I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Sun Jul 25, 2004 5:52 am Post subject: 2005
I think that it's fair to assume that OPEC has not a drop of spare capacity left. With that out of the way it becomes much easier to look at the oil supply in the future.
We haven't got the kind of data like Campbell, but we, mere mortals, can compose a forecast for 2005 with the data available. I tried to put the pieces together and come up with a reasonable forecast for 2005.
First look at what happened in 2003. The production grew 2.7 mbd, but this was mainly due to the recovery of Russia and OPEC turning on its spare capacity. The depletion in the post-peak countries was about 1 mbd.
The depletion in the post peak countries is going to be higher in 2004 and 2005. This is mainly because of the accelerated depletion in UK, Norway and the USA. Both the EIA, the Norway and the UK government have given negative production forecasts for the period 2004-2005. If I put the numbers together I get something like 1.5-2.0 mbd decrease in the next one-and-a-half year.
Mexico China and Russia, which posted strong growth in 2003 have confirmed that they have hit a production ceiling. In the case of Mexico this seems permanent due to peaking of their Cantarell field which supplies 60% of their production (Pemex data). In Russia it is said to be to pipeline constraints. New pipelines will not be ready before end 2005. In China the situation also seems terminal, although some relief might be expected in 2006 from the Chinese sea.
So there won't be any growth from these countries.
That leaves Iraq, OPEC, Malaysia, Brazil and Canada as the only sources of significant growth in the world. For Canada a production increase of 100.000 bpd is predicted by the Canadian association of petrol producers. For Malaysia and Brazil such predictions are not known but realistically one cannot expect an increase of more than 50.000 bpd each. Iraq is the wildcard, but it is fair to assume that the country will stay unstable at least until the elections in 2005. Before that a strong output increase will remain out of the question. Recovery to pre-war levels would bring 0.5 mbd to the markets
So here we have the complete picture. The production in post peak countries is going to decline 1.5-2.0 mbd before the end of 2005. Production from the countries, which still have growth potential, will increase between 1.2 and 2.2 mbd before end 2005. I have to mention that this is based on political forecasts, and they usually tend to be too optimistic.
This means that, barring any nasty surprises, world production will stay relatively flat until the end of 2005. The most we can hope for is a 0.8 mbd increase.
But what we need is at least 3.0 mbd to satisfy demand growth in that period.
In other words, better fill up your tank, now you can still afford it.
Joined: May 15, 2004 Posts: 253 Location: Southeast USA
Posted: Sun Jul 25, 2004 7:03 am Post subject: Pushy Petro Batman!
Wow, that seems right on schedule with the Thanksgiving Day 2005 prediction. _________________ In the long run, men hit only what they aim at. Therefore, though they should fail immediately, they had better aim at something high.-Thoreau
Peak Oil
Joined: Apr 03, 2004 Posts: 6976 Location: My Grandkids' Farm
Posted: Sun Jul 25, 2004 10:25 am Post subject:
Does anyone have numbers for the new fields set to come online in’07 & ’08? I can’t remember where I read about them but it seems they were deepwater and would therefore be pushed to max extraction fast.
I also remember reading (with no source either) that the majors barely covered their costs of exploration in the last three years and nothing big was found last year at all iirc. _________________ Make a plan and work it:
Just when i've just about convinced myself that this site is only inhabited by crazed crackpot wierdos, or that peak oil is just some bizarre bad dream, Smiley posts something eminently sensible like this.
It's a little bit dated (Jan 04). He is expecting 3mb/d in 2005 and 2mb/d in 2006. On the other hand, he does expect some slippage...
Smileys predicted increase of 1.2 to 2.2 is a bit lower than the 3.0 mb/d Chris expects in Jan this year. Does someone know in more detail about this discrepency? With slippage of current projects, it would be feasible that Chris's 3.0 has dropped back into Smiley's range, but it would be nice if anyone can provide concrete data about which projects may have slipped, and, if applicable, which others have been brought forward...
Joined: Apr 03, 2004 Posts: 6976 Location: My Grandkids' Farm
Posted: Sun Jul 25, 2004 10:59 am Post subject:
Thanks whitecrab, that was the one.
Although it is six months old, the big projects take around six years to get going so it is still valid.
