Oil Officials See Limit Looming on Production (Graphic Warning)

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A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.

Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012. This rough limit -- which two senior industry officials recently pegged at about 100 million barrels a day -- is well short of global demand projections over the next few decades. Current production is about 85 million barrels a day.

The world certainly won't run out of oil anytime soon. And plenty of energy experts expect sky-high prices to hasten the development of alternative fuels and improve energy efficiency. But evidence is mounting that crude-oil production may plateau before those innovations arrive on a large scale. That could set the stage for a period marked by energy shortages, high prices and bare-knuckled competition for fuel.

The current debate represents a significant twist on an older, often-derided notion known as the peak-oil theory. Traditional peak-oil theorists, many of whom are industry outsiders or retired geologists, have argued that global oil production will soon peak and enter an irreversible decline because nearly half the available oil in the world has been pumped. They've been proved wrong so often that their theory has become debased.


From The Wall Street Journal via Dow Jones Newswires via Rigzone
http://www.rigzone.com/news/article.asp?a_id=53040

This article gets EVERYTHING wrong. I'll break it down...

A growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.

Uh-huh...long deemed fringe - despite warnings dating to 1956 that, eventually, oil production would begin to decline. They knew it all along. PEAK OIL IS NOT FRINGE!

"Is approaching"? BULLSHIT! It's already here and has been since 2004. Oil production has not been able to increase for the past FIVE years!!!

Next...

Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012.
...
Current production is about 85 million barrels a day.

WRONG! Actually, producers hit the production ceiling for crude oil in Jan. 2005, FIVE YEARS AGO! And the 85 million barrels per day cited is for ALL PETROLEUM LIQUIDS, (including natural gas liquids which the reporting agencies EIA and IEA began including in the oil production figures 2 years ago in order to mask the decline in crude). Crude oil production peaked at less than 74.8 million barrels per day in July of 2008 on the heels of that month's all time high price for crude $147 per barrel. The peak of cheap crude oil occured in Jan 2005 at 74.6 million barrels per day. CRUDE OIL production today is estimated at 69 million barrels, a decline of 5 million barrels per day.

Moving on...

But evidence is mounting that crude-oil production may plateau before those innovations arrive on a large scale.
...high prices and bare-knuckled competition for fuel

May plateau? That's funny SINCE IT ALREADY HAS PLATEAUED! It plateaued beginning in 2004!



High prices: Oil has been fluctuating around the $75 - $80 per barrel level for three months and rose from the $35 level over the course of the past year. Bare knuckle competition? What, like Afganistan and Iraq?

Moving further along...

The current debate represents a significant twist on an older, often-derided notion known as the peak-oil theory. Traditional peak-oil theorists, many of whom are industry outsiders or retired geologists, have argued that global oil production will soon peak and enter an irreversible decline because nearly half the available oil in the world has been pumped. They've been proved wrong so often that their ***THEORY*** has become debased.

Current dabate? What debate? THERE IS NO DEBATE AMONG THOSE STUDYING THIS ISSUE! All one has to do to know that we've already reached the peak in world oil production is to visit venues already studying the phenomenon like theoildrum.com and ASPO.

"They've been proved wrong so often that their theory has become debased." ... Really? So, how do we explain this:

U.S. oil production PEAKED in 1970, just as M. King Hubbert predicted in would in 1956.


Great Britain:


Mexico:


There's much more:

SOURCE: http://www.theoildrum.com/node/5576">TheOilDrum.com

PEAK OIL HAS BEEN "PROVEN WRONG SO OFTEN THAT THE THEORY HAS BECOME DEBASED"? PFFFFT!!! WHAT FUCKING THEORY?

In fact, only 14 of the 54 oil producing nations in the world are still increasing their oil production. And those 14 are not now nor will they EVER be enough to make up for losses. And, as if this wasn't enough, DISCOVERIES OF OIL PEAKED IN 1964:

UNDERSTAND THIS: ECONOMIC GROWTH CANNOT BE SUSTAINED IN A DELCINING OIL PRODUCTION ENVIRONMENT!!!

Read this to get an idea of how declining oil production effects the economy: http://kunstler.com/blog/2009/11/courting-convulsion.html

I could go on with the rest of the article located at the link but it's late. Suffice it to say that this WSJ/DJ piece of propaganda is just that: HOGWASH! PEAK OIL IS ALREADY HERE! And, chances are, you still won't accept that "your world is about to get a whole lot smaller" <--- Google it.

[the other one]

1. Well done, interesting rant. Worth a rec.

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2. Thanks. There is a LOT more to the story but I'd have to write a book. HEY!...hmmm...n/t

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3. RECENT BREAKING: Blowing the Whistle on Cheap Oil - IEA credibility under fire

http://www.financialsense.com/Market/allison/2009/1123.html

Is the Peak Oil clock ticking closer to midnight than generally believed? The credibility and integrity of the International Energy Agency (IEA) took a hit this month after two whistle-blowers from the IEA claimed the agency has been deliberately underplaying a looming oil shortage under pressure from the US government. The striking allegations appeared in the British newspaper The Guardian, and not surprisingly, were largely ignored by the mainstream US media.

