THE Oil Demand Thread (merged)

[0mar]

Growth kills any advances we make in reduction of demand. Within three or four years, all those gains are lost with increased demand.

It's useless to talk about conservation with our current economic model in place. Without growth, our economy grinds to a halt like a man getting shot point blank with a 12 gauge.

[NevadaGhosts]

With the world consuming around 82 million, 42-gallon barrels of crude a day and with demand expected to increase to around 86 million barrels in the second half of the year, non-OPEC producers such as Norway, Russia and Mexico could take up the slack

http://www.freep.com/money/business/oil18e_20050618.htm

Am I reading this correctly? World oil demand expected to increase by 4 million barrels per day for second half of 2005? If these numbers are true, we are in serious trouble. There is probably no excess world oil production left.

[I_Like_Plants]

Remember China and India are just entering the petroleum party, and trying their best to live their version of the USA's car-crazed 1950s.

[Ardalla]

<<With the world consuming around 82 million, 42-gallon barrels of crude a day and with demand expected to increase to around 86 million barrels in the second half of the year, non-OPEC producers such as Norway, Russia and Mexico could take up the slack.>>

I have no idea where they are getting this info. Norway, Mexico and Russia taking up the slack?! Are they just making stuff up?

Anyway I think 86 million is about the same figure as the 4th quarter of '04. No real surprise there.

[The_Toecutter]

Russia, Norway, and Mexico picking up the slack is a very cruel joke. It cannot be done. Refining capacity is at its peak, and oil is destined to peak within the next five years, if not peaking already. The after affects won't be felt until about 3 years after peak, so we still have some time, but nothing is being done, and odds are, nothing will be done. Peak will further enrich many already rich executives despite that the rest of us will be fucked, thus they want it to happen and will continue surpressing the most remotely viable alternatives.

Richard Deffeyes of Princeton predicts peak this year. We are simply watching it unfold before our very eyes.

[RG73]

Peak will further enrich many already rich executives despite that the rest of us will be fucked, thus they want it to happen and will continue surpressing the most remotely viable alternatives.

This logic doesn't hold much weight.

So executives want to end the fossil fuel lifestyle in order to further enrich themselves in a post-peak world in which their money will be useless and the only thing of value they will possess is land, which they won't know how to work, and which anyone with enough guns can just take from them?

No, the parsimonious answer is that executives are as myopic, self-interested, and short sighted as everyone else.

There aren't many alternatives that do not involve fossil fuels (your electric car requires considerable expenditure of fossil fuels to make all its components--and it needs fossil fuels to pave the roads it drives on) to at least get the infrastructure in place, and these alternatives are typically not as economically viable as oil, so they aren't supressed. They don't make money, so they don't come to market. There aren't any conspiracies, that gives humans too much credit. We're chimps who figured out a cool trick with fire a few hundred thousand years ago and have been elaborating on that principle ever since. But we're still dumb chimps and we do dumb things and we aren't exactly smart enough to have big grand conspiracies. Peak oil isn't happening because some executives are getting rich--peak oil is happening because too many people are demanding a finite resource.

[MicroHydro]

Peak oil isn't happening because some executives are getting rich--peak oil is happening because too many people are demanding a finite resource.

Yep. But the rich will try to stay on top of whatever is left after the oil is gone because that is what they do.

[Raxozanne]

BY DOUG MELLGREN, Associated Press Writer
Thu Jun 16, 2:54 PM ET


OSLO, Norway - The top oil officials from Mexico and Norway on Thursday said they do not have any spare capacity to help ease crude oil prices with increased supply.

The two non- OPEC members met the day after the oil cartel resolved to raise its oil production target by 500,000 barrels per day, a move that did little to ease crude prices of more than $55 per barrel.

Norway is the world's third largest oil exporter after Saudi Arabia and Russia, and is already producing at its full capacity of about 3 million barrels per day. Mexico is the third largest non-OPEC exporter, with most of its sales going to the United States.

