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Robert Rapier: Peak Oil In Four Years?


Between 2010 and 2015, annual oil production in the U.S. grew by four million barrels per day (BPD). Production dipped in 2016, but then U.S. crude oil production again rose by 1.2 million BPD between January and December 2017, to levels that haven’t been seen since the early 1970s.

The surge in production is a result of growth in tight oil (more commonly known as shale oil). Many, including myself, never imagined that oil production could grow enough to threaten the U.S. oil production peak from 1970. But that looks inevitable at this point.

This production increase raises the question: Just how much will U.S. tight oil production increase before it peaks and begins to decline?  Another million BPD? Three million BPD?

The Energy Information Administration’s latest Annual Energy Outlook (with projections to 2050) attempts to answer this question, modeling several scenarios for future oil production.

The Reference case projection assumes that known technologies continue to improve along recent trend lines. The economic and demographic trends that were used reflect the current views of leading forecasters.

In the High Oil and Gas Resource and Technology case, lower costs and a higher resource availability than in the Reference case are assumed. In the Low Oil and Gas Resource and Technology case, the assumption is of lower resources and higher costs.

Here are the EIA’s projections:


U.S. oil production projections.

Every case assumes at least a few more years of tight oil supply growth. The Reference case shows shale/tight oil production growth of two to three million BPD over the next three years, before leveling off and remaining at approximately that level until 2050.

The Low Oil Resource case projects tight oil growth of another million barrels per day through about 2022, and then a steady production decline until 2050.

The High Oil Resource case projects sharply higher tight oil growth until about 2025, and then slower growth until 2050. Total production growth, in this case, was almost nine million barrels per day — implying a near doubling of tight oil production between now and 2050.

Supply Risks

But there’s one item that barely gets a mention in the EIA’s Annual Energy Outlook. It is something I witnessed firsthand when I was recently in the Permian Basin. Oil production can expand only as quickly as infrastructure can keep up. And it is struggling to keep up.

It’s not just crude oil pipelines that are an issue. Along with oil comes associated natural gas. In some cases, producers have no outlet for this gas, so they flare it. But there are various legal limits to flaring. This week, I heard about a producer who is having to reduce production because they are bumping up against their permitted limits for flaring.

In addition to potential infrastructure constraints, higher oil prices also lead to greater demand for oilfield services providers. That leads to higher costs for the oil producers and higher profits for drilling and fracking services providers.

At present, one of the bottlenecks in the Permian Basin is with the fracking service providers, and that is leading to a growing backlog of drilled-but-uncompleted wells (DUCs). This is helping to constrain production in the Permian Basin but was not a risk identified in the EIA’s production projections.


The latest Annual Energy Outlook from the EIA models the future potential of tight oil production under several scenarios. Some scenarios project tight oil production growth for another three to four years, but these scenarios apparently don’t consider supply risks posed by insufficient infrastructure, oilfield services or manpower. These factors could slow tight oil growth over the next few years, and could potentially shift the timing of peak tight oil.

Robert Rapier has over 20 years of experience in the energy industry as an engineer and an investor. Follow him on Twitter @rrapier or at Investing Daily.


45 Comments on "Robert Rapier: Peak Oil In Four Years?"

  1. rockman on Wed, 21st Feb 2018 12:14 pm 

    It always amuses me to see projections of future oil production rates many years into the future. Such as those projected here for 32 years to 2050. There are a variety of factors that will determine such rates but none with as much impact as the price of oil.

    BTW during the last 40 years in the oil patch the Rockman has not seen one person able to CONSISTANLY predict future oil price. Yes: occasional lucky guessers but who also have a track record of very incorrect guesses.
    Show me someone who has CONSISTANTLY predicted the price of oil 10 years (let alone 3 decades) into the future and MAYBE they could develop a bit of credibility in predicting future oil production rates. But even then they’ll still have to correctly take into account geologic constraints as well as tech advances.

  2. Anonymouse1 on Wed, 21st Feb 2018 1:32 pm 

    Only narcissists like you refer to themselves the third person, ‘narrativeman’

  3. MASTERMIND on Wed, 21st Feb 2018 1:33 pm 

    Shale is a farce..It doesn’t really matter what it does or doesn’t produce. What matters is the other 90 percent of supplies that are declining..And once their decline takes overs shale’s increase we are at peak oil global.

    Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude

  4. rockman on Wed, 21st Feb 2018 4:52 pm 

    “Only narcissists like you refer to themselves the third person”. The Rockman is a narcissist? The Rockman resents that claim: the Rockman has never sold or used narcotics. The Rockman also rejects the idea that there’s anything wrong with referring to the Rockman in the third person. And that’s all the Rockman has to say about that. And you can quote the Rockman on that.

