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Michael Lynch: What Ever Happened To Peak Oil?
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A decade ago, the media was filled with stories about peak oil, numerous books were published on the subject (such as Half Gone and $20 a Gallon!), and even the Simpsons mentioned it in an episode about doomsday preppers. Now, the topic is largely forgotten and the flavor of the month is peak oil demand. Anyone concerned about the quality of research that works its way into the public debate should be curious about how so many were so wrong for so long. (Buy my book for the full story.)
First and foremost, realize that in the 1970s, numerous analysts and institutions made similar arguments, arguing that geological scarcity was responsible for higher prices not the two disruptions of production in 1973 and 1979. Indeed, in the months before oil prices collapsed in 1986, the consensus was that prices were too low and had to rise to make upstream investment profitable, despite the fact that OPEC production was collapsing (down from 30 mb/d in 1980 to 15 in 1985). You would think that this would make people more skeptical about claims that geological scarcity was responsible when the shutdown of Venezuelan production and the second Gulf War cut off Iraqi supplies sent prices higher starting in 2003.
Such was not the case. In fact, on September 21, 2004 the Wall Street Journal published a front-page story “As Prices Soar, Doomsayers Provoke Debate on Oil’s Future,” quoting the founder of the Association for the Study of Peak oil as saying “Holy Mother! The good ol’ moment’s arrived!” Oddly, the article didn’t mention the alternative explanation for high prices, namely the loss of production from Venezuela and Iraq, about 1 billion barrels up to the article’s publication.
The current era of peak oil warnings started twenty years ago, when Scientific American published an article by two retired geologists called “The End of Cheap Oil,” which presented the idea that world oil production would soon peak while demand kept rising, creating economic shock waves and even ‘the end of civilization’ as one co-author said subsequently. Since the oil price collapsed to $12 a barrel that year, most paid little heed at first, but as oil prices began to rise five years later, attention soared.
Few realize the debate began a year earlier, in the pages of the Oil & Gas Journal, where members of the opposing camps put forth their views. Colin Campbell, who later became founder of the Association for the Study of Peak Oil (and coauthored the 1998 Scientific American article), wrote an article titled “Better Understanding Urged for Rapidly Depleting Reserves” in which he warned “there is comparatively little left to find” and “the world’s political, economic, and political stability, which relies on an abundant supply of cheap oil, is in serious jeopardy.” His core argument was that the amount of recoverable crude oil, which he put at 1.8 trillion barrels, was smaller than most
The contrary view was put forth in the same journal in an article by M. A. Adelman and this author, noting past pessimism: “For many years now, nearly every forecast has been: an early peak, then in 3-5 years decline in virtually every place but the Persian Gulf.” And “The oil industry has always been in a tug-of-war between depletion and knowledge. It takes endless effort and investment to renew and expand reserves. But resource limits are a phantom….Repeatedly, the forecasts are revised with a higher and later peak….These estimates of declining reserves and production are incurably wrong because they treat as a quantity what is really a dynamic process driven by growing knowledge.”
Since then, the peak oil advocates have repeatedly increased their estimates of recoverable resources (Campbell’s went from 1.575 to 1.9 trillion) and pushed the date of the peak further out, exactly as Adelman and Lynch argued, while trying to argue that the increase in oil supply was ‘unconventional’ oil which they were not analyzing. Of course, they tend not to mention that their 1998 article claimed “But the industry will be hard-pressed for the time and money needed to ramp up production of unconventional oil quickly enough.” Similarly, many argue that the growth has been from NGLs or shale, not conventional oil, but the figure below refutes that.
World Petroleum Supply
The general view of the issue is that shale oil saved us from peak oil, and the issue has largely disappeared from the media, to be replaced by warnings of peak oil demand, but there are still articles about peak cobalt, peak cocoa and similar scares. Rather the way your local news station constantly reports on some new threat to the public (germs in airplane bathroom sink water, dangers from household cleaning products, etc. ad infinitum).