"I'm not sure there is so much extra capacity in OPEC. But if there is any increased capacity, it has to be from OPEC," Norwegian Oil Minister Thorhild Widvey said at a news conference with her Mexican counterpart Fernando Elizondo Barragan.

Barragan said he hoped oil prices would stabilize at or a little below current levels, so the cost of crude does not harm the world economy.

Both countries have state-controlled oil companies, Statoil ASA in Norway and Petroleos Mexicanos, or Pemex, in Mexico.

Unlike Mexico, which has retained a government monopoly on its oil reserves, Norway welcomes private oil companies to its continental shelf and began the partial privatization of Statoil in 2001, now owning just over 70 percent.

Barragan said Mexico is also looking at ways of increasing cooperation with private oil companies, especially in the promising deep waters of the Gulf of Mexico, to provide capital and technology.

But Mexicans are concerned about loss of control and legal amendments would be needed to open the industry, the Mexican minister said.

Barragan, who was on a three-day visit to Norway, noted that Statoil has experience with deep water fields. "In Mexico, we are evolving rapidly and we are looking for successful models for exploration and production," he said.


Source: http://news.yahoo.com/news?tmpl=story&u ... xico_oil_3

[RG73]

Peak oil isn't happening because some executives are getting rich--peak oil is happening because too many people are demanding a finite resource.

Yep. But the rich will try to stay on top of whatever is left after the oil is gone because that is what they do.

I'm sure they will. They got rich by staying on top of things, resources and other people. But my point is that I very much doubt that they are guiding the world into some sort of apocalypse just to make more money. They are acting to pad their bank accounts--that this may have a side effect of hastening economic or energy collapse is not a conspiracy.

[The_Toecutter]

http://www.bloomberg.com/apps/news?pid=71000001&refer=&sid=aiwRNOjz1HRc

Oil Jumps Above $58 as Demand May Outpace Production Growth

June 17 (Bloomberg) -- Crude oil in New York surged above $58 a barrel for the first time since reaching a record in April on signs that producers will struggle to meet growing fuel demand during the second half of the year.

``There is no question that the market is going to $60,'' said Kyle Cooper, an analyst with Citigroup Inc. in Houston. ``There is a lot of fear and hype about the possibility of us running out of oil, and it has stuck.''

Global oil use will jump to 86.4 million barrels a day in the fourth quarter, 200,000 barrels more than forecast a month earlier, an International Energy Agency report showed this week. The world pumped an average of 83.8 million barrels of oil a day in the first quarter. U.S. crude-oil supplies fell 4.9 million barrels in the last two weeks, Energy Department figures show.

Crude oil for July delivery rose $1.12, or 2 percent, to $57.70 a barrel at 1:55 p.m. on the New York Mercantile Exchange. Futures touched $58.15 a barrel, the highest intraday price since a record $58.28 was reached on April 4. A settlement at the current price would be a record. Prices have risen 7.5 percent this week and are up 50 percent from a year ago.

Oil prices may rise next week as producers strive to meet growing demand from refiners, a Bloomberg survey showed. Thirty- five of 68 analysts and strategists surveyed, or 51 percent, said oil prices will increase next week. Eighteen, or 26 percent, said they will fall, and 15 forecast little change.

``Going over $60 will require a catalyst,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte. ``A major event such as a hurricane, massive crude-oil inventory draw, or destabilizing geopolitical event will be needed.''

The increase may accelerate if prices rise above so-called resistance at $58.28 a barrel, according to traders who watch charts to predict price movements.

$70 a Barrel

Crude-oil prices are likely to reach $70 barrel once they breach the record, said John Murphy, chief technical analyst at StockCharts.com. Oil futures in New York have exceeded the 200- day moving average since a dip in May. That suggests a 70 percent to 80 percent chance of oil's reaching $70, said Murphy.

``I don't think there's any doubt we're headed higher,'' Murphy said in an interview today. ``We had a correction and came back to the 200-day moving average,'' he said. ``If we get through $58, $70 will be the next big number.''

Prices rose in 1974 after an oil embargo that followed the Arab-Israeli war and from 1979 through 1981 after Iran cut oil exports. The average cost of oil used by U.S. refiners was $35.24 a barrel in 1981, according to the Energy Department, or $75.44 in today's dollars.

