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PeakOil is You

THE International Energy Agency (IEA) Thread pt 3 (merged)

Discuss research and forecasts regarding hydrocarbon depletion.

Re: IEA : world set all time high oil supply record in 2011

Unread postby GoIllini » Thu 02 Feb 2012, 11:29:06

Cloud9 wrote:When oil reaches $200 a barrel we will set another all time record. We are not running out of oil. Haven't you heard? We are now steam cleaning sand for oil.

And? That means more supply and an economy better able to pay for advanced technology.

Energy supply is always something to watch out for. But we're swimming in natural gas, and might be soon swimming in oil. They are shutting DOWN natgas production to cope with the glut.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby ian807 » Thu 02 Feb 2012, 12:26:31

1) Oil is limited.
2) When you pump it faster, you use it up sooner.

Having a problem putting this together, are we?

For a look at how long it takes us to use up the oil that's energetically and economically profitable, I suggest you start reading the book referenced on this site: http://en.wikipedia.org/wiki/Cubic_mile_of_oil.

It has numbers. Do your best.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby TheAntiDoomer » Thu 02 Feb 2012, 12:30:22

I am soooo corny today. :)
"The human ability to innovate out of a jam is profound.That’s why Darwin will always be right, and Malthus will always be wrong.” -K.R. Sridhar


Do I make you Corny? :)

"expect 8$ gas on 08/08/08" - Prognosticator
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Re: IEA : world set all time high oil supply record in 2011

Unread postby dorlomin » Thu 02 Feb 2012, 13:51:53

meemoe_uk wrote:Cornucopian predictions have been shown to be correct again, continuing over a hundred years of correct predictions.
Bull.

Yet this fear is not borne out by the fundamentals of supply. Our new, field-by-field analysis of production capacity, led by my colleagues Peter Jackson and Robert Esser, is quite at odds with the current view and leads to a strikingly different conclusion: There will be a large, unprecedented buildup of oil supply in the next few years. Between 2004 and 2010, capacity to produce oil (not actual production) could grow by 16 million barrels a day -- from 85 million barrels per day to 101 million barrels a day -- a 20 percent increase. Such growth over the next few years would relieve the current pressure on supply and demand.
Link


Peak oil is about conventional oil. You cannot use geology to predict how many hectares of land are going to be given over to biofuels of one kind or another.

The majority of oil producing countries have peaked.

We have been on a pretty level amount of conventional oil being produced for near 7 years with slim pickings on projects coming on stream over the next couple of years.

There may have been some predictions of peak oil that have proven premature but to try leverage that into 'cornucopians have never been wrong' is rather wrong headed.
Peak oil is now predictions have been falsified again, continuing over a hundred years of failed predictions.
You mean the US is producing its all time highest bpd of conventional oil? No, then Hubbard got that one well and truly in the bulls eye. And the UK, Russia, Norway, Mexico, Libya, Indonesia etc etc. All past peak.
Last edited by dorlomin on Thu 02 Feb 2012, 13:54:02, edited 1 time in total.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby dorlomin » Thu 02 Feb 2012, 13:53:02

TheAntiDoomer wrote:I am soooo corny today. :)
As you are every post.
1. trite or banal

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Re: IEA : world set all time high oil supply record in 2011

Unread postby ian807 » Thu 02 Feb 2012, 14:49:19

In 1997, oil was under $20 a barrel (http://www.wtrg.com/oil_graphs/oilprice1947.gif).

In 2012, today, Brent crude is at $111 while regular crude is at $95 (http://oilprice.com/).

I guess that must be because there's just so much oil around. 'Cause that's what happens when a commodity is oversupplied. Prices increase. Right? Oh wait...
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Re: IEA : world set all time high oil supply record in 2011

Unread postby Satori » Thu 02 Feb 2012, 15:08:15

why there is so much oil around here
that the gas stations are actually paying people to take it off their hands :lol:
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Re: IEA : world set all time high oil supply record in 2011

Unread postby meemoe_uk » Thu 02 Feb 2012, 15:52:38

ian807 wrote:1) Oil is limited.
2) When you pump it faster, you use it up sooner.

Having a problem putting this together, are we?

No.
But one thing that peak_oil_is_now hypers, such as yourself have problems understanding is that cornies accept peak oil will happen some day because, for at least one reason, crude oil is effectively finite.
Yep.
We've been telling you this year on year, every year.
But you'll never grasp it.

What the IEA numbers fail to show is the declining EROEI of the new "reserves" (such as they are.) When the energy required to hydrogenate the the gunk and grow the liquor is factored into the net energy available to drive around the mall parking lot, we have certainly ended up with a number quantitatively much closer to just around 60mbpd give or take some.

