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‘Peak Demand’ Is The New ‘Peak Oil’

‘Peak Demand’ Is The New ‘Peak Oil’ thumbnail

Summary

  • The Peak Oil theory sure turned out to be wrong. Drilling technology changed.
  • The conventional wisdom about future oil demand is also wrong.
  • The demand for—and supply of—transportation is the big game-changer.
  • Transportation accounts for almost 75% of oil use in the U.S. and higher MPG is only a part of the solution.
  • Technology is changing the number of trips we’ll take and how we’ll travel.

(click to enlarge)

Source: British Petroleum.

Peak Oil

“Peak oil” is a theory that refers to a point in time when the maximum rate of extraction of petroleum is reached. Once it is reached, the rate of production enters terminal decline.

That is how it was supposed to happen anyway, according to M. King Hubbert, a geologist for Shell Oil (NYSE:RDS.A) (NYSE:RDS.B). Back in 1956, he predicted that U.S. oil production would likely peak between 1965 and 1970 and decline steadily thereafter. U.S. oil output did peak at 9.6 million barrels per day (mmbd) in 1970 and began its long decline-with an interim boost when Alaska came on-line. But because of the oil shale revolution, U.S. oil production recently hit 9.6 mmbd again.

The lesson here is that technology changed everything. Hubbert was assuming the oil field development technology of his era when crude oil prices were less than 7 cents a gallon ($2.80 per barrel).

Data Source: Energy Information Administration

Peak Demand

U.S. oil use became almost 75% transportation-related, and so the demand for and supply of transportation is key to predicting oil use. About ten years ago, consumption began to drop in the industrialized world. At first, it was attributed to the rise in crude prices. Then the financial crisis of 2008/09 caused oil use to drop.

By now, the world economy has recovered for a few years.

(click to enlarge)

However, OECD oil consumption, which includes the U.S., European Union and Japan, peaked in 2005. However, in 2014, oil consumption fell by 1.2% and is back to its 1995 levels.

Data Source: BP Statistical Review.

In the European Union, peak oil consumption occurred in 1979. That’s when oil prices spiked due to the Iranian Revolution followed by the Iran-Iraq war. OPEC subsequently kept prices high but cutting back output but Saudi Arabia capitulated in late 1985 after the call on its oil dropped below 3 mmbd.

Consumption did rise again in the low price era but peaked out again in 2006. Oil use fell by 1.2% in 2014 and was at its lowest level since 1985.

Data Source: BP Statistical Review.

Oil consumption in Japan peaked almost 20 years ago in 1996. In 2014, oil use dropped 5.2 % and was back to where it was 45 years ago in 1971.

Data Source: BP Statistical Review.

In the United States, peak consumption occurred in 2005. In 2014, oil use gained 0.5%.

Data Source: BP Statistical Review.

World oil consumption is only rising because of gains in the emerging nations. China accounts for the largest portion of new growth. But in 2014, its growth pace of 3.3% is well below the 10-year average of 5.1 %.

Data Source: BP Statistical Review.

“Beam Me Up, Scotty”

The conventional wisdom has been that the demand for cars will increase with population growth worldwide. In 2010, Americans scrapped 4 million more cars and trucks than they purchased, the first significant drop in the U.S. auto fleet in more than four decades.

Among the reasons cited by Lester Brown of the Earth Policy Institute is a shift away from the importance and prestige of the automobile in the youth culture. “Perhaps the most fundamental social trend affecting the future of the automobile is the declining interest in cars among young people,” Brown said. “Many of today’s young people living in a more urban society learn to live without cars. They socialize on the Internet and on smartphones, not in cars.” Car fleets are plateauing or have begun to shrink in most major car markets, including the U.S., Europe and Japan.

Internet services such as Skype, for example, the free video chat and voice calls service, has exploded, and it’s still in its infancy. In 2013, Skype-to-Skype traffic was 40% the size of the entire telecom market.

Skype is reducing the travel previously needed for face-to-face meetings of all sorts. For example, it may be just as good as being there in person for delivering therapy.

“Conducting behavioral family systems therapy for diabetes with teens with poorly controlled diabetes either face to face in the clinic or using videoconferencing with Skype appears to result in similar improvements in both adherence to the diabetes treatment regimen and glycemic control,” commented first author Michael Harris, PhD, a professor and director of Novel Interventions in Children’s Healthcare at Oregon Health & Science University in Portland.

About 17% of adults on the internet use Skype. There are 100 million Skype users in China.

Uberization and Autonomous Cars

If you still need to drive to your meetings, the choices have evolved. UBS predicts that by 2020 battery costs will be slashed in half, making electric cars the most economical choice. Transportation will move away from oil as electric vehicle fleets expand rapidly and are replaced by bike-and-car sharing.

Ride-sharing is already popular in many cities and is a much more economical way to get around a city than buying and owning a car if one doesn’t drive more than 10,000 miles a year. And a UC-Berkeley study showed that vehicle ownership among car sharing users was cut in half. If a person is paying for every trip vs. just the gasoline price, they will be more deliberate about which trips to take, thereby becoming more efficient.

