Revisiting International Energy Outlook 2001
In late 2001 Roger Blanchard published a critique of the EIA's publication "International Energy Outlook 2001". Roger thought they would miss their mark. Four years later I thought I would check some of their predictions and see how they were doing.
The EIA publication in question:
1. North Sea — Concerning the North Sea the IEO2001 states: "In the IEO2001 forecast, North Sea production reaches a peak in 2006, at almost 6.6 million barrels/day (mb.d). Production from Norway, Western Europe's largest producer, is expected to peak at about 3.7 mb/d in 2004 and then gradually decline to about 3.1 mb/d by the end of the forecast period with the maturing of some of its large and older fields. The United Kingdom is expected to produce about 3.1 mb/d by the middle of this decade, followed by a decline to 2.7 mb/d by 2020."
The facts are that the North Sea was already post peak when these words were written. The North sea peaked in 1999 at 5.947 mb/d. For the first nine months of 2005 the North Sea has averaged 4.787 mb/d, 1.16 mb/d below the average for all of 1999, the peak year. And that is over 1.8 mb/d below what they expected the production to be next year. It is almost a lead pipe cinch that by then the North sea will be producing at least 2 mb/d below their predicted 6.6 mb/d, and declining fast.
They say Norway will peak at 3.7 mb/d in 2004 year and decline to about 3.1 mb/d by the end of the forecasting period, (2020). That is an absurdly slow decline over 16 years. The facts show how very wrong they were. Norway had already peaked in 2000 averaging 3.197 mb/d for that year. So far in 2005 they are averaging 2.719 mb/d, well below the 3.1 mb/d the EIA predicted they would be at in 2020. In fact they are now declining by about 3.3 percent per year, a rate that would put them at about 1.6 mb/d in 2020.
They say: "The United Kingdom is expected to produce about 3.1 mb/d by the middle of this decade, followed by a decline to 2.7 mb/d by 2020." The UK peaked in 1999 at 2.684 mb/d and now in the middle of this decade, their expected peak, the UK is producing an average of 1.668 mb/d over 1.4 mb/d or about 46 percent below where the EIA expected UK production to be.
2. Mexico — Concerning Mexico the IEO2001 states: "Mexico is expected to adopt energy policies that encourage the efficient development of its vast resource base. Expected production volumes in Mexico exceed 4 million barrels/day by the end of the decade and show little decline out to 2020."
Mexico is now post peak! According to the data supplied by the EIA, Mexico's highest production month was December 2003. That month Mexico produced 3.455 million barrels. The 12-month moving average of Mexican production peaked six months later in June 2004 at 3.408 mb/d and has been steadily declining ever since. That 12-month moving average now stands at 3.344 mb/d. And since Pemex themselves say Cantarell will begin a steep 14 percent decline in 2006 there is little hope of any increase in Mexican production in the future. Cantarell currently produces about 60 percent of Mexico's oil.
A note of interest: In 1997 Cantarell was producing about 1.1 mb/d. Since then its output has doubled to about 2.2 mb/d. Since then Mexican production has gone from 3.023 mb/d in 97 to 3.343 mb/d in 2005. So while the output from Cantarell was increasing by 1.1 mb/d the output from ALL Mexico was only up by .32 mb/d. In other words, while Cantarell was increasing output by 1.1 mb/d the rest of Mexico was declining by almost .8 mb/d. Mexican production outside Cantarell has already been in decline for about a decade and now Cantarell is about to join the rest of the country by hitting the skids as well. This makes the EIA's prediction that Mexico will show little decline out to 2020 absolutely laughable.
3. Argentina — Concerning Argentina the IEO2001 states: "Argentina is expected to increase its production volumes by at least 100,000 b/d over the next two years, and by the middle of the decade it could possibly become a million barrel/day producer"
Argentina peaked in 1998 at 847,000 b/d average for that year and so far in 2005 it has averaged 712,000 b/d. Argentina was already well into decline when the EIA made their prediction. That makes their prediction all the more weird.
What do you think? Leave a comment below.
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