Unfortunately, very few people realize that the entire concerns about peak oil were based on misinformation or junk science. Specifically, the research was not scientific at all but statistical analysis so badly done that it wouldn’t pass a first-year college course. The work by Campbell and Laherrere relied on the basic idea that geology determined production trends, and thus trends could be safely extrapolated based on the bell curve model. If production was declining, that is. Economics didn’t matter because ‘you have to find oil before you can produce it’ and if it’s there, it will be produced. Technology could not improve recovery because “Technology cannot change the geology of the reservoir, but technology (in particular horizontal drilling) can help to produce faster, but no more…” (Jean Laherrere)
The majority of this is nonsense. Production usually doesn’t follow a bell curve, and when it does, it is the result of the effects of exponential growth and decline. (Many repeated the claim that geology meant oil production in a region had to follow a bell curve without actually checking the data.) Instead, changes in oil prices, fiscal terms, and access to resource basins cause production to fluctuate all the time—and often surpass the supposed ‘peak’ level that peak oil advocates identify.
Many of the arguments reflected their authors’ ignorance of either the industry or forecasting. Simmons claimed that hearing the Saudi oil company used ‘fuzzy logic’ to model reservoirs convinced him they had problems, since he’d never heard of it. (It’s just a decades-old programming method.) Joe Romm said “Steep falls in oil production means the world now needed to replace an amount of oil output equivalent to Saudi Arabia’s production every two years, Merrill Lynch said in a research report.”
Apparently, he didn’t know that Jimmy Carter, in his 1977 speech on the energy crisis, said, “…just to stay even we need the production of a new Texas every year, an Alaskan North Slope every nine months, or a new Saudi Arabia every three years. Obviously, this cannot continue.”
Thus, the publications and predictions have by and large not come true—often rather spectacularly. Russia was said to be unable to surpass 8 mb/d, and when they did, 9 mb/d, and when they reached 10 mb/d, a quick collapse was predicted. Production there is over 11 mb/d and still increasing. And a 2005 book describing the imminent collapse of Saudi production, presaging world production collapse, was not only riddled with errors but has proven wholly invalid. The Saudis have experienced no production difficulties, indeed had to cut back to support prices; and world production has grown by about 15 mb/d since the 2005 peak prediction by that author and others.
Arguments made by knowledgeable resource economists have explained the historical pattern, such as the 1997 article by Adelman and Lynch. The petroleum resource base is huge, at least ten times what is described by peak oil advocates, and price spikes reflect temporary supply disruptions or the removal of some of the ‘cheap’ resource from the accessible portion of supply by resource nationalism. Peak oil advocates were following the long-standing neo-Malthusian practice of interpreting short-term problems as permanent and insoluble, just as was done in the 1970s.
Tellingly, those believing in peak oil often displayed a certainty that was totally unwarranted, given the complexity of the issue. The 1998 Scientific American article stated bluntly, “Predicting when oil production will stop rising is relatively straightforward once one has a good estimate of how much oil there is left to produce.” (They predicted the peak within ten years; that was 20 years ago.)
Ken Deffeyes went further, actually predicting a peak in global oil production on Thanksgiving Day, 2005. The incredible precision of such a prediction did not seem to him to be unlikely. Other comments:
Greenpeace official Rex Weyler made the confident statement, “Oil company cheerleaders proclaiming huge supplies of oil are dead wrong. Peak oil is as real as rain, and it is here now. Not 2050. Not 2020. Now.” (That was in 2012)
“I wasn’t going to post on this since I have blogged endlessly on the painfully obvious reality that we are at or near the peak (see “Peak Oil? Bring it on!“).” Joe Romm 2009
“But others held it up as convincing proof of the notion that the world’s oil production would soon reach a pinnacle, never to be exceeded.” The Economist in 2008, discussing the Simmons book Twilight in the Desert.
“This is not a controversial statement. It is just a question of when.” Jeremy Leggett in 2006
And those who disagreed were treated with derision.
