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How Soon Will the World Oil Production Peak?: A Hubbert Linearization Analysis
In this informal paper, I conduct Hubbert Linearization exercises on the world’s 11 topoil producers as well as the rest of the world. The results are used to project the world oilproduction in the future. The evidence presented in this exercise suggests that the world oil production may peakin 2018 or a few years later.
Hubbert Linearization
Hubbert Linearization (first developed by M. King Hubbert) is a statistical techniqueoften used in the peak oil literature. Hubbert Linearization assumes that oil production rises and falls following a pattern thatcan be described by a logistic function:
Q(t) = URR / [1 + EXP (a(Tpeak-t))]
Q(t) is the cumulative oil production up to year t, URR is the ultimately recoverable oil resources, EXP represents the natural exponential function with the Euler’s number “e” being the base, “a” indicates the intrinsic growth rate of the logistic function, Tpeak is the year of peak oil production, and “t” is the current year.
If one takes the derivative of the above equation with respect to “t”, the above equation can be reduced to: dQ/dt = aQ(1-Q/URR) Replace dQ/dt with P (current annual production) and divide both sides by Q:
P/Q = a – (a/URR) Q
If one uses historical data to conduct a linear regression of P/Q over Q, one can solve the two parameters: “a” and “a/URR”. URR (the ultimately recoverable resources) would be solved accordingly. The peak year could in turn be solved.
If one has historical data, Hubbert Linearization is relatively simple and straightforward. But the method has important limitations. Most importantly, it cannot predict future technical changes that will change the amount of recoverable resources. In many cases, the results of Hubbert Linearization are sensitive to the time period used for regressions. The selection of time period often depends on subjective interpretation of available data.
Nevertheless, Hubbert Linearization does reflect the outcomes of historical interactions of geological, economic, geopolitical, and technical factors as well as their evolving trends. When used carefully in combination with other available information, it can provide useful insights into the future trajectory of world oil production.
The World’s Largest Oil Producers
This paper uses BP’s definition of oil production, which defines “oil” as the sum of crude oil and natural gas liquids. The data are mostly from BP Statistical Review of World Energy, extended to 2013 using EIA’s International Energy Statistics.
By this measure, the world’s eleven largest oil producers in 2013 (ranked by their oil production) were Saudi Arabia, Russia, United States, China, Canada, Iran, Iraq, United Arab Emirates, Kuwait, Mexico, and Venezuela.
In this paper, all oil production statistics are stated in million tons. For a rough conversion, 50 million tons of annual oil production roughly equals 1 million barrels of daily production.
Figure 1
Figure 1 shows the oil production of the eleven top producers as well as the rest of the world. From 2005 to 2013, the world’s total oil production increased by 192 million tons. Saudi Arabia’s oil production increased by 19 million tons, the Russian oil production increased by 57 million tons, the US oil production increased by 139 million tons, China’s oil production increased by 28 million tons, Canada’s oil production increased by 52 million tons, Iran’s oil production fell by 40 million tons, Iraq’s oil production increased by 66 million tons, the UAE oil production increased by 19 million tons, Kuwait’s oil production increased by 23 million tons, the Mexican oil production fell by 44 million tons, Venezuela’s oil production fell by 30 million tons, and the entire rest of the world’s oil production fell by 97 million tons.
Among the world’s eleven largest oil producers, three were decliners. Four saw small increases in production. Only the US, Iraq, Russia, and Canada saw large increases in production. If there had been no growth in the US and Iraq, the world total oil production would have fallen by 13 million tons. Alternatively, if there had been no growth in the US and Canada, the world total oil production would have risen by only 1 million tons.
Saudi Arabia
Figure 2
Figure 2 shows Saudi Arabia’s cumulative oil production. Up to 2013, Saudi Arabia had produced 20 billion tons of oil. The vertical axis presents the current production to cumulative production ratios (the cumulative production growth rates). The linear trend using data from the period 1982-2013 indicates Saudi Arabia’s ultimately recoverable amount of oil to be 56 billion tons. Regression R-square is 0.239.
Figure 3
Figure 3 compares Saudi Arabia’s historical and projected oil production. In 2013, Saudi Arabia’s oil production was 540 million tons. Based on the Hubbert Linearization results, Saudi Arabia’s oil production is projected to peak in 2028, with a peak production level of 619 million tons.