`Sudden and Unexpected'

``In the 1970s the rise in prices was sudden and unexpected,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts. ``We were more dependent on oil and the economy was weaker. The manufacturing sector was a bigger piece of the overall economy and was hit hard by the price rises.''

The Organization of Petroleum Exporting Countries agreed two days ago in Vienna to raise production quotas by 500,000 barrels a day to 28 million beginning on July 1, and left open the possibility of another gain by the same amount, if needed. OPEC members are already exceeding the new production target.

Russian Production

Oil output in Russia, which vies with Saudi Arabia for the position of top oil producer, rose an annual 2.1 percent in May, according to the Federal Statistics Service. That's less than a 3 percent annual increase in April. Russian output surged 8.7 percent in 2004, according to the IEA.

Russian output growth is faltering after tax charges against OAO Yukos Oil Co., the country's largest oil exporter last year, led to the confiscation of the company's biggest producing unit and slowed investment in the nation's oil industry.

In London, the August Brent crude-oil futures contract rose 95 cents, or 1.7 percent, to $57.17 a barrel on the International Petroleum Exchange. Prices touched $57.56, the highest since Brent reached a record $57.65 on April 4.

A security threat today forced the U.S., U.K. and Germany to shut their missions in Lagos, Nigeria's commercial hub. The West African country produces sweet oil that's easier to process into high-value fuels such as gasoline and diesel. Nigeria is the fifth-biggest source of U.S. oil imports.

The U.S. Senate is debating energy legislation that President George W. Bush has sought since he entered the White House in 2001. The House already has passed its version of the bill. Bush advocates increasing the use of coal, natural gas and nuclear power as well as fuel additives such as ethanol, to cut U.S. reliance on oil imports.

Record Profit

Valero Energy Corp., the top-performing Standard & Poor's 500 stock this year, said it expects second-quarter profit to rise to a record as margins on refined fuels widen. Valero is reaping profits as U.S. fuel consumption grows and discounts for cheaper grades of crude oil used in the company's refineries widen.

The profit margin for turning a barrel of oil into heating oil and gasoline is about $11.21 today, based on futures prices on the New York Mercantile Exchange. The margin, also called a crack spread, touched $14.49 in early April, the highest in at least 15 years.

Refinery Output

U.S. refineries operated at 96.7 percent of their capacity in the week ended June 10, the highest since July, the department's report showed. Production of distillate fuels rose 4.2 percent to a record 4.4 million barrels a day.

Heating oil for July delivery rose 1.15 cents, or 0.7 percent, to $1.637 a gallon in New York. Heating-oil futures are 59 percent higher than a year ago. Gasoline for July delivery rose 2.02 cents, or 1.3 percent, to $1.618 a gallon. The motor fuel is 36 percent higher than a year ago.

Gasoline prices also rose on the unplanned closure of a gasoline-making unit at the Royal Dutch/Shell Group's Deer Park, Texas, refinery, the sixth-largest in the U.S. The catalytic cracker, with a 67,000 barrel-a-day capacity, is being shut for 10 to 14 days for repairs, a Shell spokesman said in an e-mailed statement late yesterday.

This logic doesn't hold much weight.

So executives want to end the fossil fuel lifestyle in order to further enrich themselves in a post-peak world in which their money will be useless and the only thing of value they will possess is land, which they won't know how to work, and which anyone with enough guns can just take from them?

They'll have the oil. It will be money in a worst case scenario, and in the so-called 'doomer 1' scenario that seems most likely, it will simply be horrendously expensive, of which they will make a killing off of it if it were to hit $150, maybe $200 a barrel. The first half of the world's oil was selling for a hell of a lot cheaper than that!

There aren't many alternatives that do not involve fossil fuels (your electric car requires considerable expenditure of fossil fuels to make all its components--and it needs fossil fuels to pave the roads it drives on) to at least get the infrastructure in place, and these alternatives are typically not as economically viable as oil, so they aren't supressed.