  5. MASTERMIND on Wed, 21st Feb 2018 5:20 pm 


    Shouldn’t you be citing your favorite source the “Daily Caller”…LOL

  6. Hawkcreek on Wed, 21st Feb 2018 9:49 pm 

    The Hawk agrees with the Rock.
    Some people are in desperate need of a life.

  7. Boat on Wed, 21st Feb 2018 10:03 pm 

    Conventional oil in the US has become so insignificant in volume the name has been changed to other. Camel pee has won the day.

  8. Anonymous on Wed, 21st Feb 2018 10:09 pm 

    At this point in time we have last datum (NOV17) at already over 10 MM bpd. If you check the scenarios this is faster than the high growth (price and resource) scenario. I would not be surprised if infastructure holds back some development. Also price will likely not be as high as the growth scenario assumes. Still, I would expect something ABOVE the reference case.

    We could be well into the 11+s by end of this year which would be close to the reference case peak. After that limitations may slow down growth some, but would still expect some growth, not a plateau.

    This is assuming strip price for oil.

  9. Davy on Thu, 22nd Feb 2018 2:41 am 

    Weasel, you have any reply to that news Nony just presented? Maybe you will claim it is because we stole Canadian oil or something goofy and intellectually lame. Billy 3rd world will come back with it isn’t true. It is a lie because all these reports are lies unless they are negative and anti-American. LOL. DORKS

  10. Kat C on Thu, 22nd Feb 2018 4:00 am 

    Matt Simmons before his untimely death talked about oil infrastructure
    And rust
    The fact is that all our infrastructure is aging. The Oroville Dam that took hits last year was built in 1968. It is estimated that 2,000 dams in the US are in need of repair. The grid is in need of an overhaul etc etc. Remember we built all this stuff when it only took 1 barrels of oil to extract 100. We were riding high then, capable of building whatever we wanted. Can we fix or rebuild all this and keep our affluent lifestyle going. No. So we keep our affluent lifestyle going and pray…..

  11. deadlykillerbeaz on Thu, 22nd Feb 2018 5:42 am

    Nobody ever gets it right, but they do a good job of trying.

    They have to receive credit for trying.

    If the demand doesn’t go away and the supply begins to decrease, there will be an increase in the price of oil. IOW, Peak Oil.

    Supply and Demand

  12. fmr-paultard on Thu, 22nd Feb 2018 6:47 am 

    I don’t understand supertard stinging attack on fake fmr paultard. I’m the hyphenated fmr-paultard.
    I don’t understand othertards either. They say “we” are doomed but surely they must mean liberal democracy. I can’t believe they are Dostoevsky drones wanting no burden of liberal democracy and only feed. Yep feeding like animals

  13. fmr-paultard on Thu, 22nd Feb 2018 6:53 am 

    If these tards worry a lot about survival they can just convert to Islam. People are confused. I’m confused. The Islamic nations are impoverished but the men are well fed and grow to proper height. This is because they eat the allowances for children and women. They also observe some hygiene routines but that’s a moot point. It’s moot like vaccines; If kids are dirty and malnourished then vaccines kill them faster

  14. Anonymous on Thu, 22nd Feb 2018 8:40 am 

    That TOD thread is interesting. Boy were they wrong about ND peak value. It has peaked over 1.2MM bpd. Rune said 0.6-0.7 MM bpd.

  15. rockman on Thu, 22nd Feb 2018 11:04 am 

    A – Those predictors still suffer from the same problem…and always will. They must be able to CONSISTANTLY correctly predict future oil price. And even if they were able to do the impossible they would also have to be very well versed in geology, reservoir engineering and up to speed on developing technology. Abilities the vast majority lack.

  16. Antius on Thu, 22nd Feb 2018 12:19 pm 

    It is very difficult to predict what will happen to US oil production even in the next few years.

    As Rockman has stated on numerous occasions, the price of oil is set by what refiners are able to sell their products for. It is not a function of scarcity or the costs of producers. Oil prices are therefore constrained by what the economy can afford to pay, which is now beneath cost for most producers. This is the vicious pincer movement that is crushing the oil industry. Whilst the economy is growing on paper, wealth distribution is increasingly unequal, with real wages for the lower 50% actually declining over the past decade. The wealthy use less oil per $ of earnings and can afford to pay more. But it is the vast bulk of the middle and working classes that account for the majority of demand through their demand for products and transportation. Their earnings are being squeezed as we edge closer to the net energy cliff. This makes western economies increasingly unstable.

    If the global economy experiences a stock market crash, a banking crisis and a rerun of 2008 (it is on the cards) then oil prices could drop to $30/barrel. At the same time, interest rates and bond rates may need to rise as credit ratings deteriorate. That would kill off any growth in US tight oil production if it doesn’t finish the industry for good.

