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Page added on May 3, 2015
Peak Russia + Peak USA means Peak World
Since around 2005 many countries have increased their oil production but more have decreased. But the combined production of the United States and Russia have kept the world on a slight uptrend since that time.
World oil production jumped in 2011, hardly moved at all in 2013 but it was up by more than 1.5 million barrels per day in 2014. And after such a huge gain everyone and their brother were singing “peak oil is dead’. But if you scroll down through the 37 major world oil producers it becomes obvious that a majority of nations have peaked and most of them are in steep decline.
The above chart is EIA data however the next four charts below are JODI data with the last data point February 2015. The data on all charts is thousand barrels per day.
However in the last decade it has been two of the three world’s largest oil producers that have kept us from peak oil, the USA and Russia.
Russia grew like gangbusters in the first six years of this century but has slowed down considerably in the last five years or so while the US, due to the shale revolution, has had four years of dramatic growth.
Using a stacked zero based chart it looks like nothing much has happened since early 2005. And that is correct, the USA and Russia have kept production slightly inching up while the rest of the world slightly declines.
Here we get an amplified view of the World less USA & Russia. The peak was in February 2006 and February 2015 is over 2,600,000 barrels per day below that point.
We have discussed, in several posts, why many of us believe that the USA has peaked, or will peak this year. But what about Russia? Is Russia at her peak also?
I have taken another look at the Global and Russian Energy Outlook to 2040 by two Russian think tanks, The Energy Research Institute of the Russian Academy of Sciences and The Analytical Center for the Government of the Russian Federation that was published last year. I never noticed it before but they actually predict peak oil. On page 35 of this study they say:
Conventional oil (excluding NGL) production will drop to 3.1 billion tonnes by 2040 from the current 3.4 billion tonnes, and the long-discussed ‘conventional oil peak’ will occur in the period from 2015 to 2020. The drop in its extraction will be due to the gradual working-out of reserves of the largest existing fields.
3.4 billion tons per year works out to be 68,000,000 barrels per day and world C+C was about 10 million barrels per day above that number so I don’t know what they are counting, perhaps crude only.
They predict that Russian exports of all petroleum products will peak in 2015. Page 111:
Exports of petroleum products will peak in 2015 and will then gradually decrease until they reach 2010 levels by as early as 2040, mainly due to the decrease in exports of fuel oil and non-marketed petroleum products.
Then on pages 132 and 133 they predict the peak C+C for Russia
In Outlook 2014’s Baseline Scenario, production of oil and gas condensate in the Russian Federation reaches a peak and gradually declines, from 523 million tonnes in 2013 to 522 million tonnes by 2015, after which it continues to decline, right up to the end of the period, to a level of 468 million tonnes. This reduction in production is, for the most part, brought about by the working out of already exploited deposits in the key oil producing regions of the country (in Western Siberia).
They said that Russia peaked in 2013, the year before this document was published, at 10.46 million bpd then decline to 10.44 million bpd by 2015. That is a tiny, almost an imperceptible decline of 20,000 bpd or .2% over two years. They could have said that Russia would plateau in 2013 and remain on that plateau through 2015, which is exactly what has happened… so far anyway.
Here is Russian C+C production through February 2015. It appears now that the peak will be 2014 and 2015 which means that they are at peak right now. The spikes in 2011 were likely caused by the huge Western Siberian wildfires they had that year.
It is interesting to note that both JODI and the EIA reports Russian C+C production at about half a million barrels per day less than what the Russian official web site CDU TEK reports.
Here they have the peak in 2015 but only a slow decline from here on out. Notice that about 60 percent of all Russian oil comes from those very old Western Siberian super giants fields with that percentage declining only very slightly in the future. How can that be? They drilled 8,688 new wells in Russia last year, most of them infill wells in Western Siberia. Do they really expect to poke more holes in those old fields and and continue to get oil from them for another 25 years… or more?
Well yes and no. The chart below shows where they expect all that new oil to come from.
As you can see from the shrinking red column they expect those old fields to decline rather dramatically. But at the same time they expect them to grow. By 2040 they expect fully half of their production to come from “reserves growth”. And they are not bashful in admitting such:
One should point out the significant role that will need to be played by geological exploration during the forecast period, since by 2040 more than 50 per cent of production in all scenarios will need to come from growth in reserves, and final reconnaissance of fields resulting in category C2 reserves becoming category C1.
