[KevO]

Eighty-five million barrels a day.

That’s the world’s current production of crude oil…and that may very well be close to the world’s PEAK production of crude oil. Although the recession caused a temporary decrease in consumption, demand is already bouncing back toward pre-crisis levels. Too bad production isn’t.

“Can’t we get more than 85 million barrels?” some folks are bound to wonder. Let’s look into that…

A couple weeks ago, I attended the 2009 international conference of the Association for the Study of Peak Oil and Gas (ASPO), out in Denver. Here’s the long and short of it. We’re in trouble. With a capital “T,” and that rhymes with “P,” and that stands for Peak Oil. By every measure, the world’s output of crude oil peaked between 2005 and 2007.

Yes, the worldwide total output of what we generically call “oil” has risen – slightly – in recent years. But that’s because there are increasing volumes of natural gas liquids (NGLs) in the mix, plus unconventional oil like what the global marketplace obtains from Canada’s oil sands. But the production of oil – actual oil – has peaked already. The future of conventional petroleum output is downhill, even with the future output from the deep-water offshore discoveries.

“There’s no such thing as West Texas Intermediate [WTI] oil anymore,” Peak Oil apologist, Matt Simmons, moaned to the ASPO conference attendees. Instead, the pipeline crossroads like Cushing, Okla., have become little more than “crude oil pharmacies.”

In other words, as the quality of the crude from the traditional US oil patch continues to degrade, oilmen must mix and match their product with “sweeter” forms of crude if they hope to sell it as the premium-priced WTI. Thus, operators at Cushing take whatever oil they can obtain from one place, plus whatever oil they can obtain from another place. They mix and match, and blend it all with synthetic crude from Canada. Maybe they add some imported oil juice and then send it down the line as WTI.

Along these same lines, Venezuelan economist Carlos Rossi stated to ASPO his analysis of oil trends in the US. “You are worried about your foreign oil imports now,” he said. “You in the US import about 65% of your oil today. You don’t like it. But if you follow the clear trends, by 2025, you’ll be importing about 92% of your oil. You’ll like that even less.” No doubt.

The market meltdown and world recession of the past year has bought some time. But the planet is still staring at an energy problem that’s coming down the tracks like a runaway freight train.

Sure, there’s a lot more oil “out there”…as in WAY out there – 150 miles offshore, beneath 8,000 feet of water and 20,000 feet of rock and salt. Yes, that offshore resource is out there, but it’s super hard to extract.

And so what? Aren’t the world’s oil companies busy developing these massive offshore deposits? Yes, but this development will take decades. It’ll take time and capital and expensive cutting-edge technologies, some of which are barely commercially viable.
http://www.energybulletin.net/50525

[ian807]

Yup. Capital T all right for a number of reasons.

The even more entertaining fact other than inevitable price increases and declining EROEI is the fact that long before then, places like Russia, Iran, Venezuela and even Saudi may decide to start keeping all or at least most of their oil for domestic use, causing very sudden, very high, price spikes, that would most likely bring down numerous world economies very suddenly.

Hoping for that magical technical breakthrough......

[misterno]

The current worldwide crude oil production is NOT 85MM BBL/day, that is the total liquid production

The correct value is somewhere around 73MM

[ian807]

The current worldwide crude oil production is NOT 85MM BBL/day, that is the total liquid production The correct value is somewhere around 73MM

Thanks. I'm feeling better already.

[KevO]

that's even worse right?

[shortonsense]

The current worldwide crude oil production is NOT 85MM BBL/day, that is the total liquid production The correct value is somewhere around 73MM

If it can go into my tank and provide forward motion, be burned in liquid form to heat a house, why the heck does it even matter?

[shortonsense]

Because those other "liquids" require more petroleum-btu's to produce then they provide. That is double-dipping and very bad accounting.

More EROEI < 1 impossibilities being converted into honest work, measured in the millions of barrels a day of product. Fine by me then I guess.

[Tanada]

The current worldwide crude oil production is NOT 85MM BBL/day, that is the total liquid production

The correct value is somewhere around 73MM

If it can go into my tank and provide forward motion, be burned in liquid form to heat a house, why the heck does it even matter?

Because those other "liquids" require more petroleum-btu's to produce then they provide. That is double-dipping and very bad accounting.

Yet another wildly inaccurate claim. NGL's are very energy dense and have excellent EROEI while Bitumen sand recovery varies from 3:1 up to 7:1 depending on the method of recover used.

