Sprott says we're looking at an 8% decline rate. Do the math, that's a nine-year halving time. 84mbd to 42mbd. I think we're pretty much all in agreement that we're peaking in 05, maybe 06. Nine years puts us out at 2015 at the outside til we're at HALF the production we're at now.

That's just a real stunning couple of numbers to digest.

Two years ago when I found out about this whole thing, I figured I had that long til we peaked! Now, it looks like we'll be in full tilt boogie meltdown by then.

What do you guys think?

Remember, you also have to factor in the new production, which will offset the decline somewhat (but we'll probably still have a shortfall). Also, we supposedly have those mega projects coming online in 2007-08.

Scary article, though, and it makes a strong argument that this is the year.

Sprott is a CA - that is Certified Accountant? He is no geologist.

If you want comfort, the US is only down 40%, now 35 years after peak.

If you want to be scared, the UK North Sea dropped 17% in a single year.

World rates are moderated by (small) new discoveries, so the world decline will be less than the median for individual wells.

There is a great deal of debate about what intermediate number is correct for the world as a whole. Probably 2% to 5% decline per annum in the first decade after leaving the peak plateau.

I guess you have to ask yourself who Eric Sprott is and where these numbers come from. If they are valid then HOLY SHIT

I don't think it will be that bad, if it was that bad the ultimate recovered reserves would end up much lower than anyone expects. I guess it could be true if all the OPEC books are as cooked as Campbell suggests and if that figure is only talking about conventional oil though.

But we still had good size oil finds that came into production after the peak in 1971 to mitigate the decline! The world picture looks a bit gloomier than the USA's peak.

You can't deduce from the 8% decline per field that world production also declines by 8%. This is a simple result from statistics. Each individual field can be modelled by an approximate Bell shape curve. World production is simply the sum of all fields in the world. But since the fields are spread out over time (some fields peak earlier than others), the sum turns out to be a Bell shape curve with a much larger standard deviation. Hence, decline rates will be much lower.

There's also the distinct possibility that once oil depletion becomes obvious, nations and other entities may hoard their oil or make it unavailable for export to countries short on supply.

For instance, the U.S. has been trying to assassinate Venezuela's Hugo Chavez, a popularly elected leader who now appears to be planning to export oil to China rather than the U.S.

And since U.S. troops may be mired in the ME forever, there will be no chance to invade Venezuela. In fact, the U.S. may essentially be bankrupt in a few years because of its war on terrorism and its debt-ridden economic system.

Matthew Simmons has also pointed out that ME countries have fast-growing populations, and may need what's left of their oil for their own use.

Eight percent depletion might someday soon wonderful to oil-starved Americans.

I read an article a while back that was looking at countries with the capacity to increase production but also looking at their growing population and increasing local demand. Any increase in production was likely to be taken up internally, never reaching the world market.

We may or may not see a supply crisis in the 4th quarter. The Saudis may be able to pump 3-4 mbd from storage for a few months.

Right the "net import/export" idea. As oil rich nations grow, they use more and more of their own oil production and therefore have less to export each year. Coupled with oil production declines, some countries can be out of the oil producing picture quite soon. I have read that Mexico will become a net importer of oil as soon as 2012!

I am with Ayoob. I think this whole oil crisis will happen very quickly. The USA has the most ground to loose since we import %60 of our oil.

What you are missing in this discussion is the economic impact of any type of supply shortage. I would suggest that the US economy, in particular, is extremely sensitive to even one or two years of shortened supply. We aren't going to need to wait for supply to be halved before very bad things happen to the world's economies.
Also keep in mind the reaction of the power elite and the citizenry. Both are likely to panic in one form or another and that will compound the purely technical problems exponentially.

Lower US 48 oil producing states - Conventional extraction

Current major fields - MRE

See North Sea depletion rate \ Ybel depletion rate etc...

how come the US doesn't use MRE? I would of thought those evil, greedy american producers would be first up to maximise production

PB

Beside decline itself, we could also try to to determine how much percent of the oil extracted will be sweet crude? And will we have enough natural gas to process it?
"I've a bad feeling about this" (tm)

10% world decline is not impossible to me, as the situation is not identical to USA one in 1970. We can drill faster and better with the technologies currently online, but with the major inconvenient to run dry faster...