Uber (Pending:UBER) claims that it is “committed to changing people’s lives by revolutionizing urban transportation” by reducing the number of cars in cities, making them more livable. That’s based on Uber being a cheaper alternative than owning a car.

Cities currently account for about 66% of global energy use, with forecasters projecting that figure to rise to 80% as the population shifts to urban centers. But this trend of massive urbanization will more likely reduce the viability of private car ownership in the very places that are supposed to serve as the new centers of oil use, such as India, Indonesia and the Arab Gulf.

Car-sharing services such as Uber intend to change transportation in urban areas. Riders simply request rides on a phone app and payment is made through the credit card associated with the account. Uber has more than 20,000 drivers in Los Angeles, its largest market. The wait time to be picked up is usually less than 5 minutes.

Uber has aspired to take a million cars off the roads of London, despite the inevitable increase in the city’s population over the coming years. Uber has recently launched a service called UberPool, which picks up passengers headed in the same direction, dropping each off along the way. This makes the service extremely efficient for the driver, thus enabling Uber to reduce costs to passengers even further. The point is that the service will dramatically reduce miles driven per year and Uber claims it’s saved 674,000 miles of driving in the few cities where it’s offered since last year. The companies offering on-demand carpooling believe it is transforming mass transportation.

Uber has also introduced a service in some markets called UberFresh. It delivers meals from restaurants so people don’t need to drive there and back. This type of service will reduce the amount of driving done for such errands.

Uber serves 290 cities worldwide and has over 8 million users. More than 55% of U.S. cities has access to an Uber car. Uber revealed that there were now 14,088 registered Uber cars, compared to 13,587 of the yellow cabs that have long been ubiquitous in New York City.

Uber managed 140 million rides in 2014 and is managing one million rides daily. Uber is now available in parts of Central and South America, such as Barranquilla, Santiago and Rio de Janeiro. It has extended its reach throughout Europe, the Middle East and Africa. If you are in Abu Dhabi, Athens, Brussels, Krakow, or Prague you can get can signal Uber on your cell phone and get picked up. In the Asia-Pacific region, it’s available in Adelaide, Tokyo, Singapore and Kuala Lumpur. It operates in 11 cities in India. It cannot operate in China yet, but two car-sharing services there have merged to serve Chinese cities.

Uber pays about 75% of its revenues to its drivers who it considers to be independent contractors. It would like to replace them with autonomous cars.

The transition to autonomous cars is further along than most people may realize. Elon Musk says that Tesla Motors’ (NASDAQ:TSLA) 2015 models will be able to self-drive 90 percent of the time.

GM’s 2017 models reportedly will feature “technology that takes control of steering, acceleration and braking at highway speeds of 70 miles per hour or in stop-and-go congested traffic.” Both Google (NASDAQ:GOOG) (NASDAQ:GOOGL) and Tesla predict that fully-autonomous cars will be available to the public by 2020.

Autonomous cars have the potential to revolutionize auto transportation with the Uber system. Instead of private ownership in urban areas, Uber can have them picking up and dropping off people continuously, resulting in greatly reduced miles driver per person. PricewaterhouseCoopers predicts that the number of vehicles on the road will be reduced by 99%, estimating that the fleet will fall from 245 million to just 2.4 million vehicles. While that statement appears to be a great exaggeration of the effect, a very substantial reduction in cars and miles traveled to perform errands seems very likely. (Read Zack Canter’s “How Uber’s Autonomous Cars Will Reshape the Economy by 2025”).

Conclusions

The worry for decades has been that the world would be running out of oil before suitable alternative energy sources could be available for a reasonable price based on the Peak Oil theory. The shale oil revolution has changed that. OPEC is now competing to regain its market share by foregoing as much as $500 billion in revenues this year.

Unlike conventional wisdom, oil demand is likely to peak due to technology changes in the demand and supply of auto transportation. Because of internet services such as Skype, we won’t have to travel physically to as many meetings. With the expansion of electric cars, car-and-bike sharing services like Uber, and the development of autonomous cars, the supply of transportation in cities will become far more efficient, and that will bring down auto miles driven using oil substantially.

Because transportation is the largest component of oil use, the global demand for oil will be dropping in the not-too-distant future, just as it has in the OECD countries.

seeking alpha



59 Comments on "‘Peak Demand’ Is The New ‘Peak Oil’"

  1. steve on Sat, 27th Jun 2015 10:32 am 

    What this article fails to see is that world economies are failing! The U.S has papered over everything but will not admit that its growth is debt growth…eventually this will all collapse…those are the sane fundamentals…writers like the one above like to pick and choose what to say…another way of saying they are lying.

  2. joe on Sat, 27th Jun 2015 10:33 am 

    While I see the point of this article it’s fundamentally wrong. It’s making the same mistakes it’s laughing at ‘peakers’ for doing. It’s assuming a social tragectory which basis it’s assumptions on continued patterns of growth and trends. It’s not justifiable to claim people WILL be using less oil because people globally are getting richer and lazier and fatter. Even as the developed economies slow and reach their limits of growth, the other areas must make up for it, or else the growth model system collapses in debt and stagnation.

