THE EIA Thread pt 2 (merged)

[OilFinder2]

A nice prediction for cornucopians to be sure. The US economy wont remain in recession/depression unitl 2030 and thats the only way you have demand remain flat.

At some point in a few years out we manage some sort of attempt at a recovery and this will mean increased demand. Maybe not towards older predictions but its kind of silly to believe we can manage an alternatives "magic trick" which is what will be required to see demand remain flat.

This is just more evidence that there is little surety as to where we go with demand and supply. We are in uncharted waters and not a lot of traditional thinking is making sense.

That's not quite what they're saying. They're saying that crude oil demand will be flat, but any increase in liquid fuel consumption would be made up by increased ethanol consumption. As the first paragraph says:

U.S. oil consumption will be flat through 2030, as the use of biofuels, rising oil prices and new car efficiency standards temper demand for petroleum, the Energy Information Administration said.

[JohnDenver]

A nice prediction for cornucopians to be sure. The US economy wont remain in recession/depression unitl 2030 and thats the only way you have demand remain flat.

I'm not sure why you use the term "cornucopian" for the position that demand for oil will peak and decline, making peak oil manageable. Personally, I think "cornucopian" applies better to the peak oiler position -- i.e. that demand for oil has no limits, and will always increase.

This is just more evidence that there is little surety as to where we go with demand and supply.

IIRC, there was plenty of surety about demand and supply from the peak oiler camp, until very recently. Word was that supply was going to drop and demand was going to soar, i.e. Matt Simmons: "In seventeen years the world’s demand for oil may well be more than 50 percent greater than it is today, while production capacity may well sink to 1985 levels." Link

[JohnDenver]

Here's another data point in a similar vein...

Japan's new auto sales likely to fall below 5 mln units in 2009
TOKYO, Dec. 18 (Xinhua) -- Japan's new vehicle sales are likely to fall by 4.9 percent year-on-year to 4.86 million units in 2009,sinking below 5 million for the first time in 30 years, the Japan Automobile Manufacturers Association said Thursday.

Link

The stats at JAMA show that Japanese vehicle sales peaked in 1990, and have been declining ever since.

It turns out that younger Japanese people are losing interest in cars:

Kimiyuki Suda should be a perfect customer for Japan's carmakers. He's a young (34), successful executive at an Internet-services company in Tokyo and has plenty of disposable income. He used to own Toyota's Hilux Surf, a sport utility vehicle. But now he uses mostly subways and trains. "It's not inconvenient at all," he says. Besides, "having a car is so 20th century."

Suda reflects a worrisome trend in Japan; the automobile is losing its emotional appeal, particularly among the young, who prefer to spend their money on the latest electronic gadgets. While minicars and luxury foreign brands are still popular, everything in between is slipping. Last year sales fell 6.7 percent—7.6 percent if you don't count the minicar market. There have been larger one-year drops in other nations: sales in Germany fell 9 percent in 2007 thanks to a tax hike. But analysts say Japan is unique in that sales have been eroding steadily over time. Since 1990, yearly new-car sales have fallen from 7.8 million to 5.4 million units in 2007.

Alarmed by this state of decay, the Japan Automobile Manufacturers Association launched a comprehensive study of the market in 2006. It found a widening wealth gap, demographic changes—fewer households with children, a growing urban population—and general lack of interest in cars led Japanese to hold their vehicles longer, replace their cars with smaller ones or give up car ownership altogether. "Japan's automobile society stands at a crossroads," says Ryuichi Kitamura, a transport expert and professor at Kyoto University. He says he does not expect the trend to be reversed, as studies show that the younger Japanese consumers are, the less interested they are in having a car.

Link

Doesn't jibe too well with the theory of the demand cornucopians.

[AirlinePilot]

JD,

Im just not in the "demand cratering" camp yet. Give it time. Im still not buying that demand, global demand that is, has dropped very much at all. Yes its down, but the price collapse is only partially driven by this demand drop. I'm with rockdoc on the premise that its more about a speculative downward trend and has very little to do with actual demand numbers. That trend is very temporary and we'll know it soon enough.

[BigTex]

It's going to be sort of like the cartoon below, except it would read:

Midway through peak oil, humanity pulls out a bigger supply of fossil fuels.

[mos6507]

Doesn't jibe too well with the theory of the demand cornucopians.

Now if the US had Japan's level of public transit, maybe that would be replicated here.

[TreebeardsUncle]

So will bio-fuels and electric sources subsitute for oil so that the effects of peak oil production will be very moderate? I was hoping that the effects of oil supply declining would be so great as to greatly reduce the number of folks driving cars(down to around 10% of the current number) and do in most of American suburbia.
g

[aahala2]

"U.S. oil consumption will be flat through 2030"

I tend to agree with the above.