Russia
Figure 4
Figure 4 shows Russia’s cumulative oil production. Up to 2013, Russia had produced 23 billion tons of oil. The linear trend using data from the period 2004-2013 indicates Russia’s ultimately recoverable amount of oil to be 68 billion tons. Regression R-square is 0.956.
Figure 5
Figure 5 compares Russia’s historical and projected oil production. In 2013, Russia’s oil production was 531 million tons. Based on the Hubbert Linearization results, Russia’s oil production is projected to peak in 2033, with a peak production level of 596 million tons.
United States
Because of the shale oil boom, the US oil production has risen rapidly since 2008, making it difficult to apply the Hubbert Linearization analysis. I use the EIA projection of the US oil production from 2014 to 2040 and extend the trend to 2050.
Figure 6
Figure 6 compares the US historical and projected oil production. In 2013, the US oil production was 444 million tons. Based on the EIA projection, the US oil production is projected to peak in 2019, with a peak production level of 553 million tons.
China
Figure 7
Figure 7 shows China’s cumulative oil production. Up to 2013, China had produced about 6 billion tons of oil. The linear trend using data from the period 2003-2013 indicates China’s ultimately recoverable amount of oil to be 16 billion tons. Regression R-square is 0.952.
Figure 8
Figure 8 compares China’s historical and projected oil production. In 2013, China’s oil production was 209 million tons. Based on the Hubbert Linearization results, China’s oil production is projected to peak in 2023, with a peak production level of 224 million tons.
Canada
Canada’s oil production has grown rapidly in recent years, making it difficult to apply the Hubbert Linearization analysis. Up to 2013, Canada had produced 5.5 billion tons of oil. As of 2012, Canada’s official proved oil reserves were 28 billion tons (including 27 billion tons of oil sands). I assume that Canada’s ultimately recoverable oil resources will be 33 billion tons.
Figure 9
Figure 9 compares Canada’s historical and projected oil production. In 2013, Canada’s oil production was 194 million tons. Given the assumed ultimately recoverable oil resources, Canada’s oil production is projected to peak in 2051, with a peak production level of 352 million tons.
Iran
Figure 10
Figure 10 shows Iran’s cumulative oil production. Up to 2013, Iran had produced about 10 billion tons of oil. Because of international sanctions, Iran’s oil production fell sharply in 2012 and 2013. Thus, data from 2012 and 2013 are excluded from the Hubbert Linearization analysis. The linear trend using data from the period 1990-2011 indicates Iran’s ultimately recoverable amount of oil to be 19 billion tons. Regression R-square is 0.898.
Figure 11
Figure 11 compares Iran’s historical and projected oil production. Iran’s oil production peaked in 1974, when Iran produced 303 million tons. A recent local peak happened in 2008, when Iran produced 215 million tons.
In 2013, Iran’s oil production was 167 million tons (compared to the projected production level of 208 million tons). Iran’s oil production is projected to fall to 114 million tons by 2050.
Iraq
Because of political instability, there is large degree of uncertainty regarding the future trajectory of the Iraqi oil production. Up to 2013, Iraq had produced 5 billion tons of oil. As of 2012, Iraq’s official proved oil reserves were 20 billion tons. I assume that Iraq’s ultimately recoverable oil resources will be 25 billion tons.
Figure 12
Figure 12 compares Iraq’s historical and projected oil production. In 2013, Iraq’s oil production was 156 million tons. Given the assumed ultimately recoverable oil resources, Iraq’s oil production is projected to peak in 2049, with a peak production level of 241 million tons.
United Arab Emerates
Figure 13
Figure 13 shows UAE’s cumulative oil production. Up to 2013, UAE had produced about 5 billion tons of oil. The linear trend using data from the period 2001-2013 indicates UAE’s ultimately recoverable amount of oil to be 13 billion tons. Regression R-square is 0.567.
Figure 14
Figure 14 compares UAE’s historical and projected oil production. In 2013, UAE’s oil production was 155 million tons. Based on the Hubbert Linearization results, UAE’s oil production is projected to peak in 2024, with a peak production level of 162 million tons.