“In a world where fact-checked information were valued over mere argumentation, where intelligent inquiry and dialogue were preferred to invective-laden diatribes and declarations of fact-free faith, the voices of Lynch, Yergin and Learsy would never be heard, let alone paid large sums of money for “proprietary” information about their foolish dreams.” Chris Nelder 2009
“At a 2005 conference on oil in Italy, I listened to the former US Secretary of Energy, James Schlesinger, liken denial about peak oil—in the face of all the emerging evidence—to Pompei’s citizens ignoring the rumblings below Vesuvius.” Leggett in Half Gone p. 277 Others have compared those who didn’t agree with peak oil arguments to Neville Chamberlain at Munich, ignoring looming disaster.
“They are cornucopians who cannot fathom the possibility of limits to growth.” Kurt Cobb 2005
Not surprisingly, few of those who were so certain about peak oil have admitted to being wrong, or simply commented, as Joe Romm did, “The idea of peak oil supply — the notion that our reach (demand) for oil would exceed our grasp (global supply) — is dead.”
Richard Heinberg, a one man apocalyptic industrial complex, falls back on the idea that peak oil occurred in 2005—peak conventional oil. Thus, the peak oil theor(ies) were not disproven, but the event delayed, primarily because fiscal policies led to a flood of capital into, for example, U.S. shale production, but, he says, “Like all debt bubbles, the fracking bubble is going to burst at some point. No one knows whether that will happen later this year, next year, or five years from now. But burst it will.” Apparently, he thinks the 2008 oil price surge was not a bubble, but shale oil production is.
Many others have simply ceased to discuss the subject. Theoildrum.com has closed down, the Association for the Study of Peak Oil no longer holds conventions (or does very much at all), and one reporter found it hard to locate most of the original theorists or get them to respond. Some sites, like peakoil.net, are now more focused on environmental questions, although theoilage.org is still active.
The question of why remains paramount. As Financial Times’ Ed Crooks correctly noted, “It’s worth noting, incidentally, that although the Peak Oil supply pessimists may have been fundamentally wrong, they were more useful for predicting the market of 1999-2013 than many people who were fundamentally right.”
So, whereas the Ptolemaic model of the solar system outperformed the initial Copernican model, that was not evidence of its scientific validity. As I noted many times, there’s a big difference between being smart and lucky. If you predict a stock market crash for your entire career, you will occasionally be right, but that doesn’t mean you understand the market. In a 2001 Oil & Gas Journal article, entitled “A New Era of Oil Price Volatility” I described market factors that I expected would make prices more volatile and higher. How much higher? Well, $26 as the new mean. (Embarrassed cough)
So, the peak oil theorists got lucky in that the industry experienced a large number of supply disruptions that raised prices, which seemed to confirm their arguments—just as the Iranian Oil Crisis of 1979 incorrectly convinced many that ever-higher crude prices were unavoidable and resource optimists naive. But by understanding that supply disruptions in Iraq, Libya, Venezuela and so on were responsible for higher prices, it is possible to recognize that political trends in oil exporting countries will determine prices, not resource scarcity. Recognizing the former means coping with cyclical prices, believing in the latter means getting blindsided by every major price decline.
Now, with production problems in Libya and Venezuela (and maybe Iran) pushing prices towards $80 a barrel, the industry is warning against irrational exuberance and urging capital discipline—just like it did in the early 2000s, only to give into the siren call of high prices. Let’s hope the next price crash doesn’t bring similar pain.
69 Comments on "Michael Lynch: What Ever Happened To Peak Oil?"
Sissyfuss on Fri, 29th Jun 2018 8:44 am
Forbes cares .
Cloggie on Fri, 29th Jun 2018 9:51 am
Peak oil supply… one big yawn.
Davy on Fri, 29th Jun 2018 10:16 am
Should read what ever happened to the Hubert’s Peak Oil? Peak oil supply and demand dynamics are alive and well. A collapsing economy slow or fast has the potential to derail supply and demand. War has the potential to destroy the economy and infrastructure. The high quality conventional oil is in steep depletion leaving us with unconventionals which are economic liquids. Without a robust economy these liquids might not be utilized at the volumes needed. Then there is the case of multiple supply shock variables. We could have war, economy, and failing states combine in a decline spiral. The much banked on renewable revolution is a techno optimistic fantasy. Renewables and EV’s will definitely help but reality based on physics and economics questions a 100% renewable transition in time to matter. OK, we are doing well now but just barely. Just barely is nothing to brag about with 7BIL people to feed.