  3. Boat on Sat, 27th Jun 2015 10:52 am 

    joe, did you miss the skype part replacing driving and flying? It’s called accomplishing the task more efficiently without using as much oil. This is not a negative.

  4. tahoe1780 on Sat, 27th Jun 2015 10:55 am 

    Article fails to note changes in the definition of oil, net vs. gross oil (EROEI)availability, price – not technology – as the stimulating factor, and Hubbert’s actual forecast based on conventional reserves. Sure, bring on the new technologies, but one has to ask what energy source will be used to supply the materials to build out the infrastructure.

  5. Davy on Sat, 27th Jun 2015 11:16 am 

    Boat said “did you miss the skype part replacing driving and flying? It’s called accomplishing the task more efficiently without using as much oil. This is not a negative.” Oh, Boat and the wonders of efficiency. Boat, we are not saving energy with electronic devices in a macro and aggregate sense. Granted electronics have been energy savers. Yet, because of the economies of scale of the macro electronics complex we have significant other uses for electronics that are nothing but waste. Porn, spam, and useless gaming are just a few of a numerous list of the content. We then have the new hardware needed every season to satisfy the fashion needs in all of us.

    We just added another consumption layer with electronics and you want to call it “not negative”. Any saving with oil because we skype is used elsewhere. Efficiency is undergoing diminishing returns in any case. You can only get so efficient before the amount of money your spending to lower your consumption becomes a negative investment. Technology is reaching that point in so many areas. What is needed is just the simple garden variety of less consumption. We need to be doing less with less in the future.

  6. Apneaman on Sat, 27th Jun 2015 11:25 am 

    Does anyone actually know the definition of a revolution? The automobile was revolutionary and so were some other things, but not the shale debt game. What revolutionary change has happen in society since shale? Nada zero zippo zilch. We do not do even do one thing different. So some folks made some money extracting a resource that we were already extracting and using and had already built a society around. Oh my how completely different is that? Techno optimists and techno-utopians see what they want to see.

    Same as It Ever Was
    Why the Techno-optimists Are Wrong

    “Over the past two centuries, historic breakthroughs have been responsible for generating huge unmeasured value. The motor vehicle eliminated vast quantities of manure from urban streets. The refrigerator prevented food from becoming contaminated. Clean running water and vaccines delivered drastic declines in child mortality rates. The introduction of running water, gas and electric cookers, vacuums, and washing machines helped liberate women from domestic labor. The telephone removed obstacles to speedy contact with the police, fire brigades, and ambulance services. The discovery of electric light eliminated forced idleness. Central heating and air conditioning ended discomfort. The introduction of the railroad, the steam ship, the motor car, and the airplane annihilated distance.

    The radio, the gramophone, and the television alone did far more to revolutionize home entertainment than the technologies of the past two decades have. Yet these were but a tiny fraction of the cornucopia of innovation that owed its origin to the so-called general-purpose technologies—industrialized chemistry, electricity, and the internal combustion engine—introduced by what is considered the Second Industrial Revolution, which occurred between the 1870s and the early twentieth century. The reason we are impressed by the relatively paltry innovations of our own time is that we take for granted the innovations of the past.”

    https://www.foreignaffairs.com/articles/2015-06-16/same-it-ever-was

    The golden quarter

    Some of our greatest cultural and technological achievements took place between 1945 and 1971. Why has progress stalled?

    “Today, progress is defined almost entirely by consumer-driven, often banal improvements in information technology. The US economist Tyler Cowen, in his essay The Great Stagnation (2011), argues that, in the US at least, a technological plateau has been reached. Sure, our phones are great, but that’s not the same as being able to fly across the Atlantic in eight hours or eliminating smallpox. As the US technologist Peter Thiel once put it: ‘We wanted flying cars, we got 140 characters.’”

    http://aeon.co/magazine/science/why-has-human-progress-ground-to-a-halt/

  7. penury on Sat, 27th Jun 2015 11:26 am 

    Just another dream of peace and plenty. I am afraid that by the time people take off the blinders and really look at the economy of the world, the picture will be like something out of Bosch. It does not matter in the long run whether it is supply shortage or demand shortage the end result will be the same, misery and hardship.

  8. Apneaman on Sat, 27th Jun 2015 11:32 am 

    One can really see how effective skype has been simply by how rush hour is now all day long in every major city. Thanks skype for taking all those cars off the road and making commuting such a pleasure now.

  9. Apneaman on Sat, 27th Jun 2015 11:36 am 

    Thanks skype for making my jackoff sessions with the girl friend more fun. Not having to hold the phone frees up a hand to rub my nuts and I get to look at her tits as well. I loves me some revolutionary technology.

  10. HalfEmpty on Sat, 27th Jun 2015 12:06 pm 

    Glad to see PO.com remains a peaceful and helpful site.

    Also: Hello to all.