Kuwait
Up to 2013, Kuwait had produced 6 billion tons of oil. As of 2012, Kuwait’s official proved oil reserves stood at 14 billion tons. I assume that Kuwait’s ultimately recoverable oil resources will be 20 billion tons.
Figure 15
Figure 15 compares Kuwait’s historical and projected oil production. In 2013, Kuwait’s oil production was 153 million tons. Given the assumed ultimately recoverable oil resources, Kuwait’s oil production is projected to peak in 2036, with a peak production level of 184 million tons.
Mexico
Figure 16
Figure 16 shows Mexico’s cumulative oil production. Up to 2013, Mexico had produced about 6 billion tons of oil. The linear trend using data from the period 2009-2013 indicates Mexico’s ultimately recoverable amount of oil to be 11 billion tons. Regression R-square is 0.999.
Figure 17
Figure 17 compares Mexico’s historical and projected oil production. Mexico’s oil production peaked in 2004, with a production level of 190 million tons. In 2013, Mexico’s oil production was 142 million tons. The Mexican oil production is projected to fall to 45 million tons by 2050.
Venezuela
Figure 18
Figure 18 shows Venezuela’s cumulative oil production. Up to 2013, Venezuela hadproduced about 10 billion tons of oil. The linear trend using data from the period 1975-2013indicates Venezuela’s ultimately recoverable amount of oil to be 24 billion tons. Regression R-square is 0.319.
Figure 19
Figure 19 compares Venezuela’s historical and projected oil production. Venezuela’s oil production peaked in 1970, with a production level of 197 million tons. A more recent peak happened in 1998, when Venezuela produced 180 million tons.
In 2013, Venezuela’s oil production was 140 million tons (compared to the projected production level of 163 million tons). If political stability returns to Venezuela, Venezuela’s oil production is projected to stay above 150 million tons from 2014 through 2050.
World Total Less Top 11
Figure 20
Figure 20 shows the rest of the world’s cumulative oil production. The “rest of the world” oil production is defined as the world total oil production less the oil production from the eleven largest oil producers. It includes oil production from the next 38 significant oil producers as well as all the smaller oil producers.
Up to 2013, the rest of the world had produced about 49 billion tons of oil. The linear trend using data from the period 1987-2013 indicates the ultimately recoverable amount of oil to be 86 billion tons. Regression R-square is 0.992.
Figure 21
Figure 21 compares the rest of the world’s historical and projected oil production. The rest of the world’s oil production peaked in 2010, with a production level of 1418 million tons. In 2013, the rest of the world’s oil production was 1299 million tons. It is projected to fall to 341 million tons by 2050.
When Will World Oil Production Peak?
The total world oil production is estimated by summing up the national projections for the top 11 oil producers and the projection for the rest of the world. For the period 1965-2013, there is no projection of the US oil production. Thus, the actual US production levels were used in calculating the projected world oil production for the period.
Figure 22
Figure 22 compares the historical and projected world oil production from 1965 to 2050.
Up to 2008, the projected world oil production (3987 million tons) matches the actual world production (3992 million tons) well. For 2012, the projected world oil production is 4204 million tons and the actual world oil production was 4109 million tons. There is a gap of 95 million tons. For 2013, the projected world oil production is 4278 million tons and the actual world oil production was 4135 million tons. The gap widened to 143 million tons (corresponding to approximately 3 million barrels per day).
The gap reflects the political instabilities that exist in various parts of the world. For Iran, the projected oil production is higher than the actual oil production by about 40 million tons. For Venezuela, the gap is about 20 million tons. For the rest of the world, the gap is about 70 million tons.
Regarding the future of the world oil production, the most important challenges seems to be that the entire rest of the world (the world total less the eleven top producers) has passed the peak and is currently in decline. The rest of the world still accounts for about 30 percent of the world total oil production. The decline has been accelerated by political instabilities that exist some parts of the world (Nigeria, Libya, and Syria etc.). The current tendency is for the rest of the world’s oil production to decline by 16 million tons per year. The declining pace may accelerate to 33 million tons per year for the decade 2021-2030.
Even though this paper projects that oil production in Saudi Arabia, Russia, China, Canada, Iraq, UAE, and Kuwait will continue to growth in the near future. Their combined growth is insufficient to offset the decline from the rest of the world. Only the US oil production growth can bring about rising world oil production in the next few years.