Same protesting comments rehashed every year when the numbers come out.
Same mistakes.
EROEI doesn't necessarily go down from the starting date of oil use. It's the complexity and technology base of tools necessary for oil prospecting and extraction that goes up.
e.g. there might be 1 barrel of difficult oil available with bucket technology, but 1 million barrels of easy oil available with pick axe tech. The increasing difficulty lies in forging the new tech, NOT necessarily the oil extraction.
Now what has better ERORI, the hard bucket oil, where a man might spend some energy making a bucket, but then has to forage around for weeks mopping up swamps and filtering the swamp water for 1 bucketful of oil, or the man who spends more initial energy forging an axe, whacks the axe into a rock and sits back while a million barrels worth spurt out to form a new oil lake?
The same thing could be going on by analogy with todays advances in tech.
Whose to say?...

( by the way, this basic concept, typically learnt by engineer students in their foundation year, is out the reach of 98% of doomers. If you understand and apply it to your outlook on energy , then you're head and shoulders above the rest of 'em )

...
Certainly not the peak_oil_is_now hype gang.

2ndly, the ERORI for oil is still so extremely high, that _IF_ the ERORI is currently going down, it's at an insignifcant rate and amount. When it becomes cheaper to pay to pull your 1 ton car with 44 horses, or 280 men than to use a 33kW combustion engine and some petrol, you'll know the ERORI of oil is losing its economic edge. Currently, oil is so astronomically excellent for ERORI, any comparison with muscle power (or wind power) is a joke.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby ceasley7 » Thu 02 Feb 2012, 16:35:51

Score one for the cornucopians. Curious, has anybody reviewed the BP 2030 outlook. It seems very probable. Puts off the Peak for a while. It does state that OCED demand has topped and will regress 5 mbd due to efficiencies in cars and so what. I rather be in the optimist camp anyway.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby dsula » Thu 02 Feb 2012, 17:19:12

So that's it. We've got decades more, some reduced standard of living, slowly transitioning us into new territory. And I always thought there's going to be fast approaching mayhem and famine. I'm disappointed.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby kublikhan » Thu 02 Feb 2012, 17:50:25

Now what has better ERORI, the hard bucket oil, where a man might spend some energy making a bucket, but then has to forage around for weeks mopping up swamps and filtering the swamp water for 1 bucketful of oil, or the man who spends more initial energy forging an axe, whacks the axe into a rock and sits back while a million barrels worth spurt out to form a new oil lake?
The same thing could be going on by analogy with todays advances in tech.
Whose to say?...

( by the way, this basic concept, typically learnt by engineer students in their foundation year, is out the reach of 98% of doomers. If you understand and apply it to your outlook on energy , then you're head and shoulders above the rest of 'em )

...
Certainly not the peak_oil_is_now hype gang.
You can sit around throwing adhoms out or you can actually look up the data and see who is right. First, let's establish roughly how much energy the oil and gas industries use per dollar they spend:

Recent work in our lab suggests that when you divide the energy produced by the energy used by oil and gas industries that these industries use about 17 MegaJoules (MJ) per dollar spent in 2006. This is the energy intensity per dollar spent for seeking and producing oil. This compares to about 14 MJ per dollar for heavy construction and about 8-9 MJ per dollar as a societal average, so it seems to be in the right ballpark. If we assume 5 percent inflation since 2006 we might expect there to be used about 16 MJ per dollar spent by the oil and gas industries in 2008.
The IEA WEO 2008 from the Perspective of Biophysical Economics

So in 2008 dollars, the oil and gas industries uses about 16 MJ per dollar spent. Now lets look at how much these industries have to spent to pull oil out of the ground:
Image

A major problem with most new oil fields is that extraction costs are much higher than they are in fields like Ghawar. Even cheap, easily accessible oil in other places is quite a bit more expensive to get out of the ground than Saudi oil. The more the world relies on unconventional oil extraction, the less likely it is to ever see cheap oil again.

Cheap, easy oil is gone, but demand isn't going to go away. Alternative energy could become increasingly important, but it hasn't reached the point of fueling our transport system yet. Promising new oil fields are the best bet for the medium term and could offer substantial gains as production ramps up while the price of oil continues to appreciate. A number of major new oil projects have been in the Western Hemisphere, and many offer the promise of greater expansion.
Cheap Oil Isn't Coming Back

So we have 1950s era super giants producing at around $5 a barrel. And deepwater drilling at over $50 a barrel. At 16 MJ per dollar, that comes out to an energy cost of about 80 MJ per barrel for Ghawar and 800 MJ for deep water drilling. A barrel of oil has around 6100 MJ. That gives Ghawar an EROEI of 76:1 and deepwater drilling of less than 8:1 EROEI. Now these are not the exact numbers, but it is pretty clear that the EROEI of unconventional source like tar sands, oil shale, and deepwater drilling is much less than the EROEI of those old super giants like Ghawar. Thus I don't find your pick axe analogy particularly applicable here.