However the timing or effect of recession, possible increases
in efficiency or ethanol, no one can consume more than there
is.

So if you believe the US will consume much more in 2030 than
now, then you must believe peak is several decades away, or
peakoil theory isn't true at all.

[yesplease]

JD,Im still not buying that demand, global demand that is, has dropped very much at all. Yes its down, but the price collapse is only partially driven by this demand drop. I'm with rockdoc on the premise that its more about a speculative downward trend and has very little to do with actual demand numbers. That trend is very temporary and we'll know it soon enough.

FWIW, in 2007 world consumption increased as the year progressed, up ~1mbpd at the end compared to the middle. In 2008 world consumption decreased by ~1mbpd as the year progressed. Considering that the price increase earlier this year was the result of a ~.1mbpd shortfall between consumption and production, a ~2mbpd difference in behavior, if sustained, is definitely significant.

[yesplease]

So if you believe the US will consume much more in 2030 than now, then you must believe peak is several decades away, or peakoil theory isn't true at all.

If world consumption declines, the U.S. can increase it's own liquids consumption w/o world production increasing past it's peak. We can also increase biofuel production, and as usual do a bit of both. It's technically possible for the U.S. slightly increase liquids consumption while still seeing a peak in world oil production, even if it's not likely.

[kublikhan]

A nice prediction for cornucopians to be sure. The US economy wont remain in recession/depression unitl 2030 and thats the only way you have demand remain flat.

At some point in a few years out we manage some sort of attempt at a recovery and this will mean increased demand. Maybe not towards older predictions but its kind of silly to believe we can manage an alternatives "magic trick" which is what will be required to see demand remain flat.

This is just more evidence that there is little surety as to where we go with demand and supply. We are in uncharted waters and not a lot of traditional thinking is making sense.

This is not true. You can grow your economy and flatline/shrink your oil usage.

using less oil does not mean economic collapse. Since 1980, consumption is actually down in the Europe big four by 9.1%

Oil Consumption: How does Today Compare to 1980?

[TheDude]

You can grow your economy and flatline/shrink your oil usage.

using less oil does not mean economic collapse. Since 1980, consumption is actually down in the Europe big four by 9.1%

Oil Consumption: How does Today Compare to 1980?

As I keep pointing out, the developed nations did a fair amount of fuel switching for electrical consumption (from oil to NG in the US, oil to nuclear in Europe) that accounted for a substantial part of that reduction. Your man neglects to bring up this point, nor the rapid advances in vehicle fuel economy that also contributed. Whether the latter feat can be replicated depends on the outcome of the major automakers in the next few years, and credit becoming available for loans; a similar advance could come from using our existing auto fleet and optimizing mileage - those storied well-inflated tires. The former savings in oil consumption from fuel switching is a thing of the past - poorer countries' chance of switching over to different fuel stocks would depend on their circumstances and degree of dependency on oil - which in a world of shrinking supply they'd be the first to be priced out.

Secondly, using less oil does not mean economic collapse. Since 1980, consumption is actually down in the Europe big four by 9.1%, and Japan's consumption is up only 4.6%. Despite our consumption rising by 20.7% over that more than a quarter-century span, as a percentage of the world it actually fell.

[TheDude]

I'm not sure why you use the term "cornucopian" for the position that demand for oil will peak and decline, making peak oil manageable. Personally, I think "cornucopian" applies better to the peak oiler position -- i.e. that demand for oil has no limits, and will always increase.

Decreased demand isn't the primary factor in the current suppression of price, deleveraging is.

[yesplease]

Decreased demand isn't the primary factor in the current suppression of price, deleveraging is.

Yes, no, maybe so? Oil increased in price while consumption was greater than production and decreased while production was greater than consumption, less the month lag needed for information from last month to come in. OPEC's recent cut has changed that, but we can at least say that there was a strong correlation between oil prices and demand. Given it's behavior, the drop from $145 to ~$60-80 seems to be associated w/ the drop in consumption, and the drop from $60-80 to $40 is associated w/ speculation regarding the predicted global recession. I bet if you researched it thoroughly you could figure what exactly was associated w/ what but w/o more data I can't separate the two.

[AirlinePilot]

Correlation? Maybe. Im not buying into that right now. A few million bbl/day on the global scale isnt commensurate with the price collapse we have seen. There is no getting around that logic. Something else is going on, be it deleveraging, deflation, manipulation, etc. Its probably a bit of all these, but its just not logical to keep pointing to demand being THE reason. Its just silly.

I agree its possible to grow economies without increasing consumption. I just dont believe we are going to attempt it, not for quite a while yet. There just isnt enough scalability in any replacement to crude at the moment. I doubt we change that anytime soon for it to become possible. There just isnt enough emphassis or leadership yet steering that in the right direction.

