[eXpat]

Washington considers a decline of world oil production as of 2011

The U.S. Department of Energy admits that “a chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 “if the investment is not there”, according to an exclusive interview with Glen Sweetnam, main official expert on oil market in the Obama administration.

This warning on oil output issued by Obama’s energy administration comes at a time when world demand for oil is on the rise again, and investments in many drilling projects have been frozen in the aftermath of the tumbling of crude prices and of the financial crisis.

Glen Sweetnam, director of the International, Economic and Greenhouse Gas division of the Energy Information Administration at the DoE, does not say that investments will not be “there”. Yet the answer to the issue of knowing when, where and in which quantities additional sources of oil should be put on-stream remains widely “unidentified” in the eyes of the most prominent official analyst on energy inside the Obama administration.

The DoE dismisses the “peak oil” theory, which assumes that world crude oil production should irreversibly decrease in a nearby future, in want of suffisant fresh oil reserves yet to be exploited. The Obama administration of Energy supports the alternative hypothesis of an “undulating plateau”. Lauren Mayne, responsible for liquid fuel prospects at the DoE, explains : “Once maximum world oil production is reached, that level will be approximately maintained for several years thereafter, creating an undulating plateau. After this plateau period, production will experience a decline.”

http://petrole.blog.lemonde.fr/2010/03/25/washington-considers-a-decline-of-world-oil-production-as-of-2011/
That is as close as they can come and admit PO.

[SilentRunning]

The DoE dismisses the “peak oil” theory, which assumes that world crude oil production should irreversibly decrease in a nearby future, in want of suffisant fresh oil reserves yet to be exploited. The Obama administration of Energy supports the alternative hypothesis of an “undulating plateau”. Lauren Mayne, responsible for liquid fuel prospects at the DoE, explains : “Once maximum world oil production is reached, that level will be approximately maintained for several years thereafter, creating an undulating plateau. After this plateau period, production will experience a decline.”

So The DoE dismisses a theory that they basically agree with - subject to a minor quibble about the peak shape.

[sparky]

.
there is method in the blindness , it's true and will be for a long while that production could be increased by throwing trillions for the extra barrels
but Peak Oil is about " natural " economics , not government sinking in debt to support production

.

[Plantagenet]

First Obama's DoE expert on oil radically changes his past position and essentially comes out and endorses the concept of an imminent Peak in Oil production.

Then Obama announces he supports opening up offshore zones in Virginia, Florida, etc. to oil drilling.

Looks like the Obama administration just realized the oil is running out, and shifted towards a "drill baby drill" energy policy.

[pup55]

This huge U.S liquid fuel production increase should be achieved through what Glen Sweetnam described as “the ethanol ramp-up” during the round-table, according to its
transcript.

This “ethanol ramp-up”, initiated during the Bush administration, may stand for even more than the 1.8 Mbpd increasing expected by the DoE, as U.S crude oil extractions have been decreasing for four decades, and because there are no fresh oil reserves of significant scale coming on-stream in Alaska or elsewhere in the ‘Lower 50s’.

One-quarter of all the grain crops grown in the United States already ends up as biofuel, according to an analysis of 2009 figures from the US Department of Agriculture published by the Earth Policy Institute, a Washington ecologist think-tank.

This is great! I think we said awhile back that one-quarter of our corn crop is already being used to supply 17 days worth of fuel, I suppose I should recalculate that to figure out if it is still true or not.... and the price still got up to $147 per barrel at the time of maximum demand.

And, as a further side point: Did this $147 per barrel touch off a revolution in exploration or an expansion in drilling? No, I suppose not, so to fill that gap, prices are going to have to be a lot higher than that particularly in light of the current FUBAR state of the financial system in which no one is compensated for risk.

What a mess. .

[pup55]

The prospects of the Washington Department of Energy on oil now sound far more pessimistic than the kind of analysis the DoE used to release not so long ago. In 2004, under the Bush administration, the DoE published a study in which oil production was supposed to be able to rise strongly at least until 2037.

Sorry to double-post but I am compelled to rant about this a little. The massaging of data, making rosy-scenario assumptions, and whitewashing of government reports has gone on for some time as we well know.....

But can you see how dangerous it is to politicize this kind of analysis? What you're saying is, that your near-term outlook on the future, along with all of your contingency planning, is 100% dependent on some political hack in the white house dictating the report to you so as to either make the previous party in power look bad, or make your own party look good. The unemployment numbers as well as the GDP estimates are being massaged just as badly or even worse, because of course they are more widely followed.

Chances are, the best of this data is coming from elsewhere, like the CIA, for example, or the DoD, and the "truth" as it were, is never seeing the light of day.

BTW both parties are equally guilty of this. It ought to be a felony to massage this data. It makes any kind of sane government policy change practically impossible.

