Peak Oil is You

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Page added on October 25, 2018

Peak Oil or Peak Demand?

Following the dawn of the oil industry in the 1800s, demand for oil steadily grew. Initially driven by demand for kerosene as an illuminant, the world’s thirst for oil accelerated with the mass adoption of the internal combustion engine.

But the demise of the oil industry has been predicted throughout its history. A 1909 newspaper article from Titusville, PA—where the U.S. oil rush began—contained predictions by the United States Geological Survey that petroleum supplies would be exhausted within 30 years. But the oil industry instead simply moved west.

Subsequent predictions came and went. The most famous peak oil prediction was from Shell geophysicist M. King Hubbert. In a 1956 paper, Nuclear Energy and the Fossil Fuels, Hubbert suggested that oil production in a region would approximate a bell curve, increasing exponentially during the early stages of production, reaching a peak when approximately half of a field had been extracted, and then going into terminal production decline.

Hubbert is credited with accurately predicting the peak of U.S. oil production in 1970, but the truth is more nuanced.

In his 1956 paper, Hubbert estimated the ultimate potential reserve of the Lower 48 U.S. states and offshore areas at 150 billion barrels of oil. He then calculated that U.S. oil production would peak in 1965.

Hubbert’s 1970 prediction was a contingency case. This prediction would require U.S. reserves to be 200 billion barrels, but he noted skeptically that this would imply a yet-to-be discovered “amount equal to eight East Texas oil fields.”

U.S. oil production did initially peak in 1970, albeit at a production rate nearly 20% higher than Hubbert predicted. Hubbert also projected that the global peak in crude oil production would occur around the year 2000 at 34 million barrels per day (MMbpd). But crude oil production in 2000 was more than twice as high at about 75 MMbpd.

Defying Hubbert’s predictions, global oil production has risen by 18 MMbpd since 2000, setting record highs in each of the past eight years. In the past five years, annual oil demand growth has risen at nearly 1.3 MMbpd each year.

As peak oil interest faded, a new hypothesis began to take its place. This new idea was that oil production would indeed fall, but it would be induced by falling demand instead of falling supplies. The consequences of this “peak demand” scenario were quite different from the peak oil scenario.

A peak oil scenario implies much higher oil prices as supplies struggle to keep up with demand. A peak demand situation, on the other hand, means plunging oil prices as the world economy simply transitions to another form of energy. The rapid global growth of electric vehicles (EV) are a primary driver leading to peak oil demand.

The idea that oil demand will peak within the next decade or so has become widely accepted, even with major oil companies. BP has forecast a peak in oil demand in the late 2030s, while Shell has suggested it could happen as early as 2025.

Global quality assurance and risk management company, DNV GL, predicted in its 2018 Energy Transition Outlook that oil demand would peak in 2023, which it sees being driven by “a shift to battery or hydrogen fuel-cell vehicles in domestic and commercial transport, and the increased efficiency of next-generation combustion engines”.

More likely, in my view, is the outlook in the recent report Rivalry: The IHS Markit View of the Energy Future (2018-50). Notably, IHS Markit expects global oil consumption to continue growing by an annual average of 1.1 MMbpd through 2030. IHS Markit doesn’t see oil demand slowing until the 2030s because of fuel economy gains and competition from electric vehicles.

One thing all these outlooks have in common is the implication that oil demand will continue to rise from today’s level. IHS Markit sees oil demand peaking in the early 2030s at 15 MMbpd higher than 2017 demand. As a result, and because of depletion in existing fields, these reports all agree that the oil industry will remain vital, and that substantial investments in the oil industry are still needed.

Otherwise, a widespread belief in peak demand could lead to underinvestment in the oil sector, leading to shortages and price spikes ahead of the arrival of peak demand.

RIGZONE

47 Comments on "Peak Oil or Peak Demand?"

Cloggie on Thu, 25th Oct 2018 7:52 pm

“Otherwise, a widespread belief in peak demand could lead to underinvestment in the oil sector, leading to shortages and price spikes ahead of the arrival of peak demand.”

…which will lead to a further rush into renewables, leaving oil and gas behind for good.

Anonymous on Thu, 25th Oct 2018 8:10 pm

He’s recycling some old content. Have seen the Hubbert crit before from RR.

