[Graeme]

You need to be a subscriber to read the entire article from Petroleum Economist. But the entire report can be viewed at the BP website.

BP declares the death of peak oil

The supermajor sees energy landscape shifting as demand growth slows and new fuels emerge to challenge oil's supremacy. Helen Robertson reports

UK SUPERMAJOR BP has claimed the concept of global energy supply peaking amid rapidly rising consumption is no longer valid as new fuels emerge and energy demand growth slows.

"The theory of peak oil has peaked," BP chief executive Bob Dudley said as he unveiled the company's new energy outlook to 2035.

The outlook, which forecasts global energy supply and demand trends between 2012 and 2035, estimates total global energy consumption will rise by 41% between 2012 to 2035. This is compared to a rise of 55% over the last 23 years and 30% over the past decade.

Global energy demand will grow at around 2% per year between now and 2020 then falling to a rate of 1.2% per year to 2035, BP said. Around 95% of that demand growth is expected to come from non-OECD economies, with China and

petroleum-economist

[KaiserJeep]

The rising demand for energy will be driven by population increases in 2nd and 3rd world nations. That has been the pattern in the recent past.

The top countries in order of the expected increase in population between 2010 and 2050 are:

(1) India 467 million projected population increase
(2) Nigeria 231 million
(3) Pakistan 101 million
(4) Tanzania 93 million
(5) United States 93 million
(6) DR Congo 83 million
(7) Ethiopia 62 million
(8) Philippines 62 million
(9) Uganda 61 million
(10) Kenya 56 million

Note that the US is the only developed country on the list - in fact it is the only developed country in the top 25 countries by population increase. It is unique in that the increase is driven by immigration, and note that the US is the only country in the world with more than 6% foreign-born citizens already - we have 13% and rising.

The world population is increasing on an exponential curve. So will the demand for energy.

[Plantagenet]

BP declares the death of peak oil

"The theory of peak oil has peaked," BP chief executive Bob Dudley said as he unveiled the company's new energy outlook to 2035.

Certainly in the mainstream media this is true. The dire predictions by Colin Campbell, Matt Simmons and others that peak oil would occur in 2005 or 2007 or 2009 or whatever haven't really held up very well. Yes, conventional oil peaked in 2005, but new oil supplies from fracking came on line and are now propelling the US to a position as the world's leading oil producer.

Lets face facts----the peak oil movement completely failed to grasp the importance of fracking---failed to predict that oil production in the US would suddenly start GROWING---and failed to predict that overall global oil producton rates would continue to go up-----in the eyes of the mainstream media these failures have seriously undercut the credibility of the peak oil movement in predicting much of anything about future oil supplies.

[Keith_McClary]

note that the US is the only country in the world with more than 6% foreign-born citizens already - we have 13% and rising.

???
https://en.wikipedia.org/wiki/List_of_c ... population

[ralfy]

From what I know, the 2-pct increase in energy demand involves the present global middle class. In order to meet a growing global middle class in BRIC and emerging markets:

http://www.bbc.co.uk/news/business-22956470

energy demand must increase further.

[SeaGypsy]

Yeah Keith, ahwaz gunna say: 27.7% of Aussies weren't born here. KJ must have been spinning around in a tin can in space somewhere...

[Loki]

Lets face facts----the peak oil movement completely failed to grasp the importance of fracking---failed to predict that oil production in the US would suddenly start GROWING---and failed to predict that overall global oil producton rates would continue to go up-----in the eyes of the mainstream media these failures have seriously undercut the credibility of the peak oil movement in predicting much of anything about future oil supplies.

The predictions of peak oil prognosticators aren't what the OP is about, this is the key sentence:

UK SUPERMAJOR BP has claimed the concept of global energy supply peaking amid rapidly rising consumption is no longer valid as new fuels emerge and energy demand growth slows.

Substitution and conservation/demand destruction are posited as the “solution” to peak oil. An old story. At best these will defer peak oil, as will unconventionals.

Speaking of which, you know as well as I that unconventionals are a temporary means to keep the wolves at bay. Scraping the bottom of the barrel and all that. On a decadal scale, unconventionals will be a blip on the chart.

