[wallythacker]

Has the board discussed this before?

According to the DOE at this link:

http://www.eia.doe.gov/oil_gas/natural_ ... es/cr.html

There's 22.3 bn barrels left. At current usage rates of 9 mn bbl/day the US has 2478 days of oil left. That's 6.78 years.

I'm being generous as you can see the DOE has revised the reserves number. If I use 20 bn barrels as the reserves there's only 6 years of domestic oil left.

I'm not a doomer, peaker, birther, truther, oiler, whatever. I believe in math and math says the US domestic production has been in decline from the 70's and US domestic production will be negligible in 2018. Look to Mexico for an example of a country that peaked and is in serious decline. It's ugly. Many Mexicans were poor to begin with so stayinh poor isn't the end of their world. Most Americans have had a pretty good life and are unprepared to living as a poor person.

If everything stays constant in terms of current US oil consumption the US will become 100% dependent on imported oil in roughly 7 years. Now, if there are major changes on the horizon, like WW3 or the current recession becomes a full blown world wide depression with nobody working then all bets are off. If things get really bad demand destruction will take care of oil consumption. If the world is at war I envisage a future with oil rationing and only the military has unlimited access to oil.

So, if we maintain the status quo, avoid a worldwide depression and don't start WW3 the I have the following questions.

1. How is the US going to ensure they have access to the needed 9 mn bbl/day when domestic production stops? Which of the following is most likely to be the dominant method to ensure access to foreign oil?
a) Politics
b) money
c) force
d) a combination of the above

2. Where is the additional 9mn bbl/day to replace the US domestic production going to come from? Isn't the world producing at or near capacity now?

3. Who is going to lose their share of oil to satisfy the US demand for 9 mn bbl/day? China? India? Europe? What are losing countries going to do in return?

4. What is the US going to look like as a society when 100% imported oil is the only way of life?
a) better because lifestyles will change to reflect a new way of living.
b) welcome to Mad Max living.

[Pops]

Hi Wally, steady man.

The US itself produces no oil, never has. Corporations lease land from the government and individual landowners, extract it and sell it on the world market. The only reason we get a good deal is because it takes less transport and most oil is sold in US$ and that gives some advantage.

The US depends 100% on the "free market" now and that will continue for a while yet.

Of course we need to spend more money on defense than however many other nations combined to make sure the markets (like Iraq) stay "free".


As to your other questions, they are what we've been speculating about here lo these past many years.

[Novus]

Domestic production will never completely stop. Oil is still being pumped in Pennsylvania 150 years after the first commercial oil well though not in significant quantities. Peak Oil is not about oil running out but rates of extraction declining after reaching a peak. Oil formations are not like oil tanks that can simply be emptied but more like an oily damp sponge.


There are a lot of good books on the subject that are worth reading.

[misterno]

funny thing is us oil production has been rising steadily due to high oil prices. I think we had the most production in 2010 since 1973.

All because of high prices. The higher the price is, investors are pouring more money in wells that were not producing for many years.

[kublikhan]

Has the board discussed this before?

According to the DOE at this link:

http://www.eia.doe.gov/oil_gas/natural_ ... es/cr.html

There's 22.3 bn barrels left. At current usage rates of 9 mn bbl/day the US has 2478 days of oil left. That's 6.78 years.

I'm being generous as you can see the DOE has revised the reserves number. If I use 20 bn barrels as the reserves there's only 6 years of domestic oil left.

That's not what the DOE/EIA forecast. They claim the US will be producing about as much oil in 2025 as we are now:

[Pops]

funny thing is us oil production has been rising steadily due to high oil prices. I think we had the most production in 2010 since 1973.

All because of high prices. The higher the price is, investors are pouring more money in wells that were not producing for many years.

Let this be your first lesson at po.com Walley, everyone gets to play, whether they are uninformed, simply ignorant or intentionally trying to mislead we don't make much distinction, that's up to you. misterno for example claims to work in the "energy industry" in Houston yet is either in complete denial of the US peak (which is one of maybe 10 basic facts everyone here should know), or for reasons of his own knowing wishes to lead you to think everything is fine and in fact US oil production is... what was that again? Oh yea, here it is:

I think we had the most production in 2010 since 1973.

Just a suggestion, click on misterno's nickname by his avatar and in the next window click on "Foe" that way you don't need to feel the cringe of embarrassment as he wades through whatever issues it is he's dealing with.

Just a couple of graphs now for visual relief...






I think someone mentioned this already but just in case, we import half our oil so we won't run out in 6 years.

12 maybe...
.

[eastbay]

Has the board discussed this before?