Other than that, it is up to debate if the 56 paper was lower 48 or not. Just says US but does not say territories excluded. Also, Deffeyes, a friend, said it included AK. Others have said AK was included as the Pratt paper he mainly cites included AK.

GetAVasectomyAndLetTheHumanSpecieDie on Fri, 26th Oct 2018 1:58 am

Every natural ressource is depleted you see more and more news like this

Electrolux profit dinged by raw-material costs

https://www.marketwatch.com/story/electrolux-profit-dinged-by-raw-material-costs-2018-10-26

So happy to see that Whites people have decided to stop reproducing. It will be funny to watch shit brown skin fight each other. You can count on Whites people to do the right thing.

Go Speed Racer on Fri, 26th Oct 2018 2:02 am

HEY EVERYBODY !
I’m BAAACK.
Did everybody miss me?

GREAT NEWS. Foudn a great new way
to get rid of the leaves, in the fall.

https://www.youtube.com/watch?v=K8FwMlkoxjI

forbin on Fri, 26th Oct 2018 2:12 am

peak oil = peak demand

not about running out or any other “thing” people want to hang on it

just a mathematical point in time when supply as at its maximum for what ever reason.

the dynamics of oil supply is another matter

Forbin

Antius on Fri, 26th Oct 2018 3:28 am

“…which will lead to a further rush into renewables, leaving oil and gas behind for good.”

I am sceptical. Obviously, I would like to see it happen, but I have some doubts that it will.

Oil is a transportation fuel. Battery electric vehicles running on grid electric power (some of which is renewable) have made some modest inroads into the private transportation sector thus far, because: (1) Electricity is not taxed in the same way as transportation fuel and is cheaper at the point of use; (2) There are subsidies reducing the purchase cost of EVs; (3) There are subsidies encouraging the building of recharging infrastructure, which is relatively sparse and lightly used at present; (4) There is public enthusiasm for the idea and a significant minority of people with enough free cash willing to tolerate the limitations of electric, because they like the idea of it.

There are a number of headwinds that are blowing against EVs that will blow stronger in the future, as we enter full blown economic depression.

(1) Capital costs are higher than traditional IC vehicles and are likely to remain so. As disposable income shrinks in the coming depression, the number of people able to afford these vehicles will shrink;

(2) As government budgets come under increasing pressure, subsidies for both vehicles and charging infrastructure can be expected to dry up;

(3) As the number of EVs increases, government revenue from fuel tax will taper off and decline. There will be increasing pressure for governments to tax electric power for road use;

(4) Charging electric vehicles creates a lot of problems. For consumers, it is less convenient, because recharging takes a lot more time than filling up at the pump and there is still a lot of uncertainty about finding a recharging point. Fast charging vehicles partially solve that problem, but place a lot more strain on the grid. If EVs are adopted on a large scale, rapid charging at similar times of day will create huge spikes in demand that will end up being met by open cycle gas turbines. The real reduction in fossil fuel use achievable by EVs may not be as impressive as it first appears;

(5) At present, renewable energy meets a modest but growing proportion of electricity supply in developed countries. The supply is small enough that legacy fossil fuels plants often with long amortized capital costs can serve as back-up with only a modest increase in total costs. As these plants gradually retire and renewable energy meets a greater proportion of power supply, expect a step change in the cost structure of renewable electricity. This will occur as you need to build dedicated back-up plants and storage infrastructure. We have discussed ways of reducing that burden, by switching heating loads to grid controlled storage heaters. But there is no chance whatever of actually reducing total energy costs compared to present by switching to wind and solar on a larger scale. It is inevitable that electricity costs will rise relative to oil over the next decade;

(6) Ironically, as we enter depression triggered in part by increasing cost of energy; oil prices may decline for some time, along with the price of all other commodities. EVs may find themselves competing against cheaper gasoline, just as their own costs start to rise and their customer base shrinks.

I hope to be wrong of course. But I believe EVs will struggle to compete with energy rich fuels that nature is providing almost free of charge. The future is likely to be a poorer and shabbier version of the present, with the same basic technologies and a lot more angry poor people.

