[TheDude]

I don't think historic examples are entirely predictive in our case, but at any rate it is impressive how short term breaks in supply hampered production levels for very long spans of time. Imagine what never-ending YOY declines worldwide would entail.

As usual, don't forget the low-hanging fruit of the early 80s: easy gains in vehicle efficiency and the shift away from oil to NG for electrical production. An ad hoc crash program to shift to alternatives won't necessarily be as simple to implement, and rationing is a very likely possibility.

The link between GDP and VMT is much closer and more instructive. Here's a graph of vehicles in the US juxtaposed with number of commuters still driving solo, and the total HEV sales in the US to date (592k):



As you can see the bar for the HEV sales doesn't even register thick enough to display the proper color. HEVs won't be the only attempted form of mitigation of course, although they're almost universally viewed as such, and as I stated above, GDP still is largely correlated with VMT, meaning driving to stores.

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('TonyPrep', '')$this->bbcode_second_pass_quote('yesplease', 'H')ow can it give a false impression?

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', 'I')f we take some interval/data to measure an average of, and every point between the starting and ending points has a greater value associated with it, then the average consumption will be higher, in this case much higher, than the starting/ending values.

[yesplease]

$this->bbcode_second_pass_quote('TheDude', 'I') don't think historic examples are entirely predictive in our case, but at any rate it is impressive how short term breaks in supply hampered production levels for very long spans of time. Imagine what never-ending YOY declines worldwide would entail.

[TheDude]

$this->bbcode_second_pass_quote('yesplease', 'T')he shift away from petroleum products for electricity generation in the US resulted in a whopping 3,000bpd reduction in consumption.

[yesplease]

$this->bbcode_second_pass_quote('TheDude', '')$this->bbcode_second_pass_quote('yesplease', 'T')he shift away from petroleum products for electricity generation in the US resulted in a whopping 3,000bpd reduction in consumption.

[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', '')$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('TonyPrep', '')$this->bbcode_second_pass_quote('yesplease', 'H')ow can it give a false impression?

[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', 'B')ut characterising a 10 year period during which oil consumption had two very marked periods, first of decline, then of increase, as "essentially flat" is misleading, IMO.

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('TonyPrep', 'Y')up, that's what I said.

[TonyPrep]

$this->bbcode_second_pass_quote('yesplease', '')$this->bbcode_second_pass_quote('TonyPrep', 'B')ut characterising a 10 year period during which oil consumption had two very marked periods, first of decline, then of increase, as "essentially flat" is misleading, IMO.

[yesplease]

$this->bbcode_second_pass_quote('TonyPrep', 'Y')up, that's what I said. The distinction doesn't seem as clear to me as it does to you.

[Starvid]

$this->bbcode_second_pass_quote('TheDude', 'A')s usual, don't forget the low-hanging fruit of the early 80s: easy gains in vehicle efficiency and the shift away from oil to NG for electrical production. An ad hoc crash program to shift to alternatives won't necessarily be as simple to implement, and rationing is a very likely possibility.

[AirlinePilot]

9.1% Think that one through.

This is the third story I've seen this week that speculates that rapidly dropping price is not going to help in the long run. I believe we are actually going to accelerate the effects of PO with this latest economic turmoil.

IEA World Energy Outlook, Bloomberg

Global Oil Production Is Falling Faster Than Expected, FT Says

By Angela Macdonald-Smith

Oct. 29 (Bloomberg) -- Global crude-oil output is falling faster than expected, leaving producers struggling to meet demand without extra investment, the Financial Times said, citing a draft of an International Energy Agency report. Annual production is set to drop by 9.1 percent in the absence of additional investment, according to the draft of the agency's World Energy Outlook
obtained by the newspaper, the FT reported. Even with investment, output will slide by 6.4 percent a year, it said.

The shortfall will become more acute as prices fall and investment decisions are delayed, the newspaper said. The IEA forecasts that the rising consumption of China, India and other developing nations requires investments of $360 billion a year until 2030, it said.

Is this the nasty report everyone has been eagerly awaiting? I think over on the Oil Drum there have been hints that the report's findings are a bit alarming.

[seahorse]

This has been my latest fear, that the economic downturn would mean little investment into new production, meaning existing production would decline, possibly faster than demand destruction.