So those tired old Western Siberian fields will shrink but at the same time they will grow. But in all fairness they will not grow quite as fast as they shrink.
Despite the fall in production in the Baseline Scenario, even at the end of the forecast period the key production capacities of the country will continue to be concentrated in the Tyumen region, with its share accounting for 51 per cent of all crude oil and gas condensate production by 2040 (compared with 61 per cent in 2010).
The Tyumen region, and the areas surrounding it, are the areas in Western Siberia where their oil fields are. So the share of Russian oil production from this region will go from 61% today to 51% in 2040. Because those tired old fields are gonna grow!
Bottom line, USA peaks in 2015 and Russia peaks in 2015 which means the world peaks in 2015. Also many other nations that have increased production over the last few years are also at peak and will be declining soon. And Russia will be declining just a whole lot faster than those two think tanks believe they will. Those old reserves are not going to grow nearly as much as they think they will.
Of course there is a possibility that the peak could actually be in 2014 or even 2016, but I am firmly convinced that we are at peak oil right now. If you have a counter argument I would love to hear it so please post it in the comments below.
I have published a new page, World Oil Yearly Production Charts with annual data charts for all the world’s major oil producers.
35 Comments on "Peak Russia + Peak USA means Peak World"
Nony on Sun, 3rd May 2015 7:32 am
I remember Ron saying in 2014 that Russia had definitely peaked. And it was based off of a month or two of variation on a massively non-zero axis chart, plus some questionable comments by Russians. And then the next several months Russia went up.
There’s a pattern with Ron. Just like when he said TF oil can’t come from the Bakken. With utter certainty. Despite him not being a geologist. And without bothering to research it.
Nony on Sun, 3rd May 2015 7:41 am
Here is Ron in SEP14 talking about Russia already peaked and declining (none of this “in 2015” stuff).
“Russia, the world’s largest crude oil producer, has peaked. Russia is now in decline. Russian C+C production increased about 2,300,000 barrels per day 2005, the year that World conventional oil peaked.
Without sanctions Russia peaked in November 2013 and would have likely started dropping at 1 to 2 percent per year. But with sanctions the drop is likely to be much faster than that.”
http://peakoilbarrel.com/world-oil-production/
Bottom line: the guy is way too certain and emphatic based on limited data/understanding. And the certainty tends to be in the direction of peaker bias. Like when he didn’t think Texas RRC data was delayed more than a month. Like when he said Bakken well EURs were declining. Etc. Etc.
Davy on Sun, 3rd May 2015 7:47 am
NOo No Know, have at it wonder boy. You are above me on these issues so is the Russian report “Global and Russian Energy Outlook to 2040” bogus? If so you have a lot of splainin to do.
Davy on Sun, 3rd May 2015 7:50 am
Wow, that was quick NOo!
This is the pot calling the kettle black if I ever heard it:
NOo said “Bottom line: the guy is way too certain and emphatic based on limited data/understanding.”
Cloud9 on Sun, 3rd May 2015 8:28 am
I’m swayed by the German Army study that puts the decline somewhere between 2015 and 2020. The larger concern is the collapse of credit in a contracting economy.
Jimmy on Sun, 3rd May 2015 9:08 am
Shit the fuck up already Nony nobody gives a shit what a retard like you thinks. Why don’t you make some predictions of your own you fucking clown.
farmlad on Sun, 3rd May 2015 9:30 am
Noo; its just such a shame, that you didn’t have a blog up for a number of years, cause now you could be linking us to your blog where you had predicted so accurately. You could tell us whether you use the numbers from the EIA, JODI, or from the Russian reports, and why you choose the ones that you do.You could also post whether you are counting C+Camel piss or crude only. And now we could all trust your predictions to be pretty much spot on for the next 10 years at least.
You could have posted years ago on how the rig counts would keep on increasing and the frackers keep gaining and closing the gap in uncompleted wells. How production would be booming in the Eagle Ford, Permian, and the Bakken during the spring of 2015.
So maybe you need to start your blog today, “better late than never”.