Just my opinion.

[cat]

Wait, am I missing something? Didn't they say that consumption would be flat, and isn't that different than demand? If oil production will be flat or in decline, as they seem to be saying in a round about sort of way, then wouldn't it follow that consumption of oil would be down or flat too, even if people want it? You can't use what you don't have.

[kublikhan]

You can grow your economy and flatline/shrink your oil usage.

using less oil does not mean economic collapse. Since 1980, consumption is actually down in the Europe big four by 9.1%

Oil Consumption: How does Today Compare to 1980?

As I keep pointing out, the developed nations did a fair amount of fuel switching for electrical consumption (from oil to NG in the US, oil to nuclear in Europe) that accounted for a substantial part of that reduction. Your man neglects to bring up this point, nor the rapid advances in vehicle fuel economy that also contributed. Whether the latter feat can be replicated depends on the outcome of the major automakers in the next few years, and credit becoming available for loans; a similar advance could come from using our existing auto fleet and optimizing mileage - those storied well-inflated tires. The former savings in oil consumption from fuel switching is a thing of the past - poorer countries' chance of switching over to different fuel stocks would depend on their circumstances and degree of dependency on oil - which in a world of shrinking supply they'd be the first to be priced out.

For fuel switching away from oil for electrical production, I can't see that as anything but a good thing. Oil is far to valuable to waste generating electricity when there are many other ways to generate electricity. As for fuel efficiency gains, I see no reason why the US can't implement European style reforms in order to bring about a similar reduction in oil consumption.

Right now, the average fuel economy in the European Union is over 40 miles per gallon. Japan is even better at over 45. The U.S. lags far behind with an average in the mid 20’s.

Fuel Efficiency and Lessons From Europe

[yesplease]

Correlation? Maybe. Im not buying into that right now. A few million bbl/day on the global scale isnt commensurate with the price collapse we have seen. There is no getting around that logic.

If you accept that the increase in price was due to supply and demand, according to the EIA's global production and consumption figures for 2007 and 2008, then the decrease must be as well since oil's change in price compared to the difference between consumption and production over the past couple years has a Spearman's rho large enough to make supply/demand the horse to bet on.

Something else is going on, be it deleveraging, deflation, manipulation, etc. Its probably a bit of all these, but its just not logical to keep pointing to demand being THE reason. Its just silly.

Technically speaking it was almost all about supply and demand, since the credit bubble really screwed w/ the income elasticity of demand, but I suppose that w/o the 2.4 trillion bucks in easy credit that popped up we wouldn't have been able to fund $145/bbl, probably falling back more gradually at some lower price. Granted, w/o market transparency, we don't know who took what positions, so it's possible that vested interests did manipulate the market, but without the appropriate data who knows?

I agree its possible to grow economies without increasing consumption. I just dont believe we are going to attempt it, not for quite a while yet. There just isnt enough scalability in any replacement to crude at the moment.

If history is any guide we probably will grow the world economy while decreasing oil use over the next decade or so, but maybe this time will be different.

[hermit]

EIA says that there won't be much increase in nuclear. This seems inconsistent of my understanding of FF availability. Looking at the following page: link

and look at the graph "World marketed energy use by fuel 1980-2030" jpg

These statistics are global as far as I can tell, but don't make sense - There's so much more nuclear being built already around the world. Can anyone help make sense of this?

[Tanada]

EIA says that there won't be much increase in nuclear. This seems inconsistent of my understanding of FF availability.

Looking at the following page: http://www.eia.doe.gov/oiaf/ieo/highlights.html

and look at the graph "World marketed energy use by fuel 1980-2030"
http://www.eia.doe.gov/oiaf/ieo/images/ ... 2small.jpg

These statistics are global as far as I can tell, but don't make sense - There's so much more nuclear being built already around the world.

Can anyone help make sense of this?

Sure, the EIA report you cited is projecting a 21 Mbbl/d increase in conventional oil supplies plus an increase of 7.2 Mbbl/d of unconventional oil supplied to the market. I don't think very many people on this web site would agree with the former projection, personally I think the latter is possible.

For the Natural Gas figures, in 2005 I would have said they are impossible but since then the shale gas projexcts have paid off big time and now I see them as possible.

Sadly I think the coal projection is also accurate, a lot more of that filthy stuff is going to be extracted and burned. Unless the next President really does fight coal tooth and nail the stuff will remain the cheapest FF in the suite of fuels.

For nuclear I think their projection is far too low, the UK is rethinking its position for fission electricity production and the other western european countries are also giving it a hard second look in the light of climate change and convienience.