinese have slowed down their buying.
There is too damn much on the market already.

I don't doubt the theory of peak oil. I'm here aren't I?
I'm just saying that for the next few years, it will not be considered relevant to the world at large.

[TheDude]

OK, here's another chart: Growth/Shrinkage in world oil consumption:



Various interpretations suggest themselves. Are we in for a repeat of the early 80s experience? We see a few years of massive contraction there; but 2008 is a relatively minor blip in comparison, more like 1975. Is this recession not proving to have the magnitude of early downturns? Or the price runup just isn't having as deleterious an effect? That would mean, ostensibly, that we'll rebound that much faster. Are we failing to show the political will to conserve like we did in the 80s? The increased CAFE standards will only begin to make themselves really apparent in 2011, after all. A major difference between what's going on now and what happened in the 80s is that VMT has been on the decline for years now, whereas it only briefly slackened in the 80s.

Dunno about your roster of star players, too. For instance the UAE have brought on more than half of what they have scheduled this year, the Zakum expansions. They'll have that less incentive to develop or expand or explore now, with the price in the doldrums.

[americandream]

I submit that the scam will keep ticking along until a rig worker comes running up to the site office with the last dregs of Ghawar at the bottom of his tea cup.

$this->bbcode_second_pass_quote('AirlinePilot', 'W')hat do laid off workers and rigs have to do with the cold hard facts that we were on a plateau of production over the last 4 years with the greatest run up of crude prices in history?

Do you submit that once the very small global blip in demand is restored that production is going to continue to happily climb above where we were last year?

[Maddog78]

$this->bbcode_second_pass_quote('TheDude', '
')Various interpretations suggest themselves. Are we in for a repeat of the early 80s experience? We see a few years of massive contraction there; but 2008 is a relatively minor blip in comparison, more like 1975. Is this recession not proving to have the magnitude of early downturns? Or the price runup just isn't having as deleterious an effect? That would mean, ostensibly, that we'll rebound that much faster. Are we failing to show the political will to conserve like we did in the 80s? The increased CAFE standards will only begin to make themselves really apparent in 2011, after all. A major difference between what's going on now and what happened in the 80s is that VMT has been on the decline for years now, whereas it only briefly slackened in the 80s.

Dunno about your roster of star players, too. For instance the UAE have brought on more than half of what they have scheduled this year, the Zakum expansions. They'll have that less incentive to develop or expand or explore now, with the price in the doldrums.

[Pops]

$this->bbcode_second_pass_quote('TheDude', 'I')s this recession not proving to have the magnitude of early downturns?

[IslandCrow]

Check out this news clip from BBC - it includes part of an interview with Fatih Birol. It only runs for a couple of minutes so it will not take too much of your time.
$this->bbcode_second_pass_quote('', 'T')he International Energy Agency has warned that increasing demand from developing countries will drive fuel prices up in the coming years.
The agency's 2009 World Energy Outlook suggests the economic crisis has cut requirements in the short term, but that the trend will not continue.
Juliana Liu reports.

[Dr. Ofellati]

I think it's perfect that the obvious anagram of this mouthpiece's name is Faith.

[KevO]

we know how much you like anagrams don't we Fellatio?

Copenhagen is not about climate change. It's about Energy and more specifcally oil.
Climate Change is just, 'A Convenient Truth' (untruth?)

[Graeme]

IEA Economist Birol Addresses Reactions to the World Energy Outlook

$this->bbcode_second_pass_quote('', 'L')ast week, Fatih Birol, chief economist for the International Energy Agency, answered questions submitted to the Financial Times by curious readers. Many of the questions concerned the IEA’s most recent World Energy Outlook, which, among other things, outlined a global energy policy meant to stave off catastrophic climate change.