MASTERMIND on Fri, 29th Jun 2018 10:34 am
Michael Lynch the biggest neckbearded peak oil denier on the planet earth..this guy has made a living off of denying peak oil..I tried to argue with him on Twitter but he wouldn’t respond..
Oil discoveries in 2017 hit all-time low –Houston Chronicle
https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php
Sleepwalking Into The Next Oil Crisis
https://www.forbes.com/sites/rrapier/2018/03/23/is-the-world-sleepwalking-into-an-oil-crisis/#509edc8b44cf
MASTERMIND on Fri, 29th Jun 2018 10:36 am
Clogg
You better take a nap now..Soon you wont be able to sleep a wink..without the rule of law and government in place..many things will go bump in the night!
MASTERMIND on Fri, 29th Jun 2018 10:38 am
People are almost completely ignoring a looming crisis for oil
http://www.businessinsider.com/the-future-of-oil-supply-and-demand-2016-9
Antius on Fri, 29th Jun 2018 10:48 am
“So, the peak oil theorists got lucky in that the industry experienced a large number of supply disruptions that raised prices, which seemed to confirm their arguments—just as the Iranian Oil Crisis of 1979 incorrectly convinced many that ever-higher crude prices were unavoidable and resource optimists naive. ”
If oil were abundant, supply disruptions would not cause significant prices increases, because there would be plenty of other suppliers willing to step in and fill the market. That hasn’t happened.
MASTERMIND on Fri, 29th Jun 2018 11:01 am
Peak oil theorist didn’t get lucky..Conventional oil peaked in 2006..Just as Hubbert predicted..
Oil’s Tipping Point Has Passed (James Murray & Sir David King 2012)
https://www.scribd.com/document/375500703/Climate-Policy-Oil-s-Tipping-Point-Has-Passed-Murray-King-2012
I hope lynch is around when BAU goes down..he deserves to suffer..
spike on Fri, 29th Jun 2018 12:28 pm
Gee, Mastermind, when did you try to argue with me on Twitter? I’ve only had a couple of peak oil comments there (it is hardly the place for complex debate IHMO).
Antius, do you really think an abundant resource automatically and immediately translates into new production?
Mike L
onlooker on Fri, 29th Jun 2018 12:45 pm
You can count on three things, death, taxes and Mr. Lynch blasting PO theory.
Anonymous on Fri, 29th Jun 2018 1:00 pm
Spike, there is actually an interesting video on peak mining on this site. The guy is a peaker and wrong (but I repeat myself) and he really doesn’t understand the COGs based rationale for mining impact. [If energy is 10% of mining cost and oil/diesel is 20% of that, it doesn’t really matter if it doubles…you pass it on (2% total) and the total price increase doesn’t impact emtal demand much). All those caveats, the guy presented well and it was something different. And mines are fun…heavy metal!
http://peakoil.com/generalideas/well-gosh
MikeDelta7 on Fri, 29th Jun 2018 1:24 pm
Nothing. Oil peaked in 2005-2006, since then, we´ve been dumping billions into marginal resources and pumping increasingly lower quality stuff at increasingly higher costs, including things that aren´t oil at all. The IEA wraps everything in a raw volume data and pretend we are beating records each and every year.
Peak oil already happened, we´re in a post-peak world. we´ve been dealing, mostly in the worst possible way, with the aftermath, since then.
Regards
MASTERMIND on Fri, 29th Jun 2018 1:45 pm
Lynch
Don’t play dumb with me..I will bury your neckbeared ass..
Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….
https://imgur.com/a/6dEDt
https://arxiv.org/pdf/1708.03150.pdf
https://www.scientificamerican.com/article/has-peak-oil-already-happened/
http://www.sciencedirect.com/science/article/pii/S0301421509001281
https://www.scribd.com/document/375110698/The-end-of-Peak-Oil-Why-this-topic-is-still-relevant-despite-recent-denials-Chapman-2014
https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015
http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf
http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
MASTERMIND on Fri, 29th Jun 2018 1:46 pm
Lynch
The End of the Oil Age is Imminent!
Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.
http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.
https://imgur.com/a/6dEDt
Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.
Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.
MASTERMIND on Fri, 29th Jun 2018 1:50 pm
Lynch
As M. King Hubbert (1956) shows, peak oil is about discovering less oil, and eventually producing less oil due to lack of discovery.
Oil discoveries in 2017 hit all-time low –Houston Chronicle
https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php
IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Saudi Aramco chief warns of looming oil shortage
https://www.ft.com/content/ed1e8102-212f-11e7-b7d3-163f5a7f229c
Peak oil validated by the IEA and Saudi’s..
MASTERMIND on Fri, 29th Jun 2018 1:56 pm
Lynch won’t dare challenge the great MM! He will back down like the bitch he is.. Just like he does on Twitter..
Easy come, easy go..
MM 1 Neckbearded big oil lap dog 0
JuanP on Fri, 29th Jun 2018 2:12 pm
MM is a troll, Mike, and all the regulars here know it. He is obviously clinically insane and is best ignored.
MASTERMIND on Fri, 29th Jun 2018 2:24 pm
Is America headed toward a civil war? Sanders, Nielsen incidents show it has already begun
https://www.usatoday.com/story/opinion/2018/06/25/sanders-nielsen-incidents-suggest-new-us-civil-war-underway-column/729141002/
MASTERMIND on Fri, 29th Jun 2018 2:29 pm
Lnych
Peak oil is not a myth – The Royal Society of Chemistry
Current data for the decline in oil fields’ production indicates that around 3 million barrels per day of new production must be achieved year on year, simply to sustain supply levels. This is equivalent to finding another Saudi Arabia every 3–4 years. In this context, fracking is at best a stop-gap measure. Conventional oil production is predicted to drop by over 50% in the next two decades and tight oil is unlikely to replace more than 6%.
Once conventional oil’s rate of loss exceeds unconventional oil’s rate of production, world production must peak. Production of sweet, light crude actually peaked in 2005 but this has been masked by the increase in unconventional oil production, and also by lumping together different kinds of material with oil and referring to the collective as ‘liquids’. (More recently, the term ‘liquids’ is often upgraded to ‘oil’, which is highly disinformative since the properties of the other liquids are quite different from crude oil.)
https://www.chemistryworld.com/opinion/peak-oil-is-not-a-myth/7102.article
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
MASTERMIND on Fri, 29th Jun 2018 2:31 pm
Lynch
Projection of world fossil fuels by country (Mohr, 2015)
Over 900 different regions and subfuel situations were modeled using three URR scenarios of Low, High, and Best Guess. All three scenarios indicate that the consistent strong growth in world fossil fuel production is likely to cease after 2025. The Low and Best Guess scenarios are projected to peak before 2025 and decline thereafter. The High scenario is anticipated to have a strong growth to 2025 before stagnating in production for 50 years and thereafter declining.
https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015
Saudi Arabia ‘may run out of oil to export by 2030’
https://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9523903/Saudis-may-run-out-of-oil-to-export-by-2030.html
The collapse of Saudi Arabia is inevitable
http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679
Jerome Purtzer on Fri, 29th Jun 2018 2:34 pm
Let’s see, how do you deal with peak oil circa 2005? Bring on a giant Ponzi scheme aka shale oil, add a lot of secondary and tersiary drilling techniques with horizontal drilling and viola! Problem solved, for a little while, until it isn’t. Bring on Donald Trump, Fox Propaganda and friends and we are heading over the cliff full bore! Ain’t life great until it ain’t!
GregT on Fri, 29th Jun 2018 2:40 pm
“MM is a troll, Mike, and all the regulars here know it. He is obviously clinically insane.”
He is a pathological liar as well, which is also commonly associated with psychopathy.