Cloggie on Fri, 26th Oct 2018 3:38 am

“Battery electric vehicles running on grid electric power (some of which is renewable) have made some modest inroads into the private transportation sector thus far”

Record profit Tesla:

http://m.spiegel.de/wirtschaft/unternehmen/tesla-erzielt-rekordgewinn-die-spaete-rache-des-elon-musk-a-1235115.html

makati1 on Fri, 26th Oct 2018 4:01 am

Is Trump to be a Nixon redo”

“To learn why Richard Nixon was really blown out of the White House, you could begin with the infamous Nazi chemical/pharmaceutical cartel, IG Farben. The cartel that pushed Hitler over the top into power in Germany….

A new world was coming into being, and mega-corporations and cartels were at the heart of it. They would be the engines driving the global economy and pillaging the natural resources of the planet….

So now you see the reason why these treaties like GATT and NAFTA and CAFTA have been launched. Mega-corporations want to roam free. They want to be able to inject money into any entity in the world and suddenly remove it at will. They certainly want to be able to ship goods from one nation to another without paying tariffs, which otherwise would cost them an extraordinary amount of money…

However, back in the early 1970s, the whole operation developed a kink. One man, a crook, a president, a liar, an insecure parody of a head of state, Richard Nixon, went off script. He REALLY went off script.

In an effort to bolster US companies and protect them from foreign competition inside the United States, Nixon began erecting tariffs on a range of goods imported into the US.

If this Nixon economic plan spread to other countries, the entire global program to install “free trade” and mega-corporate emperors on their thrones for a thousand years could crash and burn….

Something had to be done. The president had to go. This was the real motivation behind Watergate. This was the real op. Yes, there were sub-motives and smaller contexts, as in any major op, but the prime mover was: get Free Trade back on track: get suitable revenge on the puppet in the White House who went off the script.”

http://www.alt-market.com/articles/2020-nixon-rockefeller-ig-farben-and-global-control

See the similarities? I do. Slip slidin’…

Davy on Fri, 26th Oct 2018 4:28 am

“At present, renewable energy meets a modest but growing proportion of electricity supply in developed countries. The supply is small enough that legacy fossil fuels plants often with long amortized capital costs can serve as back-up with only a modest increase in total costs. As these plants gradually retire and renewable energy meets a greater proportion of power supply, expect a step change in the cost structure of renewable electricity. This will occur as you need to build dedicated back-up plants and storage infrastructure.”
Great point Antius and why a 100% renewable world has such a steep slope to negotiate. The worst is ahead and fake greens act like they are already there.

“Ironically, as we enter depression triggered in part by increasing cost of energy; oil prices may decline for some time, along with the price of all other commodities. EVs may find themselves competing against cheaper gasoline, just as their own costs start to rise and their customer base shrinks.”
Right Antius, I have been preaching peak demand based on economic decline for a long time now. This includes pressure on the expensive renewable build out. Renewables will get hit with a double whammy of cheaper legacy fossil fuel power and fuel supply. The build out cost of renewables, storage, and EV’s will be prohibitive in a time of much lower economic activity. This economic decline also will likely be manifested as both peak oil and peak oil demand. This could be a vicious circle of decline for both. Expensive oil will not be developed and global demand will drop from lower activity. This is just a forecast based upon the trend of aggregate decline that is being manifested across the board. Pinpointing the time frame is difficult because our economic system is in uncharted waters of Ponzi central bank management activities. Yes we still have plenty of growth to disguise this decline and the decline has not become dominant as an expression of the mainstream. They can and do deny decline. Currently declining variables are discounted and dismissed by a cornucopian optimistic narrative across the board. Realist like me are in the minority. Even bearish elements in the financial community preach a world that will adjust overtime after a correction. I believe this decline is more like systematic thresholds that are being extended and a bifurcation is in the works. This is human and planetary and the reason it is so profoundly dangerous.

Davy on Fri, 26th Oct 2018 5:04 am

“China Tells State-Owned Giants to Halt Iran Oil Buying”
https://tinyurl.com/yas4n8rn

“China’s government has told at least two of its state oil companies to avoid purchasing Iranian oil as the U.S. prepares to impose sanctions on the Persian Gulf state, according to people with knowledge of the matter. The freeze on imports by China National Petroleum Corp. and Sinopec is temporary and purchases may resume depending on the outcome of negotiations with the U.S.”

Davy on Fri, 26th Oct 2018 5:52 am

Looks like the U.S. ZOG might still get their NWO after all..A PBM alliance could be humanity’s only hope.