[FoxV]

Lets face facts----the peak oil movement completely failed to grasp the importance of fracking

I'll admit I was blind sided by this. Although in my defense I confused "oil shale", shale impregnated with hydrocarbons that is mined into producible oil (see tarsands but much less eroei) with "shale oil", the minute deposits of oil in shale formations extracted by fracking.

in any case my bad.

However Plant' have you seriously looked at what is happening in Shale oil? Even the major's are back pedaling on the "Saudi America" mantra. I'm not surprised this is coming from BP. Remember Thunderhorse? Texas city explosion? Gulf of mexico spill? Guess what they all have in common?

When a real oil company talks about the virtue of Shale oil and fracking, I'll listen. Till then I'm going to enjoy our one last oil hurrah and do some traveling while it lasts

[ROCKMAN]

P – “The dire predictions by Colin Campbell, Matt Simmons and others that peak oil would occur in 2005 or 2007 or 2009 or whatever haven't really held up very well”. Well…yes and no IMHO. As far as picking a date for PO you already know how I feel…not only a fool’s game but a distraction from what’s really important: the effect of the changing production and supply dynamics of oil. They may have been wrong about the date but they were rather spot on as to when the sh*t would hit the fan. All one needs to do is see how much the world is spending on oil today compared to the years prior to their predicted date.

So I’ll rant once more: the date of global PO, whenever it might be, is not nearly as important as the effects the dynamics have on oil prices. Also, the development of the oil shales in the US hasn’t changed our PO date: it’s still 1971. Will we ever see a new PO in this country? Maybe…maybe not. But today the US is still more than 40 years past its PO. The world…not there yet. But as you know so well it’s coming. And just like with the US I don’t give a crap what that date will be. The world is paying $95+/bbl today. We have major military conflicts going on today much of which is motivated by fossil fuel resources. We have significant efforts by countries, such as China, to monopolize future oil production as much as possible. We have high risk drilling ventures in Deep Water, including the Arctic, all around the globe. We have massive efforts to recover huge amounts of formerly worthless oil sands. Etc. etc.

IMHO this is THE face of global PO…not some date on a calendar.

[ROCKMAN]

Fox - "in any case my bad." How so? PO in the US happened in 1971 just as Hubbert predicted. The current shale plays haven’t changed that FACT. Will we have a new US PO? Maybe…maybe not. But we don’t have one yet. This isn’t the first time US oil production has increased post peak. It happened in 1985. During that year US production increased by 300 million bbls of oil per year more than we did in 1976.

I don’t recall anyone yelling that PO was dead in ’85 just because US oil production had increased. So you were blindsided by the shales. Welcome to the club. Were you also blindsided by the revelations of billions of bbls of Deep Water oil out in the GOM? BTW Hubbert wasn’t blindsided by either: in his original work he clearly states that his prediction for a US PO was based only upon those established and rather mature oil trends. He made it very clear that any future production from unknown trends were not part of his PO model. And even though few folks check it out Hubbert's prediction for the future production FROM THOSE TRENDS IN HIS MODEL is still right on track. Hubbert wasn't wrong about shale production or the DW GOM: they weren't a part of his model.

Or to put it even more simply: Hubbert never said he was predicting a date for US PO: he was predicting the PO date of those trends that his model was based upon. And he was and is still correct regardless of whether the US ever produces more oil than we did in 1971. There are a lot of folks that will argue that Hubbert predicted the US PO date who are just repeating what they've read other say.

[AndyA]

From the horses mouth.
http://www.youtube.com/watch?v=j6vXHPZ0GQU

[Quinny]

Love the energy flow diagram Hubbert uses. Anyone got a decent quality copy of it please?

edited to add.

Think the video is great thanks.

[Graeme]

Papantonio: Peak Oil Is Here Despite Industry Claims

The oil industry wants us to believe that North America is sitting on an endless supply of natural gas and oil – and they want access to all of it. But the truth is that there is barely enough fossil fuel in the ground to sustain the US. Ring of Fire’s Mike Papantonio speaks with author Michael Klare about how Peak Oil is still a very real threat.

ringoffireradio

[Keith_McClary]

Love the energy flow diagram Hubbert uses. Anyone got a decent quality copy of it please?

edited to add.

