I love these old reminiscing threads. Back in 2011 I reminisced:
But in '04 my WAG was actual, physical peak between '12 & '15 with the plateau undulating from then till inexorable physical decline maybe in 2020 or maybe '25? So I'm still surprised to know we were already on the top in 2004!
So to review, conventional
has been flat since '04—you know what "conventional" is, the 90% of production that enables all the rest? LTO gave us a surprise 10 years of happy motoring and renewables development. But it also gave the US time to (caused us to?) triple debt/GDP: from about 30% to over 100% (60 to 120% globally), gave the top 20% more time for trickle-up, they now own more wealth than the bottom 50% (the top 20% the only group to have gained since the recession) which (I think) has led to a derailing of politics into a universe of alternative facts, manufactured outrage, tribalism, and the point of it all: tax cuts.
So just that short synopsis would seem to be everything a peaker from '04 (this one anyway) would expect—save LTO. If the plateau in conventional (remember the 90% of production) were a typical delayed reaction to increased demand and too little investment in the '90s, we would have seen conventional increase maybe 6 or 7 years after, so maybe 2010 at the latest. Didn't happen. Instead we abandoned the search for the next big gusher and the went straight to the dregs, tar, LTO, offshore, etc.
So tick the boxes of doom with me:
__ peak conventional
__ peak growth (ALL growth has been from new debt since '08 —see the chart)
__ peak democracy (over 50% believe it overrated)
__ facebook
Resilience is the ability of a society to weather setbacks and disasters. Borrowing money is one way to pay for repairs, but you can't borrow money to give to rich people when things are good and also borrow to repair the damage when things are bad and then borrow more to fix the things you should have fixed 20 years ago and already paid off.
I have no guess if and when the bubble pops. If renewables can surge we have a chance. But if we dilly-dalley around waiting on fracking and demand destruction until conventional begins to decline we may bite the dust. I'll just stick with my original thought that oil production declines begins this decade. Not fracking necessarily, I don't know if it will ever make up the losses from last year or not, but regardless, it is conventional production that costs $10-$20/bbl that underpins the whole mess. It didn't respond to 5 years of the highest prices ever 10 years ago so it doesn't seem likely to now.
This was always one of my favorite charts and it is evergreen. The difference between peak in 2016 and 2023 is 500GB — 500 thousand million barrels! And that is with a nice smooth curve, no overshoot pulling "tomorrow's" oil forward. Of course you can get any guess you want as far as URR goes, but again, it is the rate that counts and conventional extraction rate has proven that it
can not grow much if at all.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)