And if that’s not enough to keep you busy, you could also let us know how that the increase in Natural Gas consumption is an indication of increasing GDP and has nothing to do with leaking gas lines and drafty buildings. Or how its not just taking the place of Coal in running our power plants.
Go for it Noo. Its your chance for fame.
MSN Fanboy on Sun, 3rd May 2015 9:53 am
None of what we say disproves Nonys’ point. Remember when peak oil was in 2005? Remember how we were all wrong? Nony is many things, but the fact you’ve all resorted to snotty remarks proves you know he is right. Peaker bias is truly gargantuan. Which is ironic considering what we say against the cornucopia. We both use the same tools.
Davy on Sun, 3rd May 2015 10:05 am
MSM, come on friend. Assholes attract each other. The NOo is an asshole plain and simple. He is a nicer asshole than me, smart on PO, and smarter on economics. He is happy and joyful but still a cocky asshole cutting down respectable people here. It is one thing to bash Davy doom salad but someone like Rock with solid credentials is bullshit.
As for the predictions the corns are so far up their asses in failed predictions as to already come out there mouth recycling old ones IOW peakers have no corner on the failed prediction market.
Other than that I like the NOo. I also think Farm is right the NOo should start a blog to further his hard hitting anti peaked meme but that does not mean the NOo is right. Like me the NOo is an extremist. I am ready to moderate if the corns will and the anti-Americans will. Until that day I will be one of the boys and raise hell and take names calling out distortions, selective facts, and outright lies.
joe on Sun, 3rd May 2015 10:56 am
Know peak oil will turn out to be like predicting weather. If you are wrong your a fool, if you are right you are a famous genius. There’s allot of factors that go into oil/energy markets, most people base things on current available facts and figures and extrapolate. It’s like looking out the windows to see if it’s going to be sunny next week. Some people are predicting flood, others drought but the fact is there’s always going to be weather. There are serious consequences for humanity no matter who is right. Talk in the intelligentsia and top .0001% is that weather or not to try to colonise other planets, because they know this one is doomed, that’s from the world’s top physist. Is he lying? Okay who ever is right congratulations, put the cat out and turn off the lights on your way out.
steve on Sun, 3rd May 2015 11:00 am
I am with Cloud 9…we won’t see what peak oil looks like as we are about to collapse credit….the U.S economy grew at .2 percent last quarter! I think the FED is surprised at how long people have let them pretend to be doing something! I wonder what really happens behind the curtain……
Boat on Sun, 3rd May 2015 11:57 am
Part of peak consumption is fighting the headwinds of efficiency that peaks dont like to hear. Since 1997 for instance the US economy has grown 40% along with adding over 35 million in population but still uses the same amount of fuel for it’s transportation. This is what i call BAU but I don’t think Davy calls it that.
JuanP on Sun, 3rd May 2015 12:13 pm
Nony has a valid point where Ron’s comments regarding Russian oil production is concerned.
I have to admit that I agreed with Ron last year that Russia was at or past its peak, but now I think I may have been wrong. I thought it was very likely that Russian oil production in 2014 would be higher than in 2015, but multiple recent reports of record post Soviet production in Russia these past few months don’t agree with that. While these recent reports of increased Russian oil production may be manipulated and actual production may be lower than reported, it looks like Russians are going all out to increase production because of the sanctions and lower prices and this is exactly the opposite of what Ron predicted would happen in Russia.
As much as I respect Ron’s knowledge of the oil business, I think he has a little bit of an anti Russian bias based on his writings, and I think there is a chance that he and I were both wrong and Russian oil production may peak in 2015 instead of 2014. We won’t know until next year, though.
Perk Earl on Sun, 3rd May 2015 12:32 pm
I’m not holding my breath any longer for a geologic decline, but rather a decline due to closed in sources from lack of affordability due to depletion (as laid out by short). At some point of depletion there will be a contraction of the world economy, causing the decline to increase rapidly.
steve on Sun, 3rd May 2015 12:43 pm
Boat I see what you are saying and have thought a lot about it but it still does not negate the fact that we need a growth rate of 6 or 7 we had a GDP OF .2 last year! The U.S economy is 200 trillion dollars in debt! The collapse is already happening….Peak oil can’t be discussed without looking at the economies of the world.