As a result of the current projections, world oil production is projected to peak in 2018, with a production level of 4.4 billion tons. But if political stability returns to some of the key oil producing countries, the gap between the actual oil production and the projected oil production may be closed. This may allow the world oil production to grow for three or four years after 2018.
The key question is whether the “rest of the world” will continue to decline and at what pace. Another important question is whether the EIA projection of the US oil production turns out to err on the optimistic or pessimistic side.
On the other hand, if Saudi Arabia, Russia, and Iraq fail to raise production in the future, the current projections may prove to be too optimistic and the world oil production peak could arrive sooner.
25 Comments on "How Soon Will the World Oil Production Peak?: A Hubbert Linearization Analysis"
Plantagenet on Sun, 4th May 2014 10:13 pm
Good thing we’ve got a 100 year supply of natural gas to fall back on after oil peaks in 2018.
Norm on Sun, 4th May 2014 11:11 pm
WTF peaking in 2018? It alread peaked probly more like 2006. Just the oddball substitutes like tar sands, has managed to keep global production flat-lined rather than falling.
Davy, Hermann, MO on Mon, 5th May 2014 7:33 am
ARTICLE SAID – As a result of the current projections, world oil production is projected to peak in 2018, with a production level of 4.4 billion tons. But if political stability returns to some of the key oil producing countries, the gap between the actual oil production and the projected oil production may be closed. This may allow the world oil production to grow for three or four years after 2018.
I am going to let the experts dissect this technical study but the conclusion fits what I see coming with PO dynamics of the above ground, below ground, and economics of price. I firmly believe that systematic risk is the number one danger now with a global interconnected world with all locals depending on the global, with all local industries depending on the global, and all survival depending on status quo BAU management of modern man poisons. I see the first and most dangerous of these risks as the financial system which is the life blood of the global system. This financial system is repressed with the number one most important variable of confidence and liquidity being maintained through maintenance of the low cost of money ensuring that confidence and liquidity needed to keep status quo BAU humming is maintained. This wealth transfer and cannibalistic policy is destroying the global social fabric but the real danger is from the players themselves. When the 1%er’s lose confidence the system will crash and along with it the global system supporting us all. The current economic dysfunctions and the distortions are eventually going to spook even these 1%er people who are now nothing more than a herd at the feed trough. The second is the energy brick wall. We are there now with production that is economic falling rapidly and subsidized uneconomic production trying to support this depletion. This uneconomic oil subsidy is only possible through financial repression and will end when the cost of money rises in a panic driven correction. Oil is a global market and driven by global finance. This will be a global event Russia, ME, and the west will not escape the discipline of the market or the support of the global. An example is a vital part for Russian oil production will not be available because of a global contraction and this will shut down production somewhere in Russia’s vast oil complex. Multiply that event by thousands globally in macro and micro situations. If confidence is somehow maintained the bellow ground predicament of oil will kick in to end global status quo BAU. Finally the sheer weight of other stresses of food/water, climate, and over population issues will combine in a reinforcing wave of positive feedbacks overwhelming the command and control of a self-organizing uncontrollable global infrastructure. The command and control element of the global system is subordinate to the self-organizing aspect of the global system meaning this system is at its farthest extension of equilibrium and the break will be a catastrophic bifurcation of irrational and dysfunctional events caused by this hyper extension. If we would have managed a de-growth policy 30 years ago things may have been different instead we chose economic and population overshoot to carrying capacity. We chose growth over rationality. Reality says the game is up and it is time to pay the piper! And finally if all this were not enough there is the Black Swans that surface regularly in this hyper extended unstable system.
meld on Mon, 5th May 2014 7:53 am
if we convert all our land to grow biofuel then oil will never peak, we can just grow our own. /sarc
as Norm says, peak happened in 2006/7, rest is substitutes. Liquid fuels might peak in 2018 but conventional oil peaked in 2006.
Boat on Mon, 5th May 2014 9:49 am
Davy,
As a result of the current projections, world oil production is projected to peak in 2018, with a production level of 4.4 billion tons. But if political stability returns to some of the key oil producing countries, the gap between the actual oil production and the projected oil production may be closed. This may allow the world oil production to grow for three or four years after 2018.