MASTERMIND on Fri, 29th Jun 2018 2:47 pm
Greg
It must be hard to accept authority as truth, instead of truth as your authority..
GregT on Fri, 29th Jun 2018 2:55 pm
Internet Trolls Are Narcissists, Psychopaths, and Sadists
Trolls will lie, exaggerate, and offend to get a response.
https://www.psychologytoday.com/ca/blog/your-online-secrets/201409/internet-trolls-are-narcissists-psychopaths-and-sadists
MASTERMIND on Fri, 29th Jun 2018 3:00 pm
Edward Snowden describes Russian government as corrupt
https://www.theguardian.com/us-news/2018/jun/29/edward-snowden-describes-russian-government-as-corrupt
GregT on Fri, 29th Jun 2018 3:05 pm
“In this month’s issue of Personality and Individual Differences, a study was published that confirms what we all suspected: Internet trolls are horrible people.”
https://www.psychologytoday.com/ca/blog/your-online-secrets/201409/internet-trolls-are-narcissists-psychopaths-and-sadists
MASTERMIND on Fri, 29th Jun 2018 3:19 pm
Sorry Lynch your fake news has no power here!
https://imgur.com/a/snGqQ7O
LMFAO!
Boat on Fri, 29th Jun 2018 4:15 pm
Mm
Just like shortonoil your reasoning is just plain wrong. Lots of oil out there.
Could world economies get in serious trouble from a lack of oil and maybe even cause millions of deaths? Of course. But if the world cooperated could oil last for decades? Of course. Nobody has a resume that can accurately predict the future. Especially a brazen trash talking punk like yourself. Lol
MASTERMIND on Fri, 29th Jun 2018 4:42 pm
Boat
Lots of oil out there? Really funny we can’t find it.
Oil discoveries in 2017 hit all-time low –Houston Chronicle
https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php
And we have been consuming more oil than we have discovered since 1984. (see chart from Wood Mackenzie)
https://imgur.com/a/rBtIrfg
Sorry. boat facts matter
onlooker on Fri, 29th Jun 2018 5:06 pm
Boat, don’t tell me your an abiotic guy?
onlooker on Fri, 29th Jun 2018 5:19 pm
https://kingworldnews.com/alert-oil-spikes-to-highest-level-since-2014-as-global-markets-on-the-edge-of-panic/
Oil Spikes To Highest Level Since 2014 As Global Markets On The Edge Of Panic!
onlooker on Fri, 29th Jun 2018 5:23 pm
http://money.cnn.com/2018/06/28/investing/oil-prices-trump-iran-opec/index.html
Oil prices spike 13% in a week. What the heck is going on?
Kevin Cobley on Fri, 29th Jun 2018 7:16 pm
Oil reserves are finite if Oil is consumed then reserves must decline. It’s primary school child mathematics. It’s just a question of when the decline curve meets the demand curve when prices rise. Rising prices increase production from higher cost reserves and suppress demand. Once this situation is in play it becomes the dynamic governing the system.
Boat on Fri, 29th Jun 2018 7:53 pm
Onlooker
Canada lost 350,000 BPD and Nigeria more than that. Then Iran will lose sales soon if not already.
Boat on Fri, 29th Jun 2018 8:04 pm
Colby
https://oilprice.com/Energy/Crude-Oil/US-Outstrips-Saudis-In-Largest-Recoverable-Oil-Reserves.html
As you can see, plenty of oil.
Boat on Fri, 29th Jun 2018 8:11 pm
Colby
More to read
https://www.rystadenergy.com/newsevents/news/press-releases/2017-annual-oil-recoverable-resource-review
Boat on Fri, 29th Jun 2018 8:24 pm
The Norwegians know that provable reserves can be found in exhisting fields as wells are drilled. The best example being the Permian. Drilled for decades and now….bingo… the world’s best or 2nd best field.
Like shortonoil you will blather for years, be wrong and thankfully disappear.
MASTERMIND on Fri, 29th Jun 2018 8:25 pm
Boat
Not all energy is equal..