Davy on Sun, 3rd May 2015 12:52 pm
Juan, I respect your desire to be accurate. Peak is peak. This is especially true with the high stakes of the top of the Peak oil food chain with both peakers and corns. So much importance is place on the PO point. The predictions can make or break people’s reputation at this level. That’s just the nature of the beast.
I am less concerned about a peak point as I am the approach or the review mirror. I believe even being in the vicinity of a peak is enough to cause systematic disruption. A plateau is not healthy growth it is treading water or sinking. I feel we are close enough with a US and Russian peak to draw the conclusion that descent is near or least the end of growth and the beginning of descent is near.
ronpatterson on Sun, 3rd May 2015 1:15 pm
Nony wrote: I remember Ron saying in 2014 that Russia had definitely peaked. And it was based off of a month or two of variation on a massively non-zero axis chart, plus some questionable comments by Russians.
Nony, that is pure bullshit. You just make up lies. My Russian analysis has always been based on what I heard coming out of Russia starting wit this article which I first saw in 2009:
http://seekingalpha.com/article/163358-alex-burgansky-russian-oil-and-gas-industry-surprises-analysts
I follow every piece of information coming out of Russia. You just make up lies to slander people which is why I banned you from my site.
ronpatterson on Sun, 3rd May 2015 1:22 pm
JuanP wrote: “As much as I respect Ron’s knowledge of the oil business, I think he has a little bit of an anti Russian bias based on his writings, and I think there is a chance that he and I were both wrong and Russian oil production may peak in 2015 instead of 2014. We won’t know until next year, though.”
Good gravy man, 2014 or 2015, what difference does it make? It’s all one hump, all one peak that may in fact carry on over to 2016. This is the Russian peak. Let’s not nitpick things apart.
BobInget on Sun, 3rd May 2015 1:30 pm
You might get a better grip on some of the above charts here:
http://www.investorvillage.com/smbd.asp?mb=4288&mn=179616&pt=msg&mid=14906568
JuanP on Sun, 3rd May 2015 1:38 pm
Ron, I am not arguing with you or nitpicking. I agree with you and Davy that the specific date of Russia’s peak is completely irrelevant. I was just admitting that Russia’s peak might come a little later than I originally thought, but I don’t think it makes any difference at all.
Ron, please understand that I read everything you write, I respect your opinions, and have learned much from you through the years, and I am not siding with Nony, just conceding an insignificant point. Though Nony can be a pain most of the time, I thought he got too much flack for his comment above which contained a kernel of truth.
As far as my saying you may be a little biased against Russia, you must understand where I am coming from. Ithink all of us, myself included have biases, they can’t be helped because they are simply part of our human nature. I meant no offense.
Nony on Sun, 3rd May 2015 2:03 pm
You’re a joke, Ron. You aren’t tough, old man. Running a board has gone to your head. You’ve got a long pattern of screwing things up and then failing to admit that you did so.
Nony on Sun, 3rd May 2015 2:05 pm
Oops. I didn’t see all these people backing me up. Even people who disagree with my ideology and with my tone. I really should have been classy and said nothing. 🙁
Nony on Sun, 3rd May 2015 2:08 pm
Farm:
FWIW, I said that price would turn the shales off like a light switch and predicted much faster declines (even JAN15 declines) than the typical articles. But if you just want to look at things as enemies/friends, black/white, you can ignore that.
Davy on Sun, 3rd May 2015 4:29 pm
NOo, look, Ron is not someone to be NOo BOo’d IOW discredited by someone of your lack of caliber. He can be discounted as any analysts can be but he is definitely legit and committed to truth discovery IMA with little agenda.
You on the other hand are an extremist. I admit to my extremism. I am a hard core doom. You are just an anti peak troll. Juan, of course made a good point about all of us and our bias but you are extremely biased. You can not even acknowledge any of the many peak oil dynamics. At least I acknowledge good news when I see it. You on the other hand have never acknowledge any bad news period!
Start your own blog put some effort into it and build up some readership. That is how you get the respect you are craving. Instead you shit disturb various forums you don’t believe in IOW TROLLing.