From the above link:
“If we look beyond 2007, however, the outlook becomes rather more problematic. Only three mega projects are so far known for 2007 and a further three for 2008. For 2009 and 2010 only the later stages of existing projects are currently known about. Consequently, the volumes of new production for this period are well below likely requirements.” _________________ Make a plan and work it:
Smileys predicted increase of 1.2 to 2.2 is a bit lower than the 3.0 mb/d Chris expects in Jan this year.
I made my assesment per country. I divided the world into countries which are still growing and countries in decline. I took the forecasted decline rates from the governments where possible and otherwise I took the historical decline rates.
Most of these new fields (thunder horse, mad dog) lie in declining countries. Their production has been incorporated in the forecast for the decline. They slow the decline so to speak.
Although this is a very crude method I think it is more accurate than looking at the megaprojects. The article about the projects wisely speaks about potential capacity. It lists the peak capacity but does not say when that peak is reached.
For instance the ACG magastructure Azerbaijan is listed to have a peak production of 1.0 mbd. However this peak will not be reached before 2008 as the project is developed in phases and most of the infrastructure still has to be build.
In 2005 it will probably not produce more than 300.000 bd, thereby reducing the forecast from 3.0 to 2.3 mbd.
But the lists does show some other things. In the news Saudi Arabia seems so determined to expand their production capacity. They are speaking of vast new reservoirs of oil, which they are going to tap into any minute now.
Yet in the list you find only two potential projects by Aramco and they are....
....indeed extensions of the prehistorical Ghawar and Qatif fields.
I wonder if you might know, Smiley, how do we know that Saudi Aramco doesn't have projects either in planning or preparation phase that they have not yet reported?
Or is this simply unheard of in the industry? Would it take too much to keep a lid on it, so to speak?
Saudi Aramco keeps its reserve numbers pretty close to its chest. How do we know they aren't doing the same with upcoming projects?
I think 2004 is the peak. Next year shall be the first year of plateau, as oil production stays around 80 billion barrels, with substitues substituting (as they tend to do) for the increase in demand. 2006 or 2007 will be the proverbial SHTF year, as we visibly begin to see supply outstripping demand.
I just can't see us ever producing more than 80 billion barrels, or maintaining that level for years. Even if we did maintain it, there would have to be a limit of how much demand could be fufilled by alternatives. Enviromental groups would prevent switching to nuclear or coal (not that those are really options over the next 3 years).
Just a theory. However, I will still hope for a 2008 peak, as that would at least give me time to get a degree. That may mean nothing in the future, but it may be the only real thing I achieve in my life. _________________ There'll be war, there'll be peace
But one day all things shall cease
All the iron turned to rust
All the proud men turned to dust
So all things time will mend
So this song will end
Next year shall be the first year of plateau, as oil production stays around 80 billion barrels, with substitues substituting (as they tend to do) for the increase in demand. 2006 or 2007 will be the proverbial SHTF year, as we visibly begin to see supply outstripping demand.
How so?
Quote:
I just can't see us ever producing more than 80 billion barrels, or maintaining that level for years.
Crystal ball?
Quote:
Even if we did maintain it, there would have to be a limit of how much demand could be fufilled by alternatives.
Evidence?
Quote:
Enviromental groups would prevent switching to nuclear or coal (not that those are really options over the next 3 years).
Hearsay.
Quote:
Just a theory. However, I will still hope for a 2008 peak, as that would at least give me time to get a degree. That may mean nothing in the future, but it may be the only real thing I achieve in my life.
What is the degree in, "advanced punditry"?
A degree is just a piece of paper. Education means knowing how to advance an argument and providing evidence through research. Go back and do your homework and don't just parrot what others say.
I wonder if you might know, Smiley, how do we know that Saudi Aramco doesn't have projects either in planning or preparation phase that they have not yet reported?
Because they would tell us. They don't want to upset the oil markets or invoke an oil crisis. If they would have some real projects in the pipeline they would tell us. They would love to back their statements up with evidence because it would only strengthen their cause.
I wonder if you might know, Smiley, how do we know that Saudi Aramco doesn't have projects either in planning or preparation phase that they have not yet reported?
Because they would tell us. They don't want to upset the oil markets or invoke an oil crisis. If they would have some real projects in the pipeline they would tell us. They would love to back their statements up with evidence because it would only strengthen their cause.
They do advertise these things in advance. I recently read that Iran is expecting to bring an additional 400,000 bpd of extraction online by March of 2005. They do not have the quota level to actually pump it, but I suspect that they are expecting quotas to be raised.
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