It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60 conventional wells. Ultra-light oil makes poor-quality gasoline that has to be put through an additional process (and cost) called catalytic reforming that boosts octane to sales specifications. And most crucial is that this light oil lacks the middle distillates needed to produce diesel and jet fuel. Those are the three biggest refined product markets so ultra-light oil has a lot going against it.
It’s not much of a substitute if it can’t do any substituting?
https://www.bloomberg.com/news/articles/2014-02-27/dream-of-u-s-oil-independence-slams-against-shale-costs
https://imgur.com/a/t7ulB
HSBC Global Bank: 81% of world liquids production already in decline and world oil shortages ahead
https://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
Peak U.S. Shale Could Be 4 Years Away
https://oilprice.com/Energy/Crude-Oil/Peak-US-Shale-Could-Be-4-Years-Away.html
Is Peak Permian Only 3 Years Away?
https://oilprice.com/Energy/Crude-Oil/Is-Peak-Permian-Only-3-Years-Away.html
Hedge fund star David Einhorn calls fracking companies a joke
http://money.cnn.com/2015/05/04/investing/david-einhorn-oil-fracking-terrible-investment/index.html
MASTERMIND on Fri, 29th Jun 2018 8:30 pm
Boat
All-Time Low For Discovered Resources in 2017: Around 7 Billion Barrels of Oil Equivalent https://www.rystadenergy.com/newsevents/news/press-releases/all-time-low-discovered-resources-2017/
Oil Discoveries at 70-Year Low Signal Supply Shortfall Ahead
https://www.bloomberg.com/news/articles/2016-08-29/oil-discoveries-at-a-70-year-low-signal-a-supply-shortfall-ahead
Shale can’t make up for all the worlds declining conventional legacy fields, plus increased global annual demand..
MASTERMIND on Fri, 29th Jun 2018 8:32 pm
Looks like the question is not what happened to peak oil..But what happened to Michael Lynch!
I run these parts you neckbeared weirdo..
LMFAO!
JuanP on Fri, 29th Jun 2018 10:20 pm
Boat “Then Iran will lose sales soon if not already.”
I also think that Iran will lose some sales and I don’t know if they have already or not, but it may not necessarily happen. So far, the EU, Japan, Turkey, South Korea, India, and China, have all issued statements saying that they intend to continue buying oil regardless of the illegal unilateral US sanctions against Iran and threats of indirect sanctions against buyers of Iranian oil. I expect some of these institutions to backdown when faced with increased pressure from the USA. Others, though, may pick up the slack, particularly China, which may need oil to replace the 320,000 bpd it is currently buying from the USA and may be subject to counter sanctions in the short term future.
Makati1 on Fri, 29th Jun 2018 11:17 pm
China and Russia are both going to back Iran totally. They have already set up a financial system to get around the USD. I don’t expect Iran to suffer much this time around. The Jewnited States has been trying to kill its ally’s economies lately and it is being noticed all over the world by other nations. The Jew-S is isolating itself as it self destructs. The Great Leveling…
Cloggie on Fri, 29th Jun 2018 11:59 pm
“Oil reserves are finite if Oil is consumed then reserves must decline. It’s primary school child mathematics.”
The time to set up a renewable energy base is finite as well (15-30 years), hence declining oil reserves are not a problem. Primary school mathematics.
Anonymous on Sat, 30th Jun 2018 11:55 am
Kevin Cobley, that implies you know the starting amount of oil accurately and not overconservatively. The past history of peakers is to always underestimate the size of the resource. This happens because (1) they don’t consider how technology, economics, and exploration enable new resource, not currently in reserves to be accessed and (2) they would hate to list far off peaks from a truly encompassing view of the resource (e.g. all non-living hydrocarbon). Near term is more scary exciting, more in keeping with their political slants.
Dredd on Sat, 30th Jun 2018 3:56 pm
“What Ever Happened To Peak Oil?”
One of the main answers: “Blind Willie McTell News” …
spike on Sun, 1st Jul 2018 9:59 am
Oh, J, I mean Mastermind, I apologize for not recognizing your lurid prose. I can’t debate you because you don’t know the subject, but I will make one attempt here before I get to the other comments.