You obviously didn't read my topic much. It was documented, fact after fact, that the oil industry even spent their own money to keep alternatives out of the mainstream, lobbied against legislation for their adoption, and even spread untruths about the technology with vicious ad campaigns. Even bought up a viable battery patent for a battery that could cost $4,500 per that would last 250,000 miles, allow 200 miles per charge in volume for 20,000 cars per year.

The oil that would be use to make the car is about as much as the oil used to make cars today. But the real benefit is the fact that after production, the car consumes no oil, affectively killing about 90% of its oil useage. Plus components can be fully recycled after they wear out, and reused, over and over and over again. An electric car's motor could have it last 30 years and 500,000+ miles, 4 times longer than a normal gas car.

As for the paved roads, the amount of oil they consume is minute compared to the amount of oil our current cars guzzle in fuel. Automobile fuel accounts for 40% of America's oil use. We could cut that 40% down to less than 5% with today's technology. More reductions in consumption could be made in other areas besides automobiles as well.

They don't make money, so they don't come to market.

Correction. They don't make as much money. They can still make money. EV businesses like AC Propulsion are pulling in net profits.

Peak oil isn't happening because some executives are getting rich--peak oil is happening because too many people are demanding a finite resource.

Again, you miss the point. We can reduce consumption of this finite resource drastically with today's technology without sacrificing too much of our lifestyle. At leastm today. When we have 8 or 9 billion people, then we're fucked, or if we let the oil decline go too far while remaining too dependent on it, we're also fucked.

Those people consuming most of the oil are ironically, us, the rich. The Earth produces annually enough resources for all working adults to attain about $5,000 GDP consumptionm, of which they will have to share with their families and such. Take an electric car, that in mass production would cost $15,000, and last 30 years? Guess what, we can still have our cars. We could make a Peru like income go farther if we increase efficiency, thus increasing standard of living. The key is in reducing the consumption associated with everything we do. You don't do that, and you don't have sustainability.

But capitalism as we know it, along with short term profits, are reliant on mass consumption. Either reduce consumption voluntarily by increasing efficiency, or peak oil will do it for us and collapse our economy, and maybe cause a mass dieoff, at least a dieoff worse than we see today. 30,000 children die each die from starvation, dehydration, and lack of medicine, not because we don't have the resources, but because they cannot afford what they need.

[KevO]

Yep. But the rich will try to stay on top of whatever is left after the oil is gone because that is what they do.

This is correct.
The rich don't want to think that they won't be rich so they wallow whilst they can and like everybody put any future decline to the back or out of their minds.
Look at the Arabs now
http://msnbc.msn.com/id/8270659/site/newsweek/

KevO

[agni]

Peak oil isn't happening because some executives are getting rich--peak oil is happening because too many people are demanding a finite resource.

Yep. But the rich will try to stay on top of whatever is left after the oil is gone because that is what they do.

Yea, while the poor altruistically just crawl to the bottom. /sarcasm Rich and poor people aren't that different.

-A

[khebab]

Am I reading this correctly? World oil demand expected to increase by 4 million barrels per day for second half of 2005? If these numbers are true, we are in serious trouble. There is probably no excess world oil production left.

hmm...It's a 4.88% increase, the historical demand growth is around 3.7%. This year is forecasted to be 2.0-2.5%. The world economy is supposedly in a soft patch right now, 4.9% seems a little bit too big.

[nth]

It is funny to see people thinking oil production and refineries are maxed right now. If it was, PO would have been last year.

Also, if we don't have refinery capacity, we will never know what the demand is. We measure oil production by measuring demand. Demand is dictated by refineries.

[nth]

It is funny to see people thinking oil production and refineries are maxed right now. If it was, PO would have been last year.

Also, if we don't have refinery capacity, we will never know what the demand is. We measure oil production by measuring demand. Demand is dictated by refineries.