[yesplease]

That's still incorrect. At worst you could say we require more btus from coal, natural gas, nukes, hydro, and oil all combined, to get however many btus from corn ethanol, but in terms of ethanol's inputs, we get way more ethanol btus out than the petroleum based btus we put in.

[yesplease]

You are correct that some energy input into ethanol production is electricity generated from other fossil fuels. However the particular data you linked to is supsect. I got as far as the comparison between different biofuel (I ignore the Dale Fieffer reference.) and lost interest. Any study that simply assumes distillers grains and soymeal byproducts to be energy credits is suspect.

You should probably examine something thoroughly before dismissing it. There are two cases, one w/ the co-products, and one w/o.

In either case, a btu of ethanol doesn't require a btu of petroleum. It, roughly speaking, requires a btu of natural gas (fertilizer), electricity from various sources, and liquid fuels/products from petroleum even if you don't count the co-products and look at the corn ethanol outputs/inputs on the right portion of the graph.

These studies fail to account for the energy cost of actually using the byproducts--drying, bagging, shipment, etc.

If those co-products aren't used, then some grain, likely corn, will have to be dried, bagged, shipped, and so on, for feed anyway, so if you include those then you'll end up double counting the energy requirements for feed since the co-products would end up displacing grain that has to go through the same processes anyway. I suppose you could prorate them depending on how much more or less energy growing grain instead of using the co-products would require, but you shouldn't do the same thing you're complaining is being done.

Regardless, ethanol has been proven a failure as a petroleum replacement, and is merely another in a long line of misplaced, destructive, polluting gasoline additives. Which was worse? The MBTE that replaced lead, or the newest corn ethanol which competes with food in a hungry world. I am not interested in any of these lesser evils. I long ago chose the alternative.

Just like you think we should all drive around in 10,000lb electric SUVs, and that the study by CNW marketing is valid? C'mon Peter, do you really expect people to believe you're into the alternative when you're backing BS marketing and suggesting we should all run around in ~10,000lb electric SUVs?

[evilgenius]

The energy return on energy input question aside, not too far aside, this points out the next place to look, conservation. The big recession is still winding its way, decreasing demand as it goes. Even if it continues on to eclipse Great Depression levels a change to efficiency at the consumption level will have to come about as a matter of course. Obviously this will have to mean something more than cash for clunkers. It will have to mean hybridization and new types of engines, maybe smaller across the board - certainly more efficient. The next crunch could be at the battery end of commodities as the world hits a manufacturing barrier for lithium-ion batteries. Equally, we could fail to even try and hope for the deep sea bounce, but what is that 5-10 years of steeply tailing production and that not for another 8-15 years?

[shortonsense]

The big recession is still winding its way, decreasing demand as it goes.

Not any more it isn't.

Even if it continues on to eclipse Great Depression levels a change to efficiency at the consumption level will have to come about as a matter of course.

This one certainly won't. We can always hope for the double dip coming around and being bad? I mean, if you are into that sort of enthusiasm.

The next crunch could be at the battery end of commodities as the world hits a manufacturing barrier for lithium-ion batteries. Equally, we could fail to even try and hope for the deep sea bounce, but what is that 5-10 years of steeply tailing production and that not for another 8-15 years?

I think we'll be waiting a long time for "steeply tailing production", to date we have claims of some number of field declines being X%/year, and yet when we watch some of the larger area's like the US decline, thats not what happens.

[shortonoil]

evil said:

The energy return on energy input question aside, not too far aside, this points out the next place to look, conservation. The big recession is still winding its way, decreasing demand as it goes.

The world's economies are now running on central banks' immense QEs. The US, EU and China are now injecting about 20% of their GDPs in the form of unbacked, printed cash. The $100 billion reverse repro auction failure of the FED last week means that this huge injection of money is not going to continue for very long. M2 money velocity is falling like a rock. When the CB's are forced to stop the QE, expect a downward decline to spiral into a 20 to 40% decline in the general economy.





Available Energy

[evilgenius]

evil said:

The energy return on energy input question aside, not too far aside, this points out the next place to look, conservation. The big recession is still winding its way, decreasing demand as it goes.

The world's economies are now running on central banks' immense QEs. The US, EU and China are now injecting about 20% of their GDPs in the form of unbacked, printed cash. The $100 billion reverse repro auction failure of the FED last week means that this huge injection of money is not going to continue for very long. M2 money velocity is falling like a rock. When the CB's are forced to stop the QE, expect a downward decline to spiral into a 20 to 40% decline in the general economy.