  11. Mark Ziegler on Sat, 27th Jun 2015 12:06 pm 

    Iran should be able to pick up some slack on global demand issues. But when the Saudis announce that the Ghawar field has gone into irreversible decline there will be a change in the stock markets that fracking will not be able to help.

    viewcrafters

  12. Davy on Sat, 27th Jun 2015 12:12 pm 

    Ape Man, I am with you. Technology is failing to deliver the punch it once did at the same time problems and predicaments are becoming much more demanding of technology and energy intensity. IOW entropy is winning despite and because of our technology. I injected “because of” because so many of our problems today are from problems from using technology to solve problems.

    We are really just looking more and more like the red queen. We are stuck in catch 22’s everywhere you look. We are definitely stuck in a consumption trap with our global society. We are at the point today where every local has been delocalized and dangerously exposed to the needs of the global. Yet, that very need of consumption to drive a healthy globalized economy that ensures our survival is killing our world and allowing overpopulation.

    The only solution to all this to me is collapse. My biggest issues is when should we begin the collapse and is there a way to lessen the terrible effects of collapse. Growth is definitely not the answer long term. I will agree short term until we get our shit together and figure out where we are going and how I will acknowledge growth. The caveat on that is 3-5 years.

    Ideally we need a significant crisis to focus minds. My opinion is a liquid fuel crisis would be the best. The reason I say this is liquid fuels touch every segment of the economy. Can we throttle back poor lifestyles and attitudes just by having a liquid fuel crisis? If so this would hopefully save resources and put vital resources to better use. There is far too much discretionary waste in the system.

    We can allocate liquid fuels to vital sectors like food and emergency services and let consumerism wither on the vine. The consequences of this will be a destroyed economy but how quickly is the issue. Can we manage to adapt to the drop in economic output from the end of consumerism caused by an economic crisis? I just don’t know. If we are not careful in a crisis a dangerous collapse could occur. Yet, if we are not careful and keep growing population and consumption a dangerous collapse could occur. Don’t you love the revolving catch 22’s

  13. Apneaman on Sat, 27th Jun 2015 1:14 pm 

    There Must Not Be Peak Oil

    ” In this post, I explain the logic of wishful thinking and plain denial that rules on the Earth in most matters that matter (population growth, power (= energy per unit time) supply, water supply, food supply, progressing destruction of planetary ecosystems, and so on).

    I imply throughout that without an ample and continuous supply of power as liquid fuels, chemical feedstock and electricity, the societal activities we take for granted are impossible.”

    http://patzek-lifeitself.blogspot.co.uk/2015/06/there-cannot-be-peak-oil.html

  14. Nony on Sat, 27th Jun 2015 1:48 pm 

    I think the “Earth has a limited volume” is a silly argument. 90%+ of “cornies” or even just peak oil skeptics will readily concede this. But what we have seen from the peakers since 2005 was a MASSIVE flurry of speculation on the Internet and then denial of how things have worked out since.

    Here’s an easy example:

    http://www.resilience.org/stories/2013-03-19/commentary-texas-and-eagle-ford-where-the-action-is

    Two years ago, Roger Blanchard, a peaker for decades, predicted Eagle Ford peak of 600,000 bpd. And that was his optimistic case! Has he gone back and written about what actually happened (production more than 1 million bpd above his peak call)? No. Silence. Where’s his article?

    And don’t tell me about Yergin. Everyone is responsible for their own integrity. Be a scientist. Be an analyst. Don’t worry about the “other side”. Worry about understanding the world we live in.

    How can you be interested in a phenomenon and then not follow up on it when it gives a different answer? I wouldn’t want an engineer who did not try to figure out whey tensile stress of a bolt was higher or lower than his prediction. Not think much of a physicist who did not try to understand why a predicted solid state insulator was instead metallic. Nor a chemist who was not curious about a reaction that gave triple the product as his equilibrium calculation. I definitely know I wouldn’t want someone with this type of bias advising on buying or not buying a company.

  15. Nony on Sat, 27th Jun 2015 2:04 pm 

    http://www.theoildrum.com/node/9619

    Here is Tad Patzek with a prediction of the new peak from shale oil. His “last green Hubbert peak”. He underestimated it by a factor of two. Within 2.5 years of his article, the production record has disproven his forecast. I wonder who lives in denial?

  16. Apneaman on Sat, 27th Jun 2015 2:23 pm 

    I don’t think anyone bothers to click your links nony. Years of lying and deceiving have brought that about. You are a proven liar and deceiver many times over (nony, marm, papa smurf, ??????) Any valid points you may have are moot given your history.

  17. Nony on Sat, 27th Jun 2015 2:28 pm 

    Ape:

    You’re right. Beating people over the head with links is not going to change minds. It’s human nature. A gentler approach might have more hope.

    http://www.brainpickings.org/2015/05/20/blaise-pascal-pensees-persuasion/

  18. Davy on Sat, 27th Jun 2015 2:44 pm 

    NOo, I agree with your points on the failed peeker predictions. It is a new field that is growing and maturing. It is fair to say such a group of individuals is going to have had failed predictions. One thing that cannot be dismissed is we are seeing depletion both volumetric and economic of oils systematic contribution to society. This can be discounted and argued but not dismissed.