You mention that oil discoveries in 2017 were at an all time low. Here’s the problem with you.
1) You are stating a fact and assuming a result. This is not proper analysis. Any one can find facts they like on the internet.
2) You don’t seem to understand the difference between discoveries and reserves additions.
3) You are assuming causality without considering the independent variables carefully. Discoveries would appear to be low not because there is nothing to find, but because a) the glut of oil drove down prices and exploration expenditures, and b) adding reserves in shale areas is often cheaper than NFWs.
More later (for the more serious discussants), but it’s Sunday and I’m going to the movies.
Mike
MASTERMIND on Sun, 1st Jul 2018 10:37 am
Lynch
The End of the Oil Age is Imminent!
Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.
http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017
What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.
https://imgur.com/a/6dEDt
Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.
Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.
MASTERMIND on Sun, 1st Jul 2018 10:45 am
Lynch
Oil discoveries peaked in the 1960’s and have declined ever decade since..And we have consumed more oil than we have discovered since 1984..
https://imgur.com/a/6dEDt
You can argue all the red herrings you want..That won’t change the facts..
A red herring is something that misleads or distracts from a relevant or important issue. It may be either a logical fallacy or a literary device that leads readers or audiences towards a false conclusion..
https://en.wikipedia.org/wiki/Red_herring
Now go back to your cave you ugly neckbeared loser..
LMFAO!
MASTERMIND on Sun, 1st Jul 2018 10:49 am
Lynch
IEA Chief warns of world oil shortages by 2020 as discoveries fall to record lows
https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000
Saudi Aramco chief warns of looming oil shortage
https://www.ft.com/content/ed1e8102-212f-11e7-b7d3-163f5a7f229c
Saudi Arabia’s Energy Minister Warns of World Oil Shortages Ahead
https://www.wsj.com/articles/saudi-minister-sees-end-of-oil-price-slump-1476870790
Halliburton CEO says oil will spike due to oil shortages by 2020 after Industry Cuts
https://www.bloomberg.com/news/articles/2017-07-12/halliburton-sees-2020-oil-spike-after-industry-cuts-2-trillion
World Oil Shortages To Lead To Oil Price Spike By 2020s, warns Goldman Sachs
http://oilprice.com/Latest-Energy-News/World-News/Supply-Crunch-To-Lead-To-Oil-Price-Spike-By-2020s-Expert-Says.html
2020s To Be A Decade of Disorder For Oil
https://oilprice.com/Energy/Energy-General/2020s-To-Be-A-Decade-of-Disorder-For-Oil.html
Are We Sleepwalking Into The Next Oil Crisis?
https://oilprice.com/Energy/Energy-General/Are-We-Sleepwalking-Into-The-Next-Oil-Crisis.html
MASTERMIND on Sun, 1st Jul 2018 10:51 am
Peak oil is not a myth -The Royal Society of Chemistry
https://www.chemistryworld.com/opinion/peak-oil-is-not-a-myth/7102.article
The future of oil supply –The Royal Society of Science http://rsta.royalsocietypublishing.org/content/372/2006/20130179.short
A global energy assessment (Jefferson 2015)
https://onlinelibrary.wiley.com/doi/pdf/10.1002/wene.179
Oil’s Tipping Point Has Passed (James Murray & Sir David King 2012)
https://www.scribd.com/document/375500703/Climate-Policy-Oil-s-Tipping-Point-Has-Passed-Murray-King-2012
Projection of World Fossil Fuels by Country (Mohr, 2015)
https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015
Economic Vulnerability to Peak Oil (Kerschner 2013)
https://www.scribd.com/document/375485924/Economic-Vulnerability-to-Peak-Oil-Kerschner-et-Al-2013
Forecasting OPEC crude oil production using a variant Multicyclic Hubbert Model (Ebrahimi 2015)
https://www.sciencedirect.com/science/article/pii/S0920410515001539
Aging giant oil fields produce more than half of global oil supply and are declining (Hook, 2009)
http://www.sciencedirect.com/science/article/pii/S0301421509001281