$this->bbcode_second_pass_quote('', 'I') personally wonder whether lower oil prices will exacerbate the oil production limits we seemed to be reaching. My own beliefs were that a geologic peak in oil production would not occur until about 2012 - 2014, assuming demand increased at the predicted rates. The problem with dropping demand and dropping oil prices seems to be that necessary investment in new oil production in offshore fields and harder to reach develop places will not occur, and thus, oil production will in fact decline bc existing fields will decline. It seems plausible to me we could get a feedback loop where demand for oil and declines in existing fields "race for the bottom" causing serious economic harm.

[TWilliam]

I forget, does the rule of 70 apply for decline rates in the same manner as it does for increase? You know... 70 divided by the annual growth rate equals the number of years to double consumption. Does it work the same in the opposite direction? If so, that means production will be at half of current rates in a little less than 8 years...

[eastbay]

$this->bbcode_second_pass_quote('TWilliam', 'I') forget, does the rule of 70 apply for decline rates in the same manner as it does for increase? You know... 70 divided by the annual growth rate equals the number of years to double consumption. Does it work the same in the opposite direction? If so, that means production will be at half of current rates in a little less than 8 years...

[Starvid]

This is it.

This is the report I've been talking about during the last year, the one the Administration have tried to supress until after the US election. A bottom up review of the biggest fields, just like Fredrik Robelius did in his recent Ph.D. http://publications.uu.se/abstract.xsql?dbid=7625

This is fucking it!

So in short. Without management and investment in current fields, they will decline by 9.1 % per year, ie, production will be halved in 8 years. Thankfully these fields are managed and invested in, so declines are instead 6.4 % per year which means it will take 10 years for production to go down by 50 %, if there is no drilling of new fields. Thankfully, there is lots of drilling of new fields all the time, but we have to put 86*0.064=5.5 mbpd of new production online every single year, just to stay still. So far we have managed to do this, as we have been on a plateau for the last few years. But for how long will we manage? When we can't keep it up anymore, we'll have reached Peak Oil.

So, why is this report so much more important than all the others that have come before? Because this report is from the IEA, the holy grail of energy information.

Every single company, government organisation, official energy planner etc I have ever come into contact with use IEA data and projections religiously.

This means that when this report is released in November, all the Serious People (tm) will take notice and start adapting.

[Dukkha]

The link in the OP wouldn't load for me but I found this report at The Age which seems to be based on the same report (it includes the 6.4% - 9.1% figures). Strangely, it also says, "The IEA expects oil consumption to reach 106.4 million barrels a day in 2030, down from last year's forecast of 116.3 million barrels a day." Any ideas how to square that circle? Surely if they're predicting such precipitous declines in crude production they must be anticipating a massive expansion of non-conventional sources but does it make any sense on that scale?

[Starvid]

$this->bbcode_second_pass_quote('Dukkha', 'T')he link in the OP wouldn't load for me but I found this report at The Age which seems to be based on the same report (it includes the 6.4% - 9.1% figures). Strangely, it also says, "The IEA expects oil consumption to reach 106.4 million barrels a day in 2030, down from last year's forecast of 116.3 million barrels a day." Any ideas how to square that circle? Surely if they're predicting such precipitous declines in crude production they must be anticipating a massive expansion of non-conventional sources but does it make any sense on that scale?

[TheDude]

For lack of a better word, wow.

These are the volumes of production being brought online for the next 5 years according to the TOD database:

$this->bbcode_second_pass_code('', '2008 2009 2010 2011 2012
5047 5056 4106 3690 3479')

'08-'10 with CERA's 4.5% decline promised marginal gains, but this IEA figure will leave that totally flat if not declining slightly. 2007 only showed 3303 mb/d however - that should've registered as a massive dropoff, unless the accounting is faulty of course. Nevertheless...expect to hear from Khebab and company soon.

Like Starvid I wonder what the political fallout will be with this announcement - if any. Perhaps pols will just attempt to ignore the ramifications, and continue to pray to the great God Ghawar to deliver them.

Like CERA's Jan press release this is puzzling for its showing any kind of optimism, too. "Ladies and gentlemen, we've lost our last engine and the pilot's committed suicide. We'll be landing in 45 minutes." The full document will fill in some details - although I bet they're being hammered with inquiries already.