Available Energy

Yeah, so if that happens what it means is that there would be no money available for investment in conservation, except the kind that comes strictly from a lack of money. There would be damn little money left for exploration either, especially the expensive kind like deep sea exploration. What's left, why exploiting the existing, of course. Daring gambles are in the cards for the US and its military if we fail at this. Iraq and Afghanistan are just the beginning of the game. All of this at a time when expensive military action had better not go wrong because we can't afford to try it twice. These are interesting times.

[evilgenius]

The big recession is still winding its way, decreasing demand as it goes.

Not any more it isn't.

And when the figures are revised....? What about if you take out government spending? All the same, we are in some kind of a recovery. Will it extend to jobs? I hope so.

Even if it continues on to eclipse Great Depression levels a change to efficiency at the consumption level will have to come about as a matter of course.

This one certainly won't. We can always hope for the double dip coming around and being bad? I mean, if you are into that sort of enthusiasm.

There certainly is a danger of it. The normal economic activity that you would expect to take up the increase in the money supply, to absorb the increase in government spending is not taking place. Credit is still tight. There has been a lot of difficulty trying to figure out what the new credit economy should look like. I hope they don't take too long deciding.

The next crunch could be at the battery end of commodities as the world hits a manufacturing barrier for lithium-ion batteries. Equally, we could fail to even try and hope for the deep sea bounce, but what is that 5-10 years of steeply tailing production and that not for another 8-15 years?

I think we'll be waiting a long time for "steeply tailing production", to date we have claims of some number of field declines being X%/year, and yet when we watch some of the larger area's like the US decline, thats not what happens.

This reminds me of what happened in Texas. M. King himself originally called the peak for a certain time and largely he was right. He was right at the time. If you start using statistics from years after the 'peak' you get an illusion where the actual peak seems to move forward in time. Now, this is an illusion because the factors that seemingly move the peak (like horizontal drilling) didn't exist when the economic decisions surrounding the original time had to be made, nor could they be imagined. Interestingly, as well, those factors were not enough to move the 'peak' up to or ahead of the time of the introduction of those factors, only to move the calculation for the time of the 'peak' forward. I have called this phenomenon a 'trailing peak' in the past. Probably there is a better term for it somewhere. Texas is still producing oil, and a lot of it too, so no, it doesn't mean that at the peak you fall off of a cliff. It does mean that the steepest declines tend to take place then, though.

[shortonsense]

The big recession is still winding its way, decreasing demand as it goes.

Not any more it isn't.

And when the figures are revised....? What about if you take out government spending? All the same, we are in some kind of a recovery. Will it extend to jobs? I hope so.

Has there ever been a 3%+ revision, in either direction? That would be quite a swing. I'm willing to admit its a possibility of course. As far as the government spending, well, those buggers sure did enough of that.

The normal economic activity that you would expect to take up the increase in the money supply, to absorb the increase in government spending is not taking place. Credit is still tight.

Might be for someone wanting to take out a loan for CRE with Chase, but people are certainly buying houses, and I've collected my share from the credit union since this mess began more than a year ago. They appear to want to collect some market share in the auto-credit market.

But tight just appears to mean, "no 120% liar loans, no carry on car loans, you'll pay 2% more than you used to", etc etc. Thats what it was SUPPOSED to be, returning to normal isn't really "tight credit" I would think.

[shortonoil]

evil said:

Yeah, so if that happens what it means is that there would be no money available for investment in conservation, except the kind that comes strictly from a lack of money. There would be damn little money left for exploration either, especially the expensive kind like deep sea exploration. What's left,

Trillions in pseudo-digi-dollars will go poof! Credit as we know it will dissapear into a cloud of electronic haze. The end of the oil age will not arrive as a result of us running out of oil; it will arrive because we will no longer be able to afford to maintain the system that provides it.

That is what we will call Peak Oil!

And when the figures are revised....? What about if you take out government spending? All the same, we are in some kind of a recovery. Will it extend to jobs? I hope so.

The FED has already spent $24 trillion to save the banking system and give us the appearance of a 3.5% growth rate for this quarter; that was with massive job loss and foreclosure numbers attached. No amount of printed currency will solve this problem, this is not a currency problem. It is a resource problem!



Available Energy