    We also have all those other above ground peak oil dynamics occurring that represent real risk to the adequate supply of our vital foundational commodity oil. Then there are all the other predicaments and problems of social fabric tensions, ecological decline, and climate instability.

    My point to you is none of this registers with you. You remind me of a Wall Street talking head that has a narrow investment focus. You are very competent with the oil supply issues, figures, and terms but that is where it ends. You are unable or unwilling to connect the dots further.

    We see this all the time today where specialists in so many fields are unable to step into other fields and see a real multidimensional picture of what is occurring. I am asking you NOo step out of your cocoon. NOo do you hear the thunder? There is a storm ahead. We need brains like yours to be open minded about these issues not a denialism of any issues of descent. Come on NOo give it a try.

  19. Nony on Sat, 27th Jun 2015 3:03 pm 

    https://www.youtube.com/watch?v=SE5VB_EY7dY

    Must keep attention on the precious. Must have my shiny oil! 😉

    But seriously, if you want to be met halfway, one point that is good on “your side” is high price. Even the current stable 65 Brent is quite a bit worse than the traditional 30 or so and an indication of scarcity premium.

    Peace, brah.

  20. Beery on Sat, 27th Jun 2015 3:05 pm 

    I thought “Peak Demand” had its 15 minutes 3 or 4 years ago. Are they really still rolling this old chestnut out as their “go-to” propaganda?

  21. Beery on Sat, 27th Jun 2015 3:12 pm 

    I do like how his oil production graph goes back to 1983, making it look as if the previous US peak was in the 1980s rather than the ’70s. It works for the author because the Prudhoe Bay find makes it look like it was “the peak” rather than just a peak on the downslope. It nicely illustrates that the article is a cynical propaganda piece rather than just the result of plain old incompetence.

  22. peakyeast on Sat, 27th Jun 2015 3:38 pm 

    Wasnt there something about the internet consuming enormeous amounts of power?

    Wasnt there something about jevons paradox when thinking about uber?

    Didnt the car market just move to china (and rest of asia)?

    How did the writer of the article overlook EIAs dramatic reduction of the contribution from shale plays?

    How come energy that only lasts a few years is a revolution and has saved us so we can develop alternatives?

    Did the writer think that getting energy is our only problem?

    – Even if only looking with one eye at shale plays?

    Naaa.. its not a serious article – although I normally likes things with a lot of graphs.

    I did like the contributions to growth graph, though. 😀

  23. shortonoil on Sat, 27th Jun 2015 4:42 pm 

    Just got back from a five day (unintentional) tour of New England. I hit them all but RI, and Maine, but saw a lot of upstate, and down state NY. Having grown up in, and been educated in Vermont, and worked there, and out of it, for many years, I consider the area my old stomping ground.

    The one thing that I noted everywhere I went was there was absolutely no new construction going on. Even ten years ago, with an 800 mile trip through New England, one would have seen hundreds of new building going up. I saw one! There is quit a bit of restoration occurring, especially in the more prosperous towns such as in Western Massachusetts, but no new buildings.

    Lots and lots of new cars; Beamers, and Audis everywhere. It seemed like everyone was driving a new something, or another. Restaurants were packed, and the skying industry is booming. It is all quit a change from what I knew just a decade ago; where a new condo complex was going up on every hill, and knoll, and the skying industry was struggling to stay alive.

    I spent several hours talking to a fellow on a flight from Detroit to Manchester, NH. Because of the wild storms going on all over the East coast, airline are are rerouting flights everywhere to make connections for their customers. My itinerary was changed five times in three days by the airlines. I had originally left from Richmond, VA. Like myself the gentleman had worked in his early career as an engineer for GE. We knew a lot of the same people, and had worked in the same plants. We discussed the incredible technological advancements that GE has made over the years. He was one of the early pioneers in Ultrasound technology that has changed the face of medical diagnostics. He is still heavily involved in Ultrasound development and production. Even though the the industry is astronomically lucrative, the one comment that I took note of is that there is not one new Ultrasound production facility being built in the world.

    The world’s economy has changed from an extremely energy intensive infrastructure build out economy to a consumer based economy in just a decade. I believe that the reason is oil. Petroleum is no longer delivering the energy needed for massive infrastructure development. The only country in the world that seems to have gotten around that problem was China, and she continued infrastructure development by choking herself almost to death with massive quantities of low grade coal. Something that no Western government would even dare attempt to do.

