But this time, my message was this, " Peak Oil is here, watch for oil to hit 80.00 in the next few months and then head north from there."
Yesterday, oil hit $88.00 before settling just below there. And it's been in the eighties now for over a month. Another thing is also obvious. We are not at Peak Oil in the sense of a distinquishable peak. No, the world oil production for the last 11 quarters has been flat, hence the term Plateau Oil.
Here is part of a piece from the Oil Drum on the state of world oil production:
World total liquids production (Fig 1) remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in the middle of 2009. According to the IEA, the current peak production of 86.13 mbd occurred on July 2006 and only one year later, June 2007 total liquids production fell to an unexpectedly low 84.50 mbd. A good increase up to 85.10 mbd occurred for September 2007. As long as demand continues increasing then prices will also continue increasing.
Forecast world crude oil and lease condensate (C&C) production retains its 2005 peak (Fig 2). The forecast to 2100 shows declining C&C production, using a bottom up forecast to 2012 (Fig 3). The forecast to 2012 shows a 1%/yr decline rate to 2009, followed by a 4%/yr decline rate to 2012.
World oil discovery rates peaked in 1965 (Fig 4) and production has exceeded discovery for every year since the mid 1980s. Discoverable reserves in giant fields also peaked during the mid 1960s (Fig 5). The time lag between world peak discovery in 1965 and world peak production in 2005 of 40 years is similar to the time lag of 42 years for the USA Lower 48 (Fig 6).
World C&C year on year production changes to June 2007 and July 2007 (Figs 7,8) show significant declines for Mexico, North Sea and Saudi Arabia and significant increases for Russia, Azerbaijan and Angola. As Russia is likely to be on a production plateau and Saudi Arabia, Kuwait and the UAE have probably passed peak production, the world C&C production will continue to decline slowly.
Saudi Arabia retains its 2005 C&C peak (Fig 10), which is the same as the peak year for world C&C (Fig 2). Saudi Arabia C&C production has dropped to 8.6 mbd which is 1 mbd less than its peak in 2005. It is now almost a certainty that Saudi Arabia passed peak C&C production of 9.6 mbd in 2005 (Figs 9,10).
Kuwait retains its 2006 minor C&C peak (Fig 12). Kuwait C&C production has now dropped to 2.5 mbd which is less than its peak in 2006. There is a strong likelihood that Kuwait has passed its minor 2006 peak (Figs 11,12). Kuwait’s major peak was 3.3 mbd in 1972.
UAE retains its 2006 C&C peak (Fig 14). UAE C&C production has now dropped to 2.6 mbd which is just less than its peak in 2006. Once again, there is a strong likelihood that UAE passed its 2006 peak (Figs 13,14).
World natural gas plant liquids is forecast to increase due to new OPEC projects (Fig 15). World ethanol and XTL production is forecast to double by 2012 (Fig 16). World processing gains are forecast to decline slowly to 2012 (Fig 17). "
Starting today, the Association for the Study of Peak Oil (ASPO) will open its American conference in Houston. ASPO Houston will feature such well known figures as Houston Mayor Bill White (former U.S. Deputy Secretary of Energy), Mr. T. Boone Pickens (pioneer Texas oilman), Bob Hirsch (co-author of the groundbreaking Hirsch-Bezdek Report to DOE), Peter Tertzakian (author of "A Thousand Barrels a Second"), Matthew Simmons, (author of "Twilight in the Desert: The Coming Saudi Oil Shock"), Henry Groppe of Groppe, Long & Littell, U.S. Congressman Roscoe Bartlett (R-MD.-tentative), and Chris Skrebowski of London's Energy Institute plus many others, including my boss.
A couple of weeks ago, my long time friend and Friday night dinner pal told me that the price of oil was going to drop to under 50.00. Anything can happen of course, especially with a humongous depression, but I immediately bet him dinner that it wouldn't. (there were caveats of course).
He changed the subject.
Most Americans don't realize that the so called high price of oil is not so bad for our European friends and others around the globe. Remember, oil is sold only in dollars, and since the dollar has dropped in value in the last six years to roughly 55% of its value, an 80 dollar barrel of oil is still a 44 dollar barrel in Euros.
You can thank the war, and and those phantastic fiscally fanatic republicans who wage war and lower taxes for that.
As Plateau Oil continues, those who can't afford higher energy prices will simply buy less of it. Those nations and individuals on the margins will begin to suffer.
The suffering point for the rest of us comes soon enough.
Plateau Oil means production and demand is flat.
But Prices will climb up.
And $100.00 oil is just around the bend.
If it weren't for the huge profits the bad guys are taking,
it would be a good thing.
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