Let’s say your right and we are good till 2022 and then the world is hit with another big oil price hit. By then do you think fracking will be poised to go global and have efficiencies in fracking like the US has, or much better by then? Could it be possible this extends a plateau for another decade after that? Just for kicks lets assume that to be true. Will solar, wind, semi trucks, batteries, electric cars/electric economy, building efficiency etc have a chance through tech to buy us another 10 years? Maybe in 25 years we will wake up and deal with population. Like the politicians catching up with the population which is already under the keep even point in many developed countries. Tougher economic times will push populations down even more.
What will be going on then is just to hard to predict but I think it’s possible to survive with pain but not a huge crash.
rockman on Mon, 5th May 2014 11:30 am
Boat – “we are good till 2022 and then the world is hit with another big oil price hit.” And this is the assumption I’ll keep beating up: if global peak oil hits in 2022 why do you assume oil prices will increase? The price of oil at anytime will be a function of supply and demand…not just the amount of oil available. The highest oil price (adjusted for inflation) we’ve seen in the last 35 years happened in 2008. And given global oil production is higher now then in 2008 obviously that price didn’t correspond to GPO.
Hypothetically let’s assume we hit GPO in 2022. But if the world has slumped into a recession (as it does have the cyclic habit of doing) we could have the lowest oil price in 2022 that we’ve seen in a couple of decades. Of course, there is some dynamic between global oil production rate and oil prices but it’s hardly a one to one relationship.
Which takes me full circle why I’ve often dismissed the debates about the date of GPO. Why argue about a spot on the calendar that will have a minimal (if any) affect on the price of oil? IMHO about 99% of the population doesn’t care about when GPO has or will happen. They care about the price of oil. That will be a greater determining factor on how much they can buy then how much the world can produce.
Northwest Resident on Mon, 5th May 2014 12:18 pm
The project of 2018 in this very informative article assumes that the global economy keeps chugging along more or less as it currently is. What it doesn’t take into account is that the global economy is a bubble ready to burst with many trillions of bad debt all tied together into one big ball of worms. If/when that global economy crashes, throw the peak oil projections out the window. No global economy = no more oil, at least not for you or me and not for the one billion vehicles currently on the roads of the world. The global economy could go into meltdown at any moment, but they’ll probably keep it glued and duct-taped together more or less for another year or so. If you’re one of those who think that the global economy can keep going as it is indefinitely, you might want to think it over.
Boat on Mon, 5th May 2014 12:46 pm
rockman,
To have any discussion you have to have a couple of assumptions. I was using Davy’s just as an example then I added a couple more.
Davey on Mon, 5th May 2014 1:44 pm
Boat, I hope your optimism prevails but I see the global financial system as the danger. I just don’t think it will hold together much longer. The whole GPO deal is like Rock says economic dependent in the near term. Longer term we are screwed. I don’t see any other technology or efficiency saving us. The scale of the needs to mitigate GPO are too great.
Perk Earl on Mon, 5th May 2014 2:47 pm
I’m with you NR. What is apparent is the pressure being applied to the world economy via higher energy costs. QE is a manifestation of trying to fill the gap between high growth with cheap oil, and what oil now sells for to maintain some revisionist idea of growth; in spite of loss of those in the labor force and high paying jobs being replaced by low paying one’s; the widening divide between the well to do and the poor; parts of countries like Scotland and Venice trying to become independent from the financial problems of their parent country; and face offs between countries for resources beginning to intensify.
What could be done to keep BAU going with fancy fiscal desperate policies has been done. Once we take another step down into a recession the options to jolt BAU back into coherence will be even greater desperate measures offering up diminishing returns.
I’d say the world economy cracks in some way in the next 1-3 years into a deep recession that will in turn initiate a descent from peak oil, not the other way around.
Northwest Resident on Mon, 5th May 2014 3:14 pm
Perk Earl — That’s the way I see it too. The global financial system will crash and burn before we get to a point where everybody is standing around saying “hey dude where did all the oil go”.
It has been amazing these last eight years or so to see how many rabbits the financial powers have managed to pull out of their proverbial hats to keep what was essentially a collapsed economy in 2008 chugging along up to now.
But those of us with our eyes wide open can easily see that the many “tricks” used were only short term, desperate measures — certainly not conducive to long term fiscal soundness, just the opposite in fact.