Not surprisingly, Birol was asked by more than one reader to prognosticate on peak oil. In response, he clarified the IEA’s most recent prediction: if there are no new discoveries of oil, global oil production will peak around 2020, but only if demand grows as sharply as expected. More specifically, the IEA anticipates that non-OPEC oil output will peak within the next several years, if it has not already. Oil generated by OPEC countries—which contain huge, low-cost resources—are expected to fill the gap. However, this means that such countries will have to increase their output substantially, which some of them may be unable or unwilling to do. Birol warned that underinvestment in unconventional and alternative fuels could lead to much higher oil prices, placing a heavy burden on the world economy. Thus, lower oil use would not only “contribute to meeting climate-change goals,” but would “enhance energy security and bring about long-term economic benefits.”

[JustaGirl]

oops read it wrong

[KevO]

$this->bbcode_second_pass_quote('', 'I')n World Energy Outlook 2009, the International Energy Agency seems to have dropped a bombshell that has been quietly (and politely) ignored. In their main 'reference scenario', the IEA forecasts that OECD demand has already peaked - it never recovers the levels seen before the oil price spikes and financial crisis unfolded.
In recent editions of their World Energy Outlook, the IEA has been reducing their forecast for 2030 total oil supply. But forecasting a decline in OECD consumption is a radical shift.
It's also significant that in their report they say Non-OPEC oil supply declines from 2010. So all those arguments about technology, increasing recovery, a new Middle East in the Arctic.. all amount to nothing at least in the entire Non-OPEC part of the world where all those clever western oil companies do their business.

All the peak oil analysis that you've read here still suggests that the IEA's forecast is too optimistic, for both OPEC and Non-OPEC parts of the world. And the IEA whistleblower also claims that their forecasts are inflated. But a peak is still a peak, and the IEA now says that OECD oil demand is in decline and will not recover the levels prior to the financial crisis.

This seems to me like a dramatic statement for the IEA to make. This official forecast from the agency representing OECD nations, now conflicts with just about every one of its individual member's own forecasts (and that of just about every private enterprise). To convince decision makers of the inevitable oil decline facing us, we no longer need to refer to the online analysis by peak oil bloggers. You can simply tell your president, chief, boss and your neighbour: The IEA says our oil consumption is going down, what are you going to do about it?
http://www.energybulletin.net/50795

[KevO]

what does this mean EXACTLY in language I can tell Ma and Pa?

Does this mean demand destruction or that we have admission from the IEA of peak oil

RSVP somebody!

[Revi]

I think that the IEA is just projecting a picture of the oil gauge. They tell us how much is left in order to keep all the economists happy. There are lots of ways to reduce demand. A recession is one way. War and trouble may take a few countries off of the teat. Lowering demand through green technology might be another. The price is a big lever. I can't see the OECD countries coming back to their previous consumption any time soon, but they may recover enough to cause trouble once this recession eases a bit.

I saw a graph done by the folks at Uppsala and it looks like the oil tank will be around 65 mbpd by 2030 according to their scenario. That seems like a good approximation.

That means that 8 or 9 billion people will be sharing the amount of oil we had back in the 60's.

It could be done, but it will mean a lot more people living on the edge, and a lot less energy intensive car suburbs around the world.

[rangerone314]

$this->bbcode_second_pass_quote('Revi', 'I') think that the IEA is just projecting a picture of the oil gauge. They tell us how much is left in order to keep all the economists happy. There are lots of ways to reduce demand. A recession is one way. War and trouble may take a few countries off of the teat. Lowering demand through green technology might be another. The price is a big lever. I can't see the OECD countries coming back to their previous consumption any time soon, but they may recover enough to cause trouble once this recession eases a bit.

I saw a graph done by the folks at Uppsala and it looks like the oil tank will be around 65 mbpd by 2030 according to their scenario. That seems like a good approximation.

That means that 8 or 9 billion people will be sharing the amount of oil we had back in the 60's.

It could be done, but it will mean a lot more people living on the edge, and a lot less energy intensive car suburbs around the world.