According to the DOE at this link:

http://www.eia.doe.gov/oil_gas/natural_ ... es/cr.html

There's 22.3 bn barrels left. At current usage rates of 9 mn bbl/day the US has 2478 days of oil left. That's 6.78 years.

The USA produces around five mbbls/d and nine mbbls/d is about what is imported. The USA burns about 19 mbbls/d. A single bbl is 42 gallons, so the USA requires a staggering 800 million gallons each and every day or Very Bad Things ... Unthinkable Things ... will occur. The difference domestic production and imports is made up of irregular liquids such as that derived from crop-burning, other ethanols and turning coal into liquids, etc.

Based on current 'reserves', yes, it should last about ten years instead of six if production held steady at today's rate. Projections of future liquid productions are optimistically calculated using loads of hope, guessing and prayer that known and unknown technologies will come to the rescue at the last minute, so they are basically a total load of nonsense and that's what we see in EIA charts of future production projections.

Novus is right about declining rates. Production won't hold steady indefinitely. The production numbers for the USA have meandered up and down over a generally declining downward trend for over 40 years ... and as long as the economy somehow ticks along oil production will continue this overall decline.

I hope this is helpful.

[Hawkcreek]

funny thing is us oil production has been rising steadily due to high oil prices. I think we had the most production in 2010 since 1973.

All because of high prices. The higher the price is, investors are pouring more money in wells that were not producing for many years.

This is a truly astounding post. Are you sure you don't want to change or retract it?

[eastbay]

funny thing is us oil production has been rising steadily due to high oil prices. I think we had the most production in 2010 since 1973.

All because of high prices. The higher the price is, investors are pouring more money in wells that were not producing for many years.

This is a truly astounding post. Are you sure you don't want to change or retract it?

No, no, no ... leave it. It's hilarious!! LOL!!!

[AirlinePilot]

misterno has been around here for quite a while. He should know better. As pops has so clearly pointed out its not necessarily a minority view. On the contrary, I'd say misinformation such as this is RAMPANT and it is used by folks who dont want to know about bad things in order to support their view that everything is fine and drill baby drill can solve MANY of our present energy problems.

Its the uneducated and lazy masses opium. Hell, just turn on the tv and see the adds by several US energy companies talking about HUNDREDS of years of resource at our fingertips just waiting to be exploited. This attitude of laziness in research and huge bias towards cornucopian ideas is one of the largest roadblocks which MUST be overcome as we head down the path of depletion. If you plan and act with regard to reality rather than fallacy the outcome usually works out better.

We are definitely NOT headed down the reality road.

misterno!!!!! SNAP OUT OF IT!!!!!!

[wallythacker]

Thanks for the interesting answers.

So, it appears that in 7-10 years time the US will have to import all the oil they burn. Which also means if there isn't enough worldwide production the meet demand very bad things will happen.

Well, it's obvious that the market will set the price ( hmmm, with all the central bank and .gov intervention in the markets I'm not sure of that statement) and if you can't afford to play as a country you're left out. So the populace of that country, if they need oil for cooking or some other essential purpose, will revolt (or die). See Haiti as an example country that stripped 97% of their forests for profit and or fuel. Before the quake those people ate mud pies to alleviate hunger pangs.

Let's say every country can afford to pay the going price for oil. Again, where is the additional production coming from after American domestic production goes Mexico (into the toilet)? We're talking about 5-9mn bbl/day here. This means we need another Quatar to meet that demand. Last time I looked there was no long term aggregate capacity of 5mn bbl/day to spare, much less the spare capacity to meet BIC growth AND make up for the loss of domestic US production.

Here's something else I don't get. The US buys oil on the world market, which presumably means the domestic oil is put up for bid.

What happens to make sure the good domestic stuff is not sold overseas? There must be a procedure to make sure it's purchased by firm(s) that will refine it in the US. Does anyone know how this works?

In any event I think we're far worse off than people imagine. What's the current consensus? We have 30-40 years to transition before demand overcomes supply? I think we have far less, maybe a decade before seriously bad things start to happen.

[TheDude]

You are describing what is termed the reserves-to-production ratio. It's not really indicative of anything, people often use it to come to the erroneous conclusion you are reaching about production being in imminent danger of falling to zero. This is a good article: The disconnect between oil reserves and production | Energy Bulletin

As an example the US had 29 bbo of proved reserves in 1982, and produced 3.1 bbo. At that rate P1 would have been exhausted in 10 years, yet here we are.

Misterno is conflating all liquids production with C+C, I confronted him on this in some posts if anyone's interested, they can check through my posting history.