They have pumped and humped planet earth for just about every thing worth extracting and converting into a buck. They probably have one or two tricks left. If so, they’ll buy a little more time. But fact is, time has just about run out.
energyskeptic on Mon, 5th May 2014 6:35 pm
I have to wonder if the figures for Russia aren’t too high. I have a book review of “Wheel of Fortune. The Battle for Oil and Power in Russia”, by Thane Gustafson, 2012 here:
http://energyskeptic.com/2013/book-review-of-wheel-of-fortune-the-battle-for-oil-and-power-in-russia/
rockman on Mon, 5th May 2014 7:56 pm
Boat – I agree. But notice I wasn’t predicting how oil price will or won’t respond on the date we hit GPO. I don’t have a problem with folks making assumptions to model any prediction. But oil prices are not determined by the global oil production rate. And that isn’t an assumption but a fact borne out by the well documented rate/price relationship established over many decades. Again, adjusted for inflation, oil prices jumped over $140/bbl in the late 70’s. And no one would argue we hit GPO in 1979.
So back to the assumption that we hit GPO in 2022. That’s OK…time will tell. But assuming oil prices will spike as a result is easily proven to be a completely unsupported assumption. And that’s the assumption I refuted…not the assumption that we’ll hit GPO in 2022.
Boat on Mon, 5th May 2014 8:19 pm
rockman,
Go back to Davy’s 2nd point about an energy brick wall. The point I was trying to make was that if prices did take a big hike, fracking could very well buy the world another decade or 2 because of the efficiency of the future fracking operations and advanced turn key solutions. If there is a ton of money to be made a lot of shale that is just to inconvenient now will look good. The idea of 60 horizontal fracked wells on a pad with the pipeline and all the infrastructure right behind. Like building cars, an assembly line type operation will drive down costs.
Boat on Mon, 5th May 2014 8:41 pm
rockman, Davy
I grew up in the PVC extrusion business over 35 years. Started off as an operator and ended up a production manager. Energy affects everything and I have time to read some about it now on occasion. I enjoy all the comments and links but as a natural skeptic. I believe everything and nothing through the prism of that life experience. Maybe that is why I have more optimism than many because I know what mans brainpower can do if interested in problem solving. I wont’t bore you with my details but was amazed how fast things changed and how impatient we were trying to get the company to change faster.
I don’t know how much of the world works like that but as an American we put politics aside at the door and scratched our heads continually trying to make that pipe faster with less scrap.
That drive will serve us well in the future.
Davy, Hermann, MO on Mon, 5th May 2014 10:08 pm
Boat, my energy brick wall thoughts are related to energy economics and systematic risk. What I am basically saying in a nut shell is society will be faced with economic oil issues (prices), above ground issues (political/distribution), and below ground issues (reserves). When I say prices I mean more than oil prices. Oil prices will affect production as we all know. We also have the variable prices of all those items that go into the production, sale, distribution, capex cost, and refining. The brick wall I mentioned is the confluence of all three dynamics in a positive reinforcing way. This energy brick wall issues goes further and causes systematic global stress. Energy is vital to the complex interconnected global system. This system is in a constant race with entropic decay of all kinds. When less energy is allowed in this system the system fails to solve problems. When problems are not solved very often they create new problems. The decent will be much different from the ascent per systems theory. Growth has a degree of stability and rationality. In decent there is quite often a break to a lower level of equilibrium in a bifurcation. In a bifurcation chaos is the driver. Dysfunction and irrationality are the results. In a complex interconnected global system too much irrationality and dysfunction seizes up the “fine-tuned” engine so to speak. We also have the effect of prices both high and low or out of the economic goldilocks range. The financial system is among the most complex subset of the global system. It is also the most fickle with the human nature component of confidence and panic. Confidence equals liquidity and all business related activities require liquidity just like energy. We are seeing price stresses from depletion of conventional oil and the high cost of unconventional oil. Both classes of oil are being subsidized currently by financial repression of the cost of money which is at historic lows. We all know the erratic nature of the political and distribution of oil. This has been historically the main problem with oil. Currently it is still significant and deteriorating. Combine all these together brick by brick and you have the energy brick wall that the satus quo BAU train is heading for. This train is a runaway train with no possibility of management. So we are barreling towards something bad. The million dollar question is when. The complexity of this whole affair makes a short term prediction impossible. It is like using a supercomputer to predict climate. There is just too many variables and chaos. Chaos cannot be predicted.