    I had an opportunity to discuss the coming end of the oil age with a number of very well informed, and educated persons. I was quit surprised at how many of them agreed with my summation of the events taking place. Many of them were not shy at expressing their disdain for the obvious absurdities put forth by industry, and political policy. Mostly, they liked my summation of the situation; “industry, and politicians are reacting the way they are because they believe their own stories”!

    http://www.thehillsgroup.org/

  24. BobInget on Sat, 27th Jun 2015 7:17 pm 

    Shortonoil found plenty of round holes for his
    pegs. The fact is we are getting More energy out of oil, not less. Skype was mentioned. Nevertheless, our FOB (friend of board) needed to travel, by air, (air-travel, up 6%) jet fuel consumption:
    http://www.eia.gov/forecasts/steo/report/us_oil.cfm

    “Total U.S. liquid fuels consumption rose by an estimated 70,000 b/d (0.4%) in 2014. In 2015, total liquid fuels consumption is forecast to grow by 370,000 b/d (2.0%). EIA projects liquid fuels consumption growth will slow to 70,000 b/d (0.4%) in 2016. The 2015 and 2016 consumption forecasts are about 40,000 b/d higher than in last month’s STEO”.

    (last 2 week’s jet fuel consumption rose 7.2 and 7.6% respectively).

    It seems the RATE of growth is indeed slowing.
    This is like taking longer to fill-up a bigger tank.

    When a person or group puts up charts in order to prove some point, we choose which charts most favor the POV we are stressing.

    Except for China (and Japan) other Asian powerhouses were ignored.
    http://www.bloomberg.com/news/articles/2015-06-03/india-s-oil-addiction-to-vault-nation-into-top-3-global-guzzlers

    The IEA estimates India will consume about 4.1 million barrels of oil a day this quarter, compared with Japanese demand of 3.8 million barrels a day. The U.S. and China are the world’s top oil users.
    “India will be a big center of oil and gas demand growth in the next few years,”

    India’s population/economy is growing faster then China’s. We need also to include India, Vietnam, Korea. Thailand, Indonesia etc.

    Saudi Arabia and it’s Arab “coalition” are certainly not slowing jet fuel consumption.

    Combine militaries are showing distinct INCREASED consumption fighting IS in Iraq and Syria.

    When it come to oil, we all go to the same few spigots.

  25. BobInget on Sat, 27th Jun 2015 7:37 pm 

    Maybe jet fuel will ‘peak’ in 2021, maybe not.

    http://www.indexmundi.com/energy.aspx?product=jet-fuel

    ttps://www.google.com/search?q=2015++jet+fuel+consumption&espv=2&biw=1022&bih=497&tbm=isch&tbo=u&source=univ&sa=X&ei=7ECPVejJMYjboAS-vIGADA&ved=0CDMQsAQ#imgrc=hiqAPPOcM53HFM%3A

  26. shortonoil on Sat, 27th Jun 2015 8:08 pm 

    “Shortonoil found plenty of round holes for his
    pegs. The fact is we are getting More energy out of oil, not less. Skype was mentioned. Nevertheless, our FOB (friend of board) needed to travel, by air, (air-travel, up 6%) jet fuel consumption:”

    That is called believing your own story. It takes more, and more energy to produce oil, not less. Maybe your story is that the Laws of Physics don’t apply to petroleum. I can 100% guarantee that nature does not care what kind of story you want to tell yourself. Fairy Tales are cute at five, but a some point you have to grow up.

  27. Apneaman on Sat, 27th Jun 2015 8:58 pm 

    A North Dakota Oil Boom Goes Bust

    What will happen to those who built their lives on it?

    http://www.theatlantic.com/business/archive/2015/06/north-dakota-oil-boom-bust/396620/

  28. steve on Sat, 27th Jun 2015 9:16 pm 

    I know the running meme here is that we will never see high oil prices again but with false transparency and manipulation of our systems…I am not so sure of anything any more…we can see anything for the short term…

  29. Nony on Sat, 27th Jun 2015 9:36 pm 

    Up a million over the last year, despite the price drop.

    http://www.oilandgasinvestor.com/blog/more-more-faster-and-less-cost-lower-48ers-add-11mmbbl-price-downturn-803746#p=full

    Yeah, I know…lag, but still…love to watch those numbers go up. I know you all will hoot when they go down, despite the issue being price change , not depletion.

  30. observerbrb on Sun, 28th Jun 2015 5:12 am 

    Nony, how do you think that Oil prices will be able to pick up if oil-producing countries such as U.S., Canada, Venezuela, Angola, Nigeria, Saudi Arabia , etc… are contracting or even facing a recession?
    Oil-importing countries have been devastated by the crisis (and high oil prices) and the debt is still going up… how do you think they can support a high oil price?

  31. Dredd on Sun, 28th Jun 2015 5:36 am 

    If the subglacial lake and river system under Antarctica, which “rivals the Amazon basin” makes it to the sea along with glaciers, sea level rise will have an impact on fossil fuel use.

    Not to mention Greenland (Weekend Rebel Science Excursion – 45).

    Peak poison can’t come soon enough.

  32. Nony on Sun, 28th Jun 2015 5:43 am 

    Obrb, I think prices are affected by global supply and demand. 3rd world demand still growing. U.S. demand pretty healthy lately for petrol too.

    I would prefer low prices actually.

  33. Kenz300 on Sun, 28th Jun 2015 7:11 am 

    No more WARS for OIL…………..

    Bring on the electric vehicles………..