  17. GregT on Thu, 22nd Feb 2018 12:31 pm 

    “At the same time, interest rates and bond rates may need to rise as credit ratings deteriorate. That would kill off any growth in US tight oil production if it doesn’t finish the industry for good.”

    That would also be the coup de grace for what was once termed ‘The Middle Class’.

  18. Sunspot on Thu, 22nd Feb 2018 12:50 pm 

    I always find it fascinating when there is a big oil discussion with not even the barest mention that oil is what will cause the extinction of the human race via Global Warming. So I thought I’d mention it. You can all get back to your pissing contest about the price of crude now…

  19. Anonymous on Thu, 22nd Feb 2018 1:00 pm 


    I agree predicting price is both impossible and necessary to making production estimates! (Although you can make contingent forecasts–like “if prices are ~A, we get production ~B). Also agreed that even with contingent forecasts, production forecasts can be off because predicting activity is hard (what the activity will be and what new wells will be like). Unless you are predicting production of an area with no drilling in it!

    But the Rune Bakken under-predictions did not come because of an adverse price move to his case (i.e. upward move). Prices were stable 2012 to 2014 (when he was proved dramatically wrong). And since then we have seen Bakken tends to maintain (at production levels almost double his peak call) even with prices a little over half of what they were in 2012.

    So Rune can’t even claim prices done him wrong! He was just wrong regardless.

    And you have to recall that Rune’s article was held up as one of the best on TOD. And it was way off. The reason is that even as uncertain as reservoir estimation is (for professionals), TOD had miserable analysts. With overinflated opinions of themselves. And with a trusting, non-questioning, non-analytical commentariat.

  20. MASTERMIND on Thu, 22nd Feb 2018 1:06 pm 

    Remember when our president had balls?

    This is how you treat a Nationalist!

  21. Davy on Thu, 22nd Feb 2018 1:29 pm 

    Greg leave the discussion of economics to someone else you are clueless to the bigger picture. Obsessively attacking Americans and enabling wack jobs who pollute the board does not promote good discussions on economics. What it promotes is unbalanced binary extremist agendas. Leave it alone already.

  22. MASTERMIND on Thu, 22nd Feb 2018 1:30 pm 

    Nazi trying to spread his “wisdom”. Gets punched in the face. Of course he cries like a coward.

  23. Davy on Thu, 22nd Feb 2018 1:33 pm 

    Sunspot, people are causing extinction not oil. You have the horse in front of the cart. You are part of it unless you live a semi-nomadic existence in the Amazon or something. Piss on that already.

  24. Sunspot on Thu, 22nd Feb 2018 1:46 pm 

    It’s actually people using oil that is causing the problem. I should think that would be pretty obvious. Although I do agree – if there were no people on the planet, human extinction wouldn’t be a problem…

  25. Davy on Thu, 22nd Feb 2018 2:03 pm 

    Sunspot, what’s people’s alternative anymore? Surely you don’t think fake green renewables will make that much difference or have you been brainwashed?

  26. Bob Dole on Thu, 22nd Feb 2018 2:34 pm 

    Bob Dole thinks that the long-term price of oil will be lower than $100 (in 2017 dollars) because alternatives are cheaper than that.

    Bob Dole thinks peak oil will turn out to be a fairly minor event. Bob Dole thinks the economy will transition smoothly to alternatives.

    – Bob Dole

  27. Cloggie on Thu, 22nd Feb 2018 3:18 pm 

    Now here is a real collapse:

    Venezuelans lost on average 11 kg over the last year.

  28. Cloggie on Thu, 22nd Feb 2018 3:20 pm 

    “Bob Dole thinks peak oil will turn out to be a fairly minor event. Bob Dole thinks the economy will transition smoothly to alternatives.”


  29. GregT on Thu, 22nd Feb 2018 3:32 pm 

    “Greg leave the discussion of economics to someone else you are clueless to the bigger picture.”

    Economics is a failed ideology Davy, and the bigger picture is that if humanity can’t get these assholes under control, our species faces extinction. For the brain dead people such as yourself, that would include your ‘offspring’.

  30. MASTERMIND on Thu, 22nd Feb 2018 4:12 pm 

    Bob Dole

    UC Davis Peer Reviewed Study: It Will Take 131 Years to Replace Oil with Alternatives (Malyshkina, 2010)

    University of Chicago Peer Reviewed Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)

    Solar and Wind produced less than one percent of total world energy in 2016 – IEA WEO 2017

    Fossil Fuel Share of Global Energy since 1990 – BP 2017

    IEA Sees No Peak Oil Demand ‘Any Time Soon’

    OPEC sees no peak oil demand from EVs before 2040

  31. MASTERMIND on Thu, 22nd Feb 2018 4:13 pm 

    Dear Reader,

    Here are five peer reviewed scientific studies authored by top experts that prove beyond any reasonable doubt that global civilization will collapse within the next decade.