Nony on Sun, 3rd May 2015 5:35 pm
You’re speaking from emotion again, Dave. I just in a post above referenced a nuanced view (that the shales were price enabled and would turn off with price). Of course, you don’t get that, since you’re such a lightweight yourself. You don’t read and learn and analyze. You just blather and kneejerk respond.
Nony on Sun, 3rd May 2015 6:06 pm
Ron in 2009:
“Russia reached a new post Soviet Union peak in August and is holding that level through November. November may even be a little higher than August. That however is all about to change but not until next year.
Russia 2010 oil output to fall -Bernstein analysts
But Bernstein analysts said Russian production, which recovered in 2009 after dropping for the first time in a decade in 2008, was merely experiencing a temporary spike following the launches of eight new fields this year.
“With only one significant field due to come on stream in 2010 and reduced drilling activity, we continue to expect declining oil output in Russia in the near term,” Oswald wrote in a research note.”
Of course all those eight new fields have not all ramped up to full production. Most are close however except the largest of them all, Vancor. Vancor, by the end of the year, will be producing at about 50% of full production or about 225,000 mb/d. Production from that level is expected to rise to about half a million barrels per day by 2014. I expect that the slow rise to full production is because they must drill more wells in this arctic field.
Taking all this into consideration I expect non OPEC production to start to drop, early next year, at less than your predicted 1.6 mb/d. That is almost 4 percent and I just don’t think it will drop that fast by next year. I think it will drop at about half that rate until the decline accelerates by about 2012.
Ron P.”
In contrast, Russia did NOT decline a year after 2009. And non-OPEC rose, rather than fell.
Dredd on Sun, 3rd May 2015 6:10 pm
“Since around 2005 many countries have increased their oil production …”
An obvious sign of an hysterical amygdala (Happy Birthday Kurt).
Davy on Sun, 3rd May 2015 8:03 pm
NOo said “You don’t read and learn and analyze” That is not true NOo. I do admit to being a lightweight with the material you are so obsessed about. Yet, that is about the extent of your knowledge and interest. You are one of those specialist in a narrow range of understanding that’s missing the bigger picture. There is allot more to life than being the anti-peaker wonder boy.
Other than your specialty knowledge you’re not very impressive. The fact that you have no balance is another big negative showing cognitive bias. You mentioned “that the shales were price enabled and would turn off with price). Wow, that is rocket science and wow that is balance. loopy. NOo you’re a smart guy just balance yourself and you will see your life open up.
Nony on Sun, 3rd May 2015 8:16 pm
We’re cool, brah.
jimmy on Sun, 3rd May 2015 9:53 pm
Nony you’re a fucking joke. Go play in traffic you fucking retard…
John on Sun, 3rd May 2015 10:28 pm
Let’s pray that peak oil will happen, and hopefully soon, so all the greedy extractors will come to their senses and rely on God’s guidance!
apneaman on Sun, 3rd May 2015 10:47 pm
well said, jimmy
JuanP on Mon, 4th May 2015 11:03 am
Ron, My guess is you already know, but they posted your article over at Russia Insider: http://russia-insider.com/en/peak-russia-peak-usa-means-peak-world/6411
beammeup on Mon, 4th May 2015 12:47 pm
Ron posted: “It’s all one hump, all one peak that may in fact carry on over to 2016. This is the Russian peak. Let’s not nitpick things apart.”
Bingo. Upslopes and downslopes are rarely monotonic, and plateaus are almost always bumpy. Don’t waste energy obsessing over a specific month of peak production. Even correctly predicting a given year for a given country would be quite an accomplishment. What matters globally are big, long-term trends.
Davy on Mon, 4th May 2015 4:07 pm
Beamer, systematically it only takes an approach of peak IOW the vicinity of a peak to cause systematic issues. Oil is foundational to the economy and it’s own production. Any of the various dynamics of peaking are going to reverberate through the economy and the oil sector.
A plateau is another term for “in the vicinity” of peak. The problem with anti-peakers they are also anti-dynamic systems. Most subscribe to the economist religion of technology, substitution, and continuous growth through innovation. They cannot accept limits, diminishing returns, and foundational commodities in regards to our global system.
If you believe in technology and substitution then there are always answer to limits and diminishing returns. This is why we see the BAUtopians in such denial of all the problems and predicaments piling up.