    For Faithful, Social Justice Goals Demand Action on Environment – The New York Times

    http://www.nytimes.com/2015/06/21/science/earth/for-faithful-social-justice-goals-demand-action-on-environment.html?emc=edit_th_20150621&nl=todaysheadlines&nlid=21372621&_r=0

  34. Boat on Sun, 28th Jun 2015 7:22 am 

    Take this skype thing a little farther. How much time do we spend on the internet chatting, looking up stuff for pleasure or entertainment at a very low cost. What about tv and netflix. When I was a kid we used to fill up the old truck at $.35 per gallon and drive to 3-4 towns and the local lake just checking out our stomping grounds. $20 would get you drunk, plenty of cigarettes and plenty of scenery.
    Todays kids watch their 65″ and battle another across country on x-box.
    You may not like the change but a lot less oil and energy is used.
    Ya’ll need to seriously look at how much energy it took to run a 1960 dryer, refrifgerator, range

  35. Boat on Sun, 28th Jun 2015 7:25 am 

    Take this skype thing a little farther. How much time do we spend on the internet chatting, looking up stuff for pleasure or entertainment at a very low cost. What about tv and netflix. When I was a kid we used to fill up the old truck at $.35 per gallon and drive to 3-4 towns and the local lake just checking out our stomping grounds. $20 would get you drunk, plenty of cigarettes and plenty of scenery.
    Todays kids watch their 65″ and battle another across country on x-box.
    You may not like the change but a lot less oil and energy is used.
    Ya’ll need to seriously look at how much energy it took to run a 1960 dryer, refrigerator, range, heat/cool the house etc. BAU is constant change and a lot of that is for the good.

  36. Apneaman on Sun, 28th Jun 2015 7:35 am 

    Hey boat people, nice personal story, but like all your little stories you have no numbers to back it – just twisted logic. You need to look at energy per capita then and now and that includes embedded energy in all the crap we buy. Almost every single efficiency gain gets blown out of the water by increased consumption/usage AKA Jevons paradox.

    “In economics, the Jevons paradox (/ˈdʒɛvənz/; sometimes Jevons effect) occurs when technological progress increases the efficiency with which a resource is used (reducing the amount necessary for any one use), but the rate of consumption of that resource rises because of increasing demand”

    https://en.wikipedia.org/wiki/Jevons_paradox

  37. Newfie on Sun, 28th Jun 2015 7:49 am 

    Any article with the phrase “game-changer” can be ignored.

  38. shortonoil on Sun, 28th Jun 2015 9:26 am 

    “Obrb, I think prices are affected by global supply and demand. 3rd world demand still growing. U.S. demand pretty healthy lately for petrol too.”

    The supply/ demand issue is a red herring. Demand has followed supply almost exactly for the last one hundered years. Price has been controlled by production cost, and oil has been a very good deal for the consumer for a very long time. The consumer could afford to pay what the producers required to produce it, and make a profit.

    If you open a copy of Samuelson you will find supply/ demand curves which are P/Q curves;. Price vs Quantity. Demand curves slope up, and to the left, Supply curves slope up, and to the right. As price goes up demand goes down, and supply goes up. Price has gone up for the last one hundred years; supply has gone up, and demand has gone up right along with it. That is exactly opposite to what the demand curve predicts! For the last 100 years the demand curve has sloped up, and to the right; it has followed the supply curve.

    The reason for the historic behavior of petroleum price, and demand has to do with the value of petroleum to the economy, and that is, and always has been a matter of the energy it supplies to that economy. Counting barrels has been a proxy for the quanitity of energy supplied. It was never taken into consideration that the quanitity of energy supply per barrel may be changing. It is, and it is going down.

    We have now reached the point where the energy per barrel has fallen to a level where petroleum can no longer sustain economic growth. Without growth demand has fallen, and will continue to fall. The actual data contradicts what economists, and other prognosticators are, and have been advocating. You can do a little research, and make up your own mind. It is simply a question of who you are going to believe; them, or your own eyes. A so called expert that can’t read a graph may not be much of an expert!

    http://www.thehillsgroup.org/

  39. Nony on Sun, 28th Jun 2015 11:01 am 

    By supply an demand I mean the indifference curves of price versus volume. Econ 101. The. Confusion of volumes versus inventory is not the meaning if supply and demand but dumb newspaper confusion.

  40. Outcast_Searcher on Sun, 28th Jun 2015 11:20 am 

    A North Dakota Oil Boom Goes Bust

    What will happen to those who built their lives on it?

    They will need to do something else, at least until the price rebounds sufficiently.

    There is nothing new here. Businesses built on commodities with volatile prices all experience booms and busts. And the high priced producers (and their employees) take it on the chin when prices decline rapidly.

    Just like all businesses. One can imagine all the upset buggy whip makers when the auto displaced the horse for most first world transportation. And yet, the auto related jobs that resulted in time completely dwarfed the buggy whip jobs.

    Just because the world changes (as it always does) does NOT mean doom. Zerohedge is almost constantly wrong, as are the short term doomers.