Davy on Fri, 26th Oct 2018 5:54 am

Fake Davy post

I AM THE MOB on Fri, 26th Oct 2018 6:31 am

The Scariest Video On Youtube (Yes this is a REAL classroom)

https://www.youtube.com/watch?v=OxMt0p_C0p0

Darrell Cloud on Fri, 26th Oct 2018 6:37 am

We will transition when we have no other choice. Till then the charade will continue. I have become convinced picking a time for that transition is a fool’s errand.

Cloggie on Fri, 26th Oct 2018 7:38 am

“China Tells State-Owned Giants to Halt Iran Oil Buying”

Empire dave keeps his hopes high that his beloved ZOG will manage to ram Iran back into his empire, after it dared to escape under Khomeiny.

The failures that were Iraq, Syria and Afghanistan should have wisened him up.

It didn’t

/rolleyes

Davy on Fri, 26th Oct 2018 7:46 am

Shut up nederliar. I posted news and it was without comment of right or wrong. You are such an extremist fool who can’t stand anything that messes with your carefully crafted message. I wouldn’t put it past your Nazi credentials as being another one taking hits on me. I know you played the puppeteer with your SUM creation. What a dumbass acting like an Iranian. You have gone downhill since you have turned rabidly political. FRAUD

Antius on Fri, 26th Oct 2018 8:02 am

Peak oil supply and peak oil demand are two sides of the same coin.

Supply is limited by what consumers can afford to buy at a certain energy intensity level. Demand is limited by exactly the same thing. You cannot demand what you cannot afford and no-one will sell you anything for less than it cost to produce, not for long anyway.

It’s why we don’t make oil by heating limestone to release CO2 and reacting it with electrolytic hydrogen. Theoretically, this could produce endless amounts of oil. But it is an energy sink rather than an energy source and would not be affordable to consumers.

Affordable price is actually a hard limit set by the energy intensity of our economies. The systems that we have demand that we expend a certain amount of energy to produce a certain amount of GDP. This puts a finite limit on how much we can afford to pay for an energy source that we intend to use to generate wealth.

Debt muddies the whole equation by putting an inherent time lag into the system; allowing the unsustainable to continue for a while by burning borrowed wealth from the future and lulling people into thinking that fundamentals no longer matter.

Too few people understand the difference between a resource and a reserve. A resource is something that you might use at some point, the estimated extent of which is unconstrained by costs and practicality. A reserve is something that you know you can use at a price that you know you can afford. Techno optimists point to resources and pretend that they are reserves.

Anontarded1 on Fri, 26th Oct 2018 8:27 am

neder please listen to supertard. i’m a tard and a former paultard and i was extremely political, i still am. most of these types are of no use to me, they’re useless, a version of old decripit millenials consuming massive of politcal material

i hate who i am. that’s why i do basic tard research to balance things out a little. plus i also invent IRL machines to make my life interesting or one could say delude myself that way

Anontarded1 on Fri, 26th Oct 2018 8:31 am

i make strong delineation between hot air and actual stuff. i avoid the abstract stuff not that we don’t need it. musics is abstract and women are big into it. it’s not that it’s bad or not useful. i’m not against women. i don’t score but i don’t hate them or blame them. i don’t get so anygry that i want “white sharia” to put them in their place.

nedertard please…your blog and your vision of white supremacy only result in annihilation of the white race and ^mm^ breeding your daughters not tah you have any. then you complain about “muh dresden”.

anyways if you don’t raise cow and work on a 1000 acre farm, i view you as less than supertad

Davy on Fri, 26th Oct 2018 8:32 am

“Debt muddies the whole equation by putting an inherent time lag into the system; allowing the unsustainable to continue for a while by burning borrowed wealth from the future and lulling people into thinking that fundamentals no longer matter.”