Nony on Tue, 6th May 2014 7:06 am
Doesn’t look like that analysis works too well for US oil.
Hubbert is all washed up. I read his papers. His main thing was to calculate the area under the curve (total production), based on resource estimates, not the specific year. He screwed that up big time and in what direction? The pessimist direction. Surprise, surprise. Typical peaker. His gas predictions are REALLY a hoot.
peterjames on Tue, 6th May 2014 8:24 am
So this is the prediction that is going to prove to be correct?
Davy, Hermann, MO on Tue, 6th May 2014 8:44 am
Noon, were broke buddy. No moww sugar daddies to keep our kingly lifestyles going. You have shown no convincing data or ideas to the contrary. Instead it is the same old fantasy of exuberance and plenty.
westexas on Tue, 6th May 2014 8:59 am
Of course, US crude oil + condensate production (so far at least) remains below the 1970 peak rate, which is one of life’s little ironies, to-wit, that the Cornucopians are using the example of what is so far still a post-peak crude oil producing region, the US, to refute the Peak Oil “Theory.”
In any case, I posted a couple of comments and charts on the original Peak Oil Barrel post (at the top of the thread).
Basically, it appears quite likely that actual global crude oil production* peaked in 2005, but global gas production–and associated liquids, condensates and NGL’s–have so far continued to increase.
*45 or lower API gravity crude oil
westexas on Tue, 6th May 2014 9:02 am
Incidentally, when we price an item, shouldn’t the price directly relate to the supply of the item being priced?
When we ask for the price of oil, we get the price of 45 or lower API gravity crude oil. However, when we ask about the supply of oil, we get some combination of crude oil + condensate + NGL + other liquids + refinery gains.
As I have previously noted, it’s analogous to asking a butcher for the price of beef, and he gives you the price of steak, but if you ask him how much beef he has on hand, he gives you the total supply of steak + roast + ground beef.
John on Tue, 6th May 2014 11:54 am
I don’t like the projection lines very much. You’ll notice that the data points for world oil production are generally above the line until 5-6 years ago, when all data points fall slightly below the line. I also think it’s reasonable to suggest that human ingenuity and advanced extraction techniques to recover may distort the parabola, so that the decline after decline may be steeper.
John on Tue, 6th May 2014 11:56 am
Oops. A bit unclear. “so that the decline after peak may be steeper than the proposed parabolic fit.”
Northwest Resident on Tue, 6th May 2014 12:11 pm
It looks like things are going so well in the oil fracking business that even the Pipeline companies have come down with shale fever.
“Instead of negotiating guarantees from drillers that they’ll pay fees or pump a minimum volume of oil and gas through their systems, pipeline companies such as Eagle Rock Energy Partners LP and Oryx Midstream Services LLC say they are signing agreements based on the acreage of the fields the producers plan to drill. Producers are getting away with it because there’s more competition to ship as domestic crude-oil output has risen to its highest level since 1988.
“There’s an assumption, and I’m not sure it’s exactly valid, that acreage will equal volume,” said Allen Gilmer, chairman and chief executive officer of Austin, Texas-based Drillinginfo Inc., which tracks wells. “I’d sure as heck want to have a volume consideration.”
Six years into the shale-driven energy boom, pipeline companies, many of them backed by private-equity funds, are taking on the risk usually shouldered only by drillers — if the wells come in, they can reap a bonanza. If not, they face losses. Infrastructure firms have historically been less vulnerable to energy-price changes and unpredictable wells.”
This is GREAT news for our resident techno-optimist, Nony.
I wonder how this looks to experienced oil guys like rockman, West Texas, shortonoil and others???
No Gas, No Problem, for Pipelines Backed by Private Equity
Bloomberg dot com/news/2014-05-06/no-gas-no-problem-for-pipelines-backed-by-private-equity.html
Nony on Tue, 6th May 2014 6:50 pm
I don’t see why it’s so crazy that a pipeline company takes a risk. I mean a deep offshore well is a big capital risk. So is Kashagan. Etc. It’s just a big project. Maybe it’s a little different than previous practice, but so what. If they have the money and decide to risk it, so be it.