[spudbuddy]

I think the eternal growth model is the problem.
Not surprised...that's why so many still deny the whole issue, and many others can't imagine any other kind of brave new world.
Just got a funny picture:
Imagine hordes of vigilantes roaming the countryside harrassing conspicuous consumers- (gas guzzlers run off the road, McMansion dwellers waking in the middle of the night to find burning crosses on their front lawn, giant needless neon signs shot out) all the while waving signs and placards proclaiming that this wasteage is un-American, anti-social, politically incorrect...
Cities look pretty at night, with all those lights...
How much of that light is actually necessary?

No doubt there's a lot of fat to trim. We only got fat because we could.
Too many people grabbed too much wealth that they never did anything to earn. It was easy. The great sweatless mob selling sweatshirts....
ironic, isn't it?

Personally, I never bought the model. The proceeds do not trickle down, were never designed to.

I don't see this picture as being a question of how much fat to trim.
If you put the horse back in front of the cart, then it becomes a question of prolonging a resource into the future that is workable and sustainable. That bigger picture should then dictate consumption.
(And I do mean dictate!)

If this model requires 3 generations worth of resources (instead of perhaps less than 1) then we cut consumption accordingly.

I think we should damned well notice the difference. I think we should be absolutely surrounded by indicators, constantly reminding us of this difference. It is exactly because people have not been forced to think conservationally (as opposed to conservatively) that we're headed up the creek.

We have been dictated to for a long time now, by the "needs" of big business. (sort of like a toothless teat-suckling baby) and it's time the dictation turns the other way.
Sorry....I have this tendency to think of PO standing for pissed off, sometimes.

[BabyPeanut]

Gasoline demand won't fall overnight
EDWARD LOTTERMAN
Posted on Sun, Aug. 21, 2005

When gasoline prices increase so much, why don't the amounts purchased fall accordingly? Economists hear that question a lot. After all, we teach students that demand is an inverse relationship between price and quantity.

At low prices, people typically buy a lot. As prices go up incrementally, quantities purchased drop. So why are gasoline sales steady right now?

The answer is that the degree to which quantities fall after price increases varies with the length of time involved. People can make only a few adjustments in the short run, but they can alter their consumption in the longer run. That is particularly true for gasoline.

"Elasticity" is the technical term for the responsiveness of quantity to price changes or vice versa. If the quantities people buy change a lot with price, demand is elastic. But if quantities don't change much as prices go either up or down, demand is "inelastic."

--More--
The article yammers on about combining trips and car pools and moving closer to work and maybe just maybe using public transportation but wouldn't dare mention that suburban sprawl is fundementally a diseased way of living doomed to die.

Knowledge of carpooling opportunities for school or community events is limited to a small circle of acquaintances.

In the longer run, more information is available and people can double up more often. Households also can sell big vehicles and buy smaller ones. This response takes time.

No, that's in the medium run. In the long run suburbia will be a slum.

[DantesPeak]

From my observations of the eastern US during my recent vacation: development is the fastest in the farthest suburbs - where also the largest homes are being built.

Not only is gasoline demand mostly inelastic, but the move towards using larger cars further in the suburbs (plus populaton increase) means gasoline demands are constantly increasing.

And no, I don't think consumers are about to part with those large vehicles recently bought in June and July at "employee discount days" - which produced record auto slaes.

[Eli]

High all!

I just got back from a 1600 mile car trip to Atlanta. What a trip it was.


I used to argue that suburbs where not going to die out and be that bad after PO now after my visit to Atlanta, I have now changed my opinion.

Sitting in bumper to bumper traffic on a 16 lane highway at 4:30pm has a way of doing that to you.

I still maintain that smaller towns will be ok with reasonable distances of like 10 mile commutes, but place like Atlanta are screwed.

The sprawl was breath taking, the traffic horrendous and there is no easy fix for the problem. Major changes to our nations transportation system are going to have to start at full pace overnight just to make the problem not suck quite as bad.

[MD]

Atlanta is screwed
LA is screwed
Boston is screwed
Tampa is screwed
Miami is screwed
Phoenix is BIG TIME screwed
Las Vegas is a screwed sewer
Houston is screwed
New Orleans is a FLOOD ZONE
NY is actually not quite as bad, but is still screwed