Think the video is great thanks.

Youtube isn't working for me today, I will try again.
Was it one of these?
http://google.com/search?q=energy+flow+ ... t&tbm=isch

[kiwichick]

@ Keith

thanks for correcting kj on level of immigrants in countries

new zealand @ approx 25 %

we could take a higher rate of refugees in nz

and i'm sure they'll come!!

[Quinny]

Thanks Keith , but can't see it there. I was pretty boring in a way, just textual with figures showing total input from the sun. And then arrows showing where the energy flows.

[sjn]

I've not been around for a long time, but I just saw Bob Dudley on the BBC news (not) talking about the collapse in BPs profits, saying how oil production has remained constant for the last few years due to the expanding US production offsetting the losses from unrest in other parts of the world, and how this has kept the price of oil within a narrow range. It spurred me to come back.

I've not changed my position on the nature of our predicament. I still believe Systems Dyamics or more specifically Systems Ecology provides the clearest explanation of events. World Energy is a subset of an extremely complex system, as such, the US increase in production is just a data point and symptomatic of the increasingly lower EROEI, and higher marginal costs of production, and is not a game changer. It isn't nearly as significant as the primary forcings on our Economic/Financial/Social subsystems, such as: Available net energy, debt, climate instability(!), political power dynamics/inequality, and the feedbacks and interactions between them.

I hadn't anticipated how much relative stability was achieved through the reduction in complexity by the various governments and central banks short-circuiting large parts of the financial system, removing the "free market" from capital allocation and replacing it with QE leveraged speculation by the politically best connected. But this is, in my opinion, what's happened over the last few years, and has actually resulted in a massive misallocation of capital and resources which could have been used to flatten the inevitable downslope, rather than attempt to postpone for a diminishing minority.

BPs fall in profitability is exactly what should be expected in a post "Peak Oil" or "peak net energy" environment, but it's only the start. Things will really get interesting when the marginal cost of production is clearly greater than the price the market can bear to pay, and we're getting awfully close.

[ROCKMAN]

sjn - Great post! Don't be a stranger. Otherwise I'll be forced to fill the dead air with old geologist stories. Or is it old stories from a geologist? Or old stories from an old geologist?

[Graeme]

BP Fourth-Quarter Profit Drops as Disposals Hurt Oil Output

Profit adjusted for one-time items and inventory changes dropped to $2.8 billion from $3.9 billion a year earlier, the London-based company said in a statement. That matched the average estimate of 12 analysts surveyed by Bloomberg.

BP follows Royal Dutch Shell Plc (RDSA) and Exxon Mobil Corp., the two biggest oil companies by market value, in reporting lower earnings as the cost of drilling rises, refining profits slump and prices stagnate. Chief Executive Officer Bob Dudley has sold less profitable fields in the wake of the 2010 Gulf of Mexico spill and focused on profit margins rather than volume targets.


BP’s production in the quarter fell 1.9 percent to 2.25 million barrels of oil equivalent a day. The figure excludes Russia, where BP completed the sale of its 50 percent in TNK-BP last year and acquired 20 percent of OAO Rosneft. Adjusting for disposals, underlying output rose 3.7 percent.

BP expects underlying output to rise this year, though reported production will drop because of divestments and the loss of about 140,000 barrels a day from the expiration of its concession in Abu Dhabi.

Dudley has promised to focus on BP’s most profitable fields to raise the company’s cash flow to a level 50 percent higher this year than in 2011. The company said it’s on track to hit a target of at least $30 billion this year in net cash from operations, compared with $21.1 billion in 2013.

New project startups give BP “a good clear line of sight to get to the $30 billion in 2014,” Dudley said in a Bloomberg Television interview today. “You have to select your projects very carefully and execute them really well, and pace them out so there’s cash in excess, so there’s distributions to shareholders. There’s still a lot of growth out there for us.”

businessweek