[Daniel_Plainview]

The DoE dismisses the “peak oil” theory, which assumes that world crude oil production should irreversibly decrease in a nearby future, in want of suffisant fresh oil reserves yet to be exploited. The Obama administration of Energy supports the alternative hypothesis of an “undulating plateau”. Lauren Mayne, responsible for liquid fuel prospects at the DoE, explains : “Once maximum world oil production is reached, that level will be approximately maintained for several years thereafter, creating an undulating plateau. After this plateau period, production will experience a decline.”

So The DoE dismisses a theory that they basically agree with - subject to a minor quibble about the peak shape.

Indeed, the DoE is internally inconsistent, as modern PO theory embraces the notion of an undulating plateau for global conventional crude production. The concept of a discrete "peak" applies only to a single oil field.

So, not only has the DoE officially embraced modern PO theory, but they have set a date of 2011-2015 for PO to occur. Obama better get busy drilling off America's coasts .... because 2011 is only one year away!

[Arthur75]

By the way just read the transcript of the conference (April 2009) that above blog post link to :

http://www.eia.doe.gov/conference/2009/ ... ssion3.pdf

and the slides :

http://www.eia.doe.gov/conference/2009/ ... eetnam.pdf

One really "impressive" thing in these slides is the US increasing their all liquids production by 1.8 million barrel/day from 2007 to 2015, and from the transcript, it appears that this would come from unconventional, biofuels ethanol in particular (as also said above):

Mr. González-Pier: Glen, I have a question about the United States production forecast.
Mr. Sweetnam: Yes, yes.
Mr. González-Pier: Where is the extra production in the U.S. coming from?
Mr. Sweetnam: So then U.S…extra production is coming from…
Mr. González-Pier: Non-conventional.
Mr. Sweetnam: … the deepwater (Gulf of Mexico) and also from enhanced oil recovery. And then biofuels because this is sort of total liquids. So it’s those three components.
Mr. Knapp: And maybe a little oil shale.
Mr. Sweetnam: Yes, right,…

page 28

and :

This is total liquids so the
U.S. with total liquids of a little over 8 million barrels a day we expect an increase of 1.8 million barrels a day over this timeframe. That’s including the ethanol ramp-up. So we look at that, you can see how important Brazil is in the picture overall.

page 20

The transcript is a bit strange, with Mr Gonzalez answering his own question ... , would be interesting to get the "tone" of this exchange (to get a feel of whether they bielieve in their figures or not), but the link to the audio file in below page :

http://www.eia.doe.gov/conference/2009/session3.html

doesn't work for me, same for everybody ?

[sparky]

.

Well a bit of double-speak is the usual way for a public servant to send signals while sticking to the scrip the EIA , like the IEA has internal variance about the world production prospect
there is plenty of indices that we are around the peak or rather the bumpy sloping plateau

the present economic difficulties are confusing the numbers while hiding the crisis
no point in stirring the good folks , governments now need rosy news .
and explorers need plenty of money which is not that much forthcoming

.

[TheDude]

Ethanol Percentage Of Corn Crop Used For Ethanol. RFS goals are for conventional ethanol to be a smaller percentage from here on out, to be supplemented first by Advanced biofuels, i.e., sugar cane ethanol - courtesy recently revised definition of this term - i.e., we will import more, presumably after abandoning tariffs - then down the road by more cellulosic, assuming Operation Strawgrass can get off the ground in the first place. Corn, aka "Renewable" biofuel, peaks at 15k mg in 2015 and stays at that level thereafter - ca. 55% of the total crop.

Oh bloated bureaucracy, will you ever learn?

[eXpat]

From the original article

The U.S DoE expects that the largest increase of production will need to come from within the United States : a 1.8 Mbpd boost over 8 years (from 2007 to 2015) that would equal to more than a quarter of the present U.S oil production. Since the early 70’s, U.S oil production has been steadily plummeting.

Well, it seems that they plan to put their money where their mouth is:
Government set to unveil offshore drilling plan

Reuters) - The Obama administration is expected to announce by Wednesday its updated plan for oil and natural gas drilling in U.S. waters, including whether to allow exploration for the first time along the U.S. East Coast.
The plan could pave the way for a significant new domestic source of energy, helping to reduce U.S. dependence on oil imports and boost supplies of natural gas used to displace coal in power plants as the country works to reduce emissions of climate-changing greenhouse gases.

Last month, Interior Secretary Ken Salazar said he wanted to release the updated drilling plan by the end of March.

Two industry sources said on Monday President Barack Obama was expected to give a speech about energy security on Wednesday, which could include his views on expansion of offshore drilling.

http://www.reuters.com/article/idUSTRE62T06520100330
Pay attention folks, US is scratching the pan, after that is used up...

[mos6507]

This article is being overplayed by peakers. I really don't think it's the open confession of peak oil that it's being sold to be. This is coming and going without making its way out of the doomer echo chamber (heatingoil.com, countercurrents.org, etc...). The Richard Branson stuff made it further up the flagpole.

[Sixstrings]

This article is being overplayed by peakers. I really don't think it's the open confession of peak oil that it's being sold to be. This is coming and going without making its way out of the doomer echo chamber (heatingoil.com, countercurrents.org, etc...). The Richard Branson stuff made it further up the flagpole.

