7 responses

  1. Steve in Hungary
    April 24, 2012

    A couple of interesting charts published. The first one shows flat since about 2003/4 with occasional upticks. The second one is even more revealing. Saudi production. In spite of the ongoing high price of oil where, just where on that chart is the twelve and a half million barrels a day that the Saudis have long bragged about? Nowhere that I see

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  2. Sam Powrie
    April 24, 2012

    Hi James, I reckon you are missing the point mate. ‘New discoveries’ are not the same as ‘new production’. We need to take care not to conflate the two. But more importantly, nearly all of the ‘new’ oil being discovered and possibly going into production will be unconventional oil. We have little experience of the EROI issues with such resources. Who knows how this will pan out. Modeling suggests that if EROI gets below around 8:1 or 6:1 (I’ve seen both ratios quoted) then any such new production will be pointless because it will not add benefit to our economies! I understand that the initial longer term modeling of shale oil (for instance) is already suggesting the EROI is way below 8:1. In my own thinking, unconventional oil is just part of the overall peak oil scenario. The only oil production that really matters is of global conventional oil and that very clearly ‘rolled over’ in 2005. I see zero evidence to show this is not the case.
    Sam P.

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  3. Sandra Cass
    April 25, 2012

    Nice try to ignore the obvious but the concerns about crude oil peaking have never been about the “noise” – meaning the exact month some peak has hit. Concerns about global oil production are over the reality that when global oil production can no longer keep up with rising demand oil will continually rise in price. That clearly happened several years ago when production slowed and then essentially flattened. Back up a little from your graphs and notice that after 150 years of steady growth in oil production the global industry now is no longer growing.

    That is why the Brent price was $13 in 1998, $55 in 2005, and $111 in 2011. Now it is about $118. Your little peakie in 2011 is not helping.

    The economy is rate limited to energy input and oil is the master energy input. Every economy in the world is praying for a return to 4-5% growth. The DATA is not supporting that hope.

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  4. Asa Dye
    April 25, 2012

    Thanks for the article. Your work here is quite a bit more objective and less breathless than the majority of what passes for energy journalism lately. Perhaps one more chart showing price would help readers understand how we’ve been able to avoid coming off the peak. All we need to do is tolerate increasing prices that allow our expensive extraction technology to be profitable and it’s all good. Imagine all the oil we could extract at $180/bbl. Hell, for $300/bbl we could afford to peel half of Canada for the tar sands and keep production steady for another decade.

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  5. Doug T.
    April 27, 2012

    First of all, peak oil has nothing to do with “running short”. Rather, it is when we reach the peak, hence the use of the word “peak”. The price of oil has quadrupled over the last decade, roughly in each 5 year period. The first doubling, as noted on your first chart, pulled ~10% more oil supply into the marketplace. The second doubling of price has resulted in ~1% more oil supply. How you find comfort in this, and not alarm, from the data you present here, is beyond me.

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  6. faraway
    April 29, 2012

    Peak CHEAP oil is the issue. There will always be oil at some price.
    At what price can business as usual continue or be slowed or even halted?
    And price has to do with no only demand and supply but also EROI. How much does it cost (in energy, not money) to extract equivalent amounts of energy?

    Even at 2:1 someone can still make a profit extracting oil and selling it to someone. But most people are not going to be able to afford it at that EROI.

    Reply

  7. Dan Brown
    April 30, 2012

    Production is a factor, but so is pricing. The higher production is being sustained by increased prices.

    This is how markets work, but the problem with oil is that high prices are the problem, economically speaking, not any impending decline in production.

    Reply

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