    I’m not saying everything is great. Long term, AGW, pollution, BAU growth, too much debt, etc. are serious issues which aren’t being seriously addressed. But short term claims that all is lost any time now lose credibility when they’re wrong time after time after time.

  41. Boat on Sun, 28th Jun 2015 12:40 pm 

    Apneaman, chart I saw shows flat US consumption per capita over the last 20 years. In spite of the US horrible consumption problem. All those bigger houses for those unneeded gadgets and Walmart junk. How does your country stack up.

  42. marmico on Sun, 28th Jun 2015 12:51 pm 

    According to RECS, U.S. households used 10.2 quadrillion Btu (quad) of site energy in 2009. During the 1980-2009 time period, household site energy increased by 0.9 quads or 8.9%—an average annual growth of 0.3%. Over the same period, the number of households increased by 33.0% and total floor space by 52.0%. This is equivalent to an average annual growth of 1.1% and 1.8%, respectively. As a result, the aggregate energy intensity per household and per square foot declined by 24.2% and 43.1%, respectively.

    http://www.eia.gov/analysis/studies/buildings/households/pdf/drivers_hhec.pdf

  43. GregT on Sun, 28th Jun 2015 2:44 pm 

    From Marmico’s linked report above:

    “Summary”

    “The main purpose of this report was to help in understanding the changes in U.S. households’ energy consumption between 1980 and 2009 using available RECS survey data. We estimated three decompositions for total energy, total electricity, and natural gas used for space heating.
    We found that over the total interval for all three cases, changes in the number of housing units and average size of homes resulted in increases in energy consumption. We also found that for both total energy and natural gas space heating consumption, the decline in energy intensity was the main reducing factor. The results further revealed that the decline in total energy intensity was largely due to a larger decline in intensity of natural gas for space heating.

    For the entire period, the results were mixed with respect to region and housing-type effects. Also, changes in weather led to a reduction in the growth of household energy consumption over the study period.

  44. Davy on Sun, 28th Jun 2015 2:57 pm 

    Thanks Greg, Marmi’s little demonstration was too Marmi to believe but I was too lazy to dig into it further. I am glad you invested the time to get at a more accurate viewpoint.

  45. GregT on Sun, 28th Jun 2015 3:45 pm 

    Ya Davy,

    I’m not interested in the Marmi-noo’s continuous cherry picking. I’m interested in the truth, even if it isn’t very comfortable.

  46. Apneaman on Sun, 28th Jun 2015 4:00 pm 

    Boat, Canada is right at the top of energy consumption per capita. A delusional consumer paradise. In BC we get 75% of our electricity from hydro power, but it will not last because all the reservoirs are glacier and snow pack feed which is disappearing at an alarming rate. There is also a water treaty with the north western states (Columbia river) so that could prove problematic in the near future as well.

    Glaciers, BC Hydro’s Melting ‘Batteries’

    http://thetyee.ca/News/2012/02/06/Glacier-Hydro/

    Near total loss of glacial ice in B.C., Alberta expected by 2100, researchers say

    http://www.vancouversun.com/technology/Near+total+loss+glacial+Alberta+expected+2100+researchers/10949165/story.html

  47. Davy on Sun, 28th Jun 2015 6:05 pm 

    You guys might want to keep an eye on ZeroHedge over the next night and day. There is allot of noise on a rocky start to the week with the markets. We already seen a strong correction in China. The powers to be may call in the cavalry as usual and calm the savages but who knows the cavalry may be drunk at the bar or asleep at the post.

    http://www.zerohedge.com/news/2015-06-28/sp-futures-open-down-40-points-eurusd-plunges-over-200-pips

  48. shortonoil on Sun, 28th Jun 2015 6:09 pm 

    “By supply an demand I mean the indifference curves of price versus volume. Econ 101.

    “Price versus volume”??? That is P versus Q; a P/Q curve. For the last 100 years as price has increased so has demand. That is backwards for a Demand curve. It is time to throw out the Supply\ Demand nonsense. It has not worked for a century! It is also time to throw out the rest of the industry, Polly Anna, cheerleader junk. Petroleum is NOT about barrels, it is about energy, and the Laws of Nature say very definitively that there will be less and less of it from petroleum as time progresses. Since the energy from petroleum is a key component for the economy, there will be less, and less economy.

    The price is going down;

    http://www.thehillsgroup.org/depletion2_022.htm

    and the economy is following it! For the energy from petroleum to remain level production would have to increase by 2.3 mb/d per year. At $60/ barrel that is not going to happen!

    “Thanks Greg, Marmi’s little demonstration was too Marmi to believe but I was too lazy to dig into it further.”

    His quotes have been so distorted, so many times I don’t even bother to read them anymore. They are completely agenda driven to demonstrate that the world is one big ice cream cone being eaten in a rose garden.

  49. GregT on Sun, 28th Jun 2015 6:12 pm 

    “By supply an demand I mean the indifference curves of price versus volume. Econ 101.”

    A cult that refuses to acknowledge the basic laws of physics, biology, and mathematics, is a cult based on failed ideologies. eCON 101 is a false religion of complete ignorance and stupidity.

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