2ndly, the ERORI for oil is still so extremely high, that _IF_ the ERORI is currently going down, it's at an insignifcant rate and amount. When it becomes cheaper to pay to pull your 1 ton car with 44 horses, or 280 men than to use a 33kW combustion engine and some petrol, you'll know the ERORI of oil is losing its economic edge. Currently, oil is so astronomically excellent for ERORI, any comparison with muscle power (or wind power) is a joke.
I would hardly call going from 76:1 to 8:1 EROEI "insignificant". Also, low EROEI oil is expensive oil. Our economic engine runs on cheap oil. When that oil gets expensive our economy starts to sputter. You end up with recessions, high unemployment, inflation, stagflation, etc. You are not going to see 280 men pulling a car up a hill when oil prices climb. You are going to see that former car driver sitting at home unemployed because the economy is stuck in recession(demand destruction).

If history is any guide, another oil-induced recession may be just around the corner, at least for the United States and some of the other developed economies. Every time that the cost of oil relative to global economic output has hit current levels -- and that's even after sharp falls in spot prices this month -- it has heralded a slump.

And while economists and analysts say a serious slowdown can still be avoided, many add that unless oil and energy prices fall much further and -- most important -- stay down, the world economy could be in serious trouble. "We are in a danger area for the world economy," said Christophe Barret, global oil analyst at Credit Agricole.

The warning signal flashing is what economists call the "oil expense indicator": the share of oil expenses as a proportion of worldwide gross domestic product (GDP) (oil prices times oil consumption divided by world GDP). Since 1965, this has averaged roughly 3 percent of GDP, and it has only exceeded 4.5 percent during three periods: in 1974, between 1979 and 1985 and in 2008. Each period has seen severe global recessions.

Analysts differ on exactly how high oil prices need to be and how long they need to stay up before they slow growth. But most economists argue there is a level at which fuel input costs become incompatible with continuing economic growth.
Recession risk unless oil prices fall further
The oil barrel is half-full.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby kublikhan » Thu 02 Feb 2012, 18:04:06

Here's another source with charts of the EROEI of oil extraction. It shows the same trend that I described of falling EROI.
Image

EROI for finding oil and gas decreased exponentially from 1200:1 in 1919 to 5:1 in 2007. The EROI for production of the oil and gas industry was about 20:1 from 1919 to 1972, declined to about 8:1 in 1982 when peak drilling occurred, recovered to about 17:1 from 1986–2002 and declined sharply to about 11:1 in the mid to late 2000s. The slowly declining secular trend has been partly masked by changing effort: the lower the intensity of drilling, the higher the EROI compared to the secular trend. Fuel consumption within the oil and gas industry grew continuously from 1919 through the early 1980s, declined in the mid-1990s, and has increased recently, not surprisingly linked to the increased cost of finding and extracting oil.
Energy Return on Investment (EROI) for U.S. Oil and Gas Discovery and Production
The oil barrel is half-full.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby ian807 » Thu 02 Feb 2012, 19:21:00

It's actually a bit more complicated than that. The two factors you need to keep in mind are "oil production price" and "energy return." History shows us that over time, oil energy return decreases and production prices increase. Both of these are fairly clear trends as indicated by current prices and declining EROEI.

What makes this important is:
1) The world's transportation system is extremely dependent on liquid hydrocarbon fuels.
2) Any given product from the a supply chain depends on:
A) cheap transportation (i.e. cheap hydrocarbon fuels)
B) cheap energy (i.e. electrity and heat)
C) other supply chains that provide parts, infrastructure, transportation, communication, etc.

The problem is that as oil gets more expensive (forget running out, it never happens), and the energy return drops, there comes a point where it's no longer possible to keep the world's supply chains running.

First the peripheral chains of less essential goods drop out, but eventually, even the supply chains that maintain the process of energy production are no longer sustainable. If nothing is done to mitigate that problem ahead of time, we see a cascade failure of supply chains tha happens suddenly, and from the viewpoint of our human lifetime, irrevocably.

It's not a problem with oil, it's a systems problem of effectively using energy to keep goods and services moving in an organized way at a scale sufficient to keep everyone fed and clothed and sheltered from the environment. We can slow this down with conservation and the greater use of natural gas and coal, but in an international free market capitalist system, we can't really stop it. There's always someone willing to buy, regardless of consequences to others.

And this, in a nutshell, is the problem of peak oil.