    Simple really….when the World Economy Collapses everything shuts down…the end… We’re talking about grids down all over the world and 7.5B people dropping like f*** flies in short order. The collapse will be absolutely horrible..There is no collapse or horror movie ever produced that has even come close to imagining what the collapse of BAU might look like. I’m talking about every corporation and every social program going bankrupt at once. I’m talking about people eating people. I’m talking about the Worst Catastrophe to ever happen in the history of mankind. Nothing has ever, or will ever come close….

  32. MASTERMIND on Thu, 22nd Feb 2018 4:14 pm 

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….

  33. MASTERMIND on Thu, 22nd Feb 2018 4:15 pm 

    The End of the Oil Age is Imminent!

    Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.

    What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.

    Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.

    Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.

    Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.

  34. GregT on Thu, 22nd Feb 2018 4:16 pm 

    None of those reports support your conclusions MM.

  35. Cloggie on Thu, 22nd Feb 2018 4:27 pm 

    Millimind needs peak oil like flies need cow shit. He hopes for a breakdown of society so he can go on a rape campaign, to begin with Taylor Swift, as he repeatedly announced he aspired.


  36. MASTERMIND on Thu, 22nd Feb 2018 4:34 pm 

    Top Economist: America: the future looks broke

    Nobel Prize-winning Economist Robert Shiller, The stock market today is similar to the market in 1928

    ‘WORSE THAN 2007’: Top Central Banker warns of looming wave of worldwide bankruptcies

    ‘Perfect storm’: Global financial system showing danger signs, says senior OECD economist

    Our Broken Economy, in One Simple Chart

    Financial markets at risk from bubble, IMF warns

    Global economy set for decade of gloom as World Bank predicts recovery will fizzle out

    Global Debt Hits Record $233 Trillion

  37. MASTERMIND on Thu, 22nd Feb 2018 4:39 pm 


    The last thing I want this entire world to happen is peak oil. But what I want and what is going to happen are two different things. Good job on assuming what I want clog and getting it all wrong.

  38. MASTERMIND on Thu, 22nd Feb 2018 4:40 pm 

    World Scientists “Warning to Humanity” Signed by 15,000 Scientists from 184 Countries Including the Majority of all Nobel Prize Winners

    Scientific American: Apocalypse Soon: Has Civilization Passed the Environmental Point of No Return?

    Peer Reviewed Study: Society Could Collapse In A Decade, Predicts Historian (Turchin, 2010)

    NASA Peer Reviewed Study: Industrial Civilization is Headed for Irreversible Collapse (Motesharrei, 2014)

    The Royal Society: Peer Reviewed Study, Now for the First Time A Global Collapse Appears Likely (Ehrlich, 2013)

    Peer Reviewed Study: Limits to Growth was Right. Research Shows We’re Nearing Global Collapse (Turner, 2014)

    Peer Reviewed Study: Financial System Supply-Chain Cross-Contagion: Global Systemic Collapse (Korowicz, 2012)

    Society is only 9 meals away from Anarchy!

  39. Davy on Thu, 22nd Feb 2018 5:05 pm 

    Greggie, economics is a tool not an ideology. Those who make it into an ideology are a failure like you and your ideology of hate.

  40. GregT on Thu, 22nd Feb 2018 5:26 pm 

    A shovel is a tool Davy. Economics is a failed ideology, which ignores basic physics, mathematics, and biology.

  41. MASTERMIND on Thu, 22nd Feb 2018 5:33 pm 

    This is what happens when a Russian troll forgets to turn off their geo-location on Twitter: (look on the bottom)

  42. GregT on Thu, 22nd Feb 2018 5:35 pm 

    “you have any reply to that news Nony just presented? It is a lie because all these reports are lies unless they are negative and anti-American. LOL. DORKS”

    Nony is cheerleading an increase in fossil fuels production at a time when the scientific community has determined that the burning of fossil fuels is changing the chemical make up of the Earth’s atmosphere, which could very likely lead to the extinction of the human race.

    Considering the fact that America has not yet figured out a way to relocate 325 million people to another planet somewhere in the galaxy, Nony’s comment is not only negative, but also anti-American. Dumbass.

  43. Davy on Thu, 22nd Feb 2018 5:50 pm 

    A shovel is a hand tool and that is about your speed so stick with that.

  44. Davy on Thu, 22nd Feb 2018 5:56 pm 

    Greg, your confusing yourself are you drinking? You are mixing up discussions and issues. This happens when you are way too long on the computer. Take a break before you snap.

  45. GregT on Thu, 22nd Feb 2018 6:00 pm 

    That would be ‘you’re’ confusing yourself.


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