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How Realistic is EIA’s US Domestic Oil Supply and Demand Forecast?
Gail the Actuary [Gail Tverberg], The Oil Drum
I was invited to a blogger’s conference call on April 1, hosted by the American Petroleum Institute (API). We were told that each blogger would be allowed to ask one question of Peter Robertson, Vice Chairman of the Board of Directors of Chevron Corporation.
My question was, “How realistic is EIA’s Chart 5 scenario? If you look at Chart 5, it looks like there is no need to conserve.”
… EIA determines expected imports by subtracting its estimate of the amount of oil the US will produce from its estimate of future demand. This produces the 11.5 million barrels a day of oil imports it shows as expected for 2025. The EIA makes the assumption that someone, somewhere, will have oil available to export, when it is needed.
I never really got an answer regarding how realistic Mr. Robertson thought this scenario was. Clearly he thought the forecast for US oil production was a stretch, and import costs would be high.
…Whether or not Mr. Robertson and Chevron believe in peak oil, I think Mr. Robertson approaches are reasonable ones. I don’t think that anyone would disagree with energy efficiency. It is hard to see how alternative fuels will scale up in a short time frame, and nearly everyone can agree that having a having too many fuel types is a problem.
I personally think that drilling at home is a far better solution than pointing fingers at someone overseas, and accusing them of not pumping as much oil as they are able to. I think blaming the National Oil Companies is all too easy a solution, and I am glad Chevron did not take this route.
(6 April 2008)
The U.S. Oil Supply – A Look At Our Future Oil Needs
Byron W. King, Energy and Oil
Let’s discuss the U.S. oil supply going forward. The U.S. presently consumes about 21 million barrels of oil per day. This is a mix of domestic output (much coming in small quantities from several hundred thousand old stripper wells) and imports.
According to the most recent figures from the U.S. DOE, in January 2008, U.S. crude oil output was just over 5 million barrels per day, plus additional natural gas liquids. The balance of oil consumption comes from imports. (Also, the U.S. supply of transportation fuel is supplemented about 3-4% with ethanol that comes from distilling about half the U.S. corn crop. That is why your grocery bill is skyrocketing.)
But domestic volumes of oil output are depleting and declining inexorably. From the North Slope of Alaska to the deep water of the Gulf of Mexico, U.S. output is just plain falling. There is very little good news, and even the good news is oft-times not so good.
New discoveries and new wells just cannot keep up with depletion of older oil fields. By 2025, U.S. daily oil output will be a fraction of its current level (probably down to about 2-3 million barrels per day), even with an aggressive program of drilling offshore and in Alaska – which is not happening, in any case.
Also by 2025, U.S. imports will almost certainly decline. The oil will not be available to buy and import from world markets. Not everyone agrees with this. In one fanciful projection from 2005, the U.S. DOE forecast that “Total U.S. gross petroleum imports are projected to increase in the reference case from 12.3 million barrels per day in 2003 to 20.2 million in 2025.” Maybe in somebody’s dreams, but my view is that this is one projection that will never come true.
Really, by 2025, the rest of the oil-producing world will simply lack the product to export. This will be due to reasons of depletion on a global scale, and fast-growing internal demand in oil-producing nations. Gasoline consumption in places as diverse as Russia, Iran, Venezuela and Saudi Arabia is just soaring, so there is less net oil available for export.
And oil output everywhere is flat or declining. (Just last month, Russia announced a plateau in oil output.) And closer to home, Mexico’s Cantarell field is simply crashing at an annual depletion rate of 8% or more.
So what will happen in 2025? Will the U.S. pump its own oil? No, it’s not there. Will the U.S. continue to import large volumes? No, it won’t be available. The bottom line is that conventional oil sources for the U.S. – domestic output and imports – are simply drying up.
(2 April 2008)
Also from Byron King at Energy and Oil: Less Oil From Mexico.
Reprinted by permission.
Peak oil and Transport Revolutions
Eve Savory, Canadian Broadcasting Corporation (CBC)
Authors of Transport Revolutions tell Eve Savory they foresee radical social and political changes as the world’s oil supply dwindles
If one accepts that climate change could be catastrophic for many ecosystems, including the multiple ones humans inhabit, what could possibly be considered more critical, more demanding of our full attention, right now?
The mother of all asteroids intersecting with our planet’s orbit? All-out nuclear war? Aliens?
Well, try “peak oil” (put simply, the point at which the rate of global oil production begins to decline).
Peak oil has “the imperative of urgency,” according to Richard Gilbert, an urban-issues consultant based in Toronto.
… Here is the authors’ prescription for a successful transport revolution:
Start by moderating demand. Tax oil. Stop the planning and construction of all future infrastructure intended for oil-based transport, i.e. airports and freeways.
And start planning – by 2010 – for a rapid shift to electric propulsion. Electrify the existing railways and roadways and shift freight and personal travel to rail, trolley and bus, to electric scooters and personal grid-connected vehicles (known as GCVs).
Ships would move by sail, reserving oil-powered engines for tricky maneuverings in port and in storm. Aviation would be confined to very large, fuel-efficient planes.
“Electricity is the perfect energy carrier for an uncertain future because it’s a carrier; it’s not a source of energy,” Perl said.
Hydro, tidal, geothermal, wind, ethanol and, yes, coal and nuclear all can feed into the grid during the transition, Perl and Gilbert write.
(3 April 2008)
I wonder how long the CBC has been sitting on this item. Yesterday they were nattering about a 7% rise in gas prices in Toronto, where the CBC brass all live. The very next day this…
How long can oil fuel our leisure?
John McCrone, The Press (New Zealand)
Open up the throttle on a top dragster and you are burning more fuel than a 747 jet. You hit the end of the track in about five seconds, but still, that is a lot of gas.
Kiwis love their motorsports. Whether it is with souped-up cars, off-road vehicles, jet-skis, fizz boats, airplanes or motocross bikes, there are a lot of people whose weekends are dependent on the joy of speed, the throb of an exhaust.
But how long can it last? And what about the price of petrol? When will petrolheads feel they can no longer afford to keep filling the tank?
Even oil companies are predicting price rises at the pump. Many observers think that peak oil – when oilfields have reached maximum production and supply can only shrink – has started to bite and we can never return to what has been a period of remarkably cheap fuel.
(6 April 2008)
Another sign that people into motorized sports are open to the idea of peak oil; they understand its importance and seem rather philosophical about it.