Currently, we have cheap oil enough left for about 40 years, assuming we all share and share alike, no country hoards, the Middle East stays quiet and we all sing "Kumbayah." If the 45 - 75% actual recovery vs. technical recovery ratio holds (http://en.wikipedia.org/wiki/Extraction_of_petroleum), we run out of the good stuff in 20 - 30 years. Well, not run out exactly, but we'll be on the long tail. There'll be oil here and there, just not enough to run an industrial civilization at the present scale.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby meemoe_uk » Fri 03 Feb 2012, 07:09:09

Image
Nice graph kublikhan. Oil is worth extracting up to around $10,000 a barrel. Aside any other point, that oil sands and oil shale are around $50 to extract, just means we've got enough cheap oil for for over a hundred years. JD pointed this out years ago.

>Cheap Oil Isn't Coming Back
That's right. Because to come back, it has to 1st go away, and it hasn't done that yet. Oil is very cheap at $100, or even $200 a barrel. It's always been at least very cheap throughout history. The energy in a barrel of oil can move a 1 ton car 1600 miles in less than 36 hours.
You fancy doing this task using your back?
You think it's cheap to pay a man to move a car at this rate,
But expensive to use a $100 barrel of oil to do the same thing?

>That gives Ghawar an EROEI of 76:1 and deepwater drilling of less than 8:1 EROEI.
Bear in mind the EROEI figures that doomers come out with are highly biased in favour of doom, and are already taken from engineers worse case analysis, the EROEI of an average barrel is usually higher than 100:1. Deep water drilling is still developing and its efficency long term cannot be judged from its history. Otherwise that'd be like saying no point in steam engines or internal combustion engines, because the 1st generation of such engines were hopelessly inefficient, and frequently broke.
Also, given that we've got easily a hundred years of cheap oil shale and oil sands, why do we need deep water oil? Its an optional extra, used as practice to advance oil technology.

Our economic engine runs on cheap oil. When that oil gets expensive our economy starts to sputter. You end up with recessions, high unemployment, inflation, stagflation, etc.

These economic characterics have been constantly present for thousands of years in large economies and are caused by money changers, not by oil.

Image
And yet the US continues to increase oil output to 8.07Mbpd in 2011 and is expected to continue to increase this output in the years to come. The new golden age of oil ( 2001~ ) doesn't seem to recognise doomer charts which show oil becoming uneconomic 10 years ago.
The evidence falsifies your chart.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby dorlomin » Fri 03 Feb 2012, 07:21:42

meemoe_uk wrote:These economic characterics have been constantly present for thousands of years in large economies and are caused by money changers, not by oil.
Adam Smith.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby Cloud9 » Fri 03 Feb 2012, 08:01:46

Ever feel like Gilgamesh? You can’t talk to people who insist on sticking their fingers in their ears and humming loudly. It’s a waste of time.

I am going to till the ground, plant my garden and look to my stores. The rest of you can do what you will.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby Pops » Fri 03 Feb 2012, 09:25:14

Yep, we live in a world of bumper sticker slogans, just choose the headline that best matches the way your knee jerks.

Thanks for filling in the headline Kub and Ian.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
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Re: IEA : world set all time high oil supply record in 2011

Unread postby seahorse3 » Fri 03 Feb 2012, 09:34:17

I don't know anything about EROI, but as to the simpler ROI we as a society aren't getting much bang for all the bucks we are spending on oil or energy. Although we may yet be increasing that little extra we got sure cost a lot andnit didn't help anything. It's costing us more than ever and we're still mired in recession. The system we are living in, commonly referred to as BAU is broken. So, the Simole ROI on our money isn't good.
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Re: IEA : world set all time high oil supply record in 2011

Unread postby SeaGypsy » Fri 03 Feb 2012, 09:55:19

kublikhan wrote:
2ndly, the ERORI for oil is still so extremely high, that _IF_ the ERORI is currently going down, it's at an insignifcant rate and amount. When it becomes cheaper to pay to pull your 1 ton car with 44 horses, or 280 men than to use a 33kW combustion engine and some petrol, you'll know the ERORI of oil is losing its economic edge. Currently, oil is so astronomically excellent for ERORI, any comparison with muscle power (or wind power) is a joke.

I would hardly call going from 76:1 to 8:1 EROEI "insignificant". Also, low EROEI oil is expensive oil. Our economic engine runs on cheap oil. When that oil gets expensive our economy starts to sputter. You end up with recessions, high unemployment, inflation, stagflation, etc. You are not going to see 280 men pulling a car up a hill when oil prices climb. You are going to see that former car driver sitting at home unemployed because the economy is stuck in recession(demand destruction).


That was polite response to one of the dumbest comments on the subject I have ever seen by someone who claims to know what they are talking about.
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