Well.. they're just framing the decline as the result of "lack of investment." When the decline becomes obvious, expect massive bailouts to the oil companies, tax breaks, taxpayer money galore. Exxon will be rolling in cash, but all the money in the world still won't create another Saudi Arabia.

[Plantagenet]

....all the money in the world still won't create another Saudi Arabia.

Probably not, but it will be interesting to see the oil exploration in the Arctic Ocean in 20-30 years when the sea ice is gone. Thats about the last huge, unexplored region on earth with some really good hydrocarbon potential.

[sparky]

.
Plantagenet , the ice might still be there but no matter , they will drill for it in a blizzard

Sixstrings is right , a massive amount of public money spend on further research can be expected when we hit the crest of the production ridge
this also would be tax breaks , ecological exemption , funny financial vehicles for joint partnerships
this kind of things


.

[pup55]

Corn, aka "Renewable" biofuel, peaks at 15k mg in 2015 and stays at that level thereafter - ca. 55% of the total crop

Not necessarily, as Inspector Clouseau used to say....

It looks like we hit "peak corn" in 2008..

[mcgowanjm]

....all the money in the world still won't create another Saudi Arabia.

Probably not, but it will be interesting to see the oil exploration in the Arctic Ocean in 20-30 years when the sea ice is gone. Thats about the last huge, unexplored region on earth with some really good hydrocarbon potential.

What's amazing here is that we'll Have the Arctic to produce out of.

That the Arctic goes ice free by 2013, something not happening in millions of years, we have Zero idea of what an Ice Free Arctic acts like.

And of course in 20-30 years there will be 2 billion fewer humans on the planet.

I'm waiting to see what the next Cat 5 does to Shell's Perdido Spar
located 200 miles SE of Freeport. Like Thunderhorse, we'll never see the pics.

[AirlinePilot]

Im finding this all rather bizarre just about now. We have climbing oil prices in light of good storage numbers and significant US demand cutbacks. We have several slightly fringe energy sites/blogs calling BS on OPEC/Saud reserve estimates. We have some recent articles talking about blatant obfuscation in the energy industry. By all normal and "credible" sources there IS NO PROBLEM with oil other than speculators!

We have a political situation which we have not seen since Carter's days in which a progressive/socialist administration seems poised to railroad as many programs through during its tenure as possible. Now they come out and say..hey! Lets Drill man!! It will be good for all and set us up on the road to energy independence!

We know here that never happens..but do they? I think yes, they understand the ramifications of what Hirsch found. They know things we dont..like how much oil does King Saud really think he can extract and what the probable production picture will be in ten years. They are now panicking as reality sets in..or maybbe not..could be all political baloney too. It just sems bizarre right now.

So..they start softballing what most of us have come to know as probably the defining crisis modern man will face...and my guess is they will screw it up just like everything else they have tried to "fix" over the last 30 years.

No real energy policy to date..no plan A ..which should have started 25 years ago...and now the wolf is at the door. Bizarro world IS arriving. I'm personally prepared to witness things we have never seen before in the United States and Im ready for my Government to completely screw this up twelve ways to Sunday resulting in the mess we all know will come as they try desperately to hide the real horror of decline without mitigation from an unprepared and unwilling to change populace.

This is just the beginning. Its going to be fun to watch!

Of course this also could be nothing more than posturing in a political game to pass a massive Cap and Trade plan too. Interesting times!

[TheAntiDoomer]

This is just the beginning. Its going to be fun to watch!

LMAO and you still want to convince me and OF2 you are not a doomer after that quote!

[TheDude]

Corn, aka "Renewable" biofuel, peaks at 15k mg in 2015 and stays at that level thereafter - ca. 55% of the total crop

Not necessarily, as Inspector Clouseau used to say....

It looks like we hit "peak corn" in 2008..

Qué? Jan 2010 was 13028.4 mg vs Jan 2009 10,569.4 mg capacity. Maybe we've peaked in terms of harvest size but I'm not interested in trivial things like that...forget 3rd world tortilla prices, we need cheap fuel...RFA - The Industry - Statistics Sure looks like they'll just keep distilling that stover until the cows literally come home. Biofuels have been much more responsive to price than C+C or unconventional. Wouldn't be surprised to see more 3rd world nations following the Brazilian lead in converting more of their farm land into sugar cane plantations for distilling moonshine for Happy Motoring gringos, either, especially when that tariff is abandoned. I feel a lot more comfortable about that happening than making a Simmons style $10k bet on 2010's WTI price.

This is just the beginning. Its going to be fun to watch!

"Going to be"? Response of pols in summer '08 couldn't be topped for its surreal qualities. Anything sufficed as a response so long as it didn't involve asking constituents to make sacrifices in any manner. It's been quite the roller coaster ride so far and we can see the bolt holding the carriage onto the frame coming looser and looser...