The peak in world oil production is yet to come
World oil production stagnated between 2005 and 2007, which given rapid growth in demand from emerging economies sent oil prices shooting up. Some observers suggested that production might never rise much above the levels seen in 2005. Among those who raised this possibility, two of the more thoughtful have changed their mind. Euan Mearns last month summarized what he saw as three (or four) nails in the coffin of peak oil. And Stuart Staniford, an early editor and contributor for the Oil Drum, declared a few weeks ago that the data have spoken.
The new higher oil / energy prices are here to stay but I believe they will stay range-bound in $100 to $150 / bbl bracket, perhaps for decades as we munch our way through the $125±25 slab of resource.
As I write, Libya, Tunisia, Egypt, Syria, Lebanon, Iraq, and Iran are all subject to varying degrees of economic and political turmoil.... I assume at some point a large oil producer will descend into turmoil and then there will be a large price spike, and that may kick the global oil market out of the current meta-stable state.
Jeffrey's first comment to this article:
If the EIA projections above are correct, none of this is going to change the fact that U.S. production peaked 40 years ago. Instead, tight oil will give a dramatic but temporary bump back up in a longer trajectory of decline, similar to that provided by new production from Alaska in the mid 1980s.One of the little ironies of many “Peak Oil is Dead” is dead stories is that the authors are usually using what is so far a (crude oil) post-peak region, the US, to claim that “Peak Oil is Dead.” As you noted, I think that post-1970 US crude oil production is best characterized as showing an “Undulating Decline.”
Regarding global production, the long term (1930 to 2005) and 2002 to 2005 rates of increase in global Crude + Condensate (C+C)) production were about the same, on the order of about 3%/year. "Gap" Charts for Global C+C and for Global Net Exports (total petroleum liquids + other liquids) follow, showing the gaps between where we would have been at the 2002 to 2005 rates of increase versus actual post-2005 data, by year. Of course, annual Brent crude oil prices approximately doubled from $25 in 2002 to $55 in 2005, and then doubled again, from $55 in 2005 to $112 in 2012 (with one year over year annual decline, in 2009).
C+C Gap Chart:
GNE Gap Chart:
Note that I estimate that we have already burned through about one-fifth of post-2005 Global CNE (Cumulative Net Exports). A similar extrapolation for the Six Country Case History* produced a post-1995 CNE estimate that was too optimistic.
*Six major net exporters, excluding China, that hit or approached zero net exports from 1980 to 2010.
Following is a link to my Export Capacity Index (ECI) article and excerpt from same:
We know what the six year ECI decline meant for the Six Country Case History, and we know that we are seeing similar ECI type declines for Saudi Arabia, Global Net Exports and Available Net Exports.The key question is why would the outcome for global net exports be materially different from the Six Country outcome?
My basic premise is that the net oil importing OECD countries are maintaining something resembling “Business As Usual” only because of huge and almost totally overlooked rates of depletion in post-2005 Global and Available Cumulative Net Exports of oil.
And a Six Country example of production versus CNE depletion:
(Post-1992 production as a percentage of 1992 production, versus remaining post-1992 CNE, by year)
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