The concept of debt is a complex issue that most people individualize then generalize. The reality of debt at the macro level is not the same as for an individual. It is more of a case of imbalances and malinvestment on the macro level. On the individual level it is more the case of spending money one may or may not have. This can be looked at as two sides of the ledger sheet with the individual as the debtor and a creditor on the other side. This is not the case on the macro side. Liabilities are assets but the value of the assets and liabilities is quite subjective hence the importance of price discovery in the environment of proper accounting standards supported by the rule of law. In this case macro debt represents what is indicated it represent within a proper framework of checks and balances. Assets and liabilities have integrity. This is never perfect and never has been. Today the system is plagued by bubbles and misrepresentations. Complexity of financial vehicles has allowed a great deal of corruption of real value. Central banks have charted a course that has remade traditional checks and balances to reflect their adapted behavior. Economic mismanagement is now institutionalized in the system through repression and easing. This has allowed the bending of standards and laws. Price discovery is now flawed by imbalances and repression. This makes relating debt to energy misleading. It is more the case of malinvestment than of affordability at the macro level. Affordability is different for economics and physics but they also overlap. Our problem today is with specialist enforcing their language on the other which distorts the real meaning of debt in a particular setting. Engineers, scientist, and economist don’t always talk the same language or think at the same level. The average individual is even worse with the concept of debt.

Mister French on Fri, 26th Oct 2018 9:17 am

No…nobody missed you so Go Fck Off Speedo

Anontarded1 on Fri, 26th Oct 2018 9:26 am

thank you for the educaton in finance sueprtad it’s good to learn something

Anontarded1 on Fri, 26th Oct 2018 9:33 am

i thought the financial industry is highly regulated. they’re governed by very strict laws such as anti money laundering measures and bundling. And congress have a committee on banking/financial regualtion i think. elizabeth warren even campaigned on the issue of finance reform. i guess the law is too slow to catch up with the industry

Antius on Fri, 26th Oct 2018 10:11 am

One rule for us, another for the goyum?

https://www.theguardian.com/business/2018/oct/26/no-10-refuses-back-calls-philip-green-stripped-knighthood

What was this man knighted for anyway? Since when does ‘being rich’ entitle someone to a knighthood? I fully understand why many decent people have refused this honour, if indeed we choose to call it such.

I AM THE MOB on Fri, 26th Oct 2018 10:21 am

Man arrested in connection to pipe bombs sent to prominent Democrats

https://globalnews.ca/news/4598820/pipe-bomb-arrest/?utm_source=notification/

Watching CNN the bomb suspect has a van full of stickers all over..Looks like a typical right wing tin foil hat nut job..

This is where paranoid delusional thinking like CLogg and Davy takes you.

I AM THE MOB on Fri, 26th Oct 2018 10:24 am

Looks like those black helicopters really did come after this guy..He created his own self fulling prophecy..

I AM THE MOB on Fri, 26th Oct 2018 10:34 am

Van of bomber

https://imgur.com/a/g8uFSC9

What a fucking paranoid nut job

Typical right wing lunatic

Anontarded1 on Fri, 26th Oct 2018 10:56 am

^mm^ thanks for the breaking news. it’s important to highly white wing sic extermism

Chrome Mags on Fri, 26th Oct 2018 10:57 am

“China Tells State-Owned Giants to Halt Iran Oil Buying”

That’s going to be a blow to Iran, and harbinger of higher oil prices to come.

Anontarded1 on Fri, 26th Oct 2018 11:05 am

as a tard and a former paultard i’m no stranger to hearing “civil war 2” that mak is hoping for. if this is what it is it will get supertards juice flowing. america is full of supertards and they’re in law enforcement as well. i watched how supertards tracking isis from farway places. domestically it’s not a problem.

I AM THE MOB on Fri, 26th Oct 2018 11:11 am

MAGA bomber van close up!

https://i.imgur.com/9kZplxg.jpg

What a fucking nut job! Makes clogg look like a rational person.

Anontarded1 on Fri, 26th Oct 2018 11:54 am

ok this is not white, a conservative darkie but he’s considered himself white

I AM THE MOB on Fri, 26th Oct 2018 12:07 pm

Cesar Sayoc, Jr. age 56. 18151 NE 31st Ct. Apt 2016 Aventura, FL 33160 ..Born in Brooklyn..Philippine origin

He has a ton of shoplifting, traffic, and drug charges..

Anontarded1 on Fri, 26th Oct 2018 12:16 pm

oh ok ^mm^ so this dirt bag attempts to pass himself as clean conservative by being part of the movemnet because either party have no admission policy. i get it.
when i was paultarding hard i saw tons of criminal behavior and i almost got lead poisoning a couple of time so i called it quit. plus i always had luke 22:36 around incase they want to start a cult on me. always watch out for cults. don’t be a victim of it especailly if you’re old. old [eople are often victims of crimials