The allegations raise serious questions about the accuracy of the organization’s latest World Energy Outlook publication on global oil supply and demand. In the Guardian article, an unnamed senior IEA official claims the US played an influential role in encouraging the agency to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

Future oil supply questioned

“The IEA in 2005 was predicting oil supplies could rise as high as 120 million barrels per day by 2030, although it was forced to reduce this gradually to 116 million and then 105 million last year,” said the IEA source in the Guardian article, who was unwilling to be identified for fear of reprisals inside the industry. “The 120 million bpd figure always was nonsense but even today’s number is much higher than can be justified and the IEA knows this. Many inside the organization believe that maintaining oil supplies at even 90 million to 95 million bpd would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources,” added the source.

A second senior IEA whistleblower who has left the agency (but also remained anonymous) said that an unwritten rule at the IEA was never to anger the Americans, and that there was not as much oil in the world as the agency claimed. “We have (already) entered the peak oil zone,” the source told The Guardian. “I think that the situation is really bad.” The Guardian article significantly noted that the British government, among others, uses the IEA statistics rather than any of its own to argue that there is little threat to long term oil supplies.

...snip...

http://www.financialsense.com/Market/allison/2009/1123.html

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4. More: The one thing depleting faster than oil is the credibility of those measuring it

http://www.guardian.co.uk/commentisfree/2009/nov/16/oil-running-out-madman-sandwich-board">The one thing depleting faster than oil is the credibility of those measuring it

I don't know when global oil supplies will start to decline. I do know that another resource has already peaked and gone into free fall: the credibility of the body that's meant to assess them. Last week two whistleblowers from the International Energy Agency alleged that it has deliberately upgraded its estimate of the world's oil supplies in order not to frighten the markets. Three days later, a paper published by researchers at Uppsala University in Sweden showed that the IEA's forecasts must be wrong, because it assumes a rate of extraction that appears to be impossible. The agency's assessment of the state of global oil supplies is beginning to look as reliable as Alan Greenspan's blandishments about the health of the financial markets.

If the whistleblowers are right, we should be stockpiling ammunition. If we are taken by surprise, if we have failed to replace oil before the supply peaks then crashes, the global economy is stuffed. But nothing the whistle-blowers said has scared me as much as the conversation I had last week with a Pembrokeshire farmer.

Wyn Evans, who runs a mixed farm of 170 acres, has been trying to reduce his dependency on fossil fuels since 1977. He has installed an anaerobic digester, a wind turbine, solar panels and a ground-sourced heat pump. He has sought wherever possible to replace diesel with his own electricity. Instead of using his tractor to spread slurry, he pumps it from the digester on to nearby fields. He's replaced his tractor-driven irrigation system with an electric one, and set up a new system for drying hay indoors, which means he has to turn it in the field only once. Whatever else he does is likely to produce smaller savings. But these innovations have reduced his use of diesel by only around 25%.

According to farm scientists at Cornell University, cultivating one hectare of maize in the United States requires 40 litres of petrol and 75 litres of diesel. The amazing productivity of modern farm labour has been purchased at the cost of a dependency on oil. Unless farmers can change the way it's grown, a permanent oil shock would price food out of the mouths of many of the world's people. Any responsible government would be asking urgent questions about how long we have got.

...snip...

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5. "Why your world is about to get a whole lot smaller"

http://www.google.com/search?q=%22Why+your+world+is+about+to+get+a+whole+lot+smaller%22&rls=com.microsoft:en-us:IE-SearchBox&ie=UTF-8&oe=UTF-8&sourceid=ie7&rlz=1I7GGLR_en

http://www.amazon.com/Your-World-About-Whole-Smaller/dp/0307357511

[Hannah Bell]

8. iea was hyping the "oil shortage" during the recent stock/speculation end game.

so i don't put much creedence in this article.

i've been through the apocalypse before.

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10. You know what...everytime this subject omes up all you do is decry it. You NEVER

have anything to offer than your uninformed opinion. I want to see you decontruct this entire premise - beginning with explaining what happened in all those countries that have reached their peak in production and slipped into decline - beginning with the U.S.

ETA: Oh yeah...and show me where IEA was "hyping" shortages and show how speculation was taking place. Your opinion is not good enough.

[Hannah Bell]

18. my opinions not uninformed, but i wrote during the "rice shortage" & then the "oil shortage"

& frankly, it's not worth the trouble again.

i've been called "ignorant" by folk with waaay more charts than you.

iea hyped the bubble.

the speculation has been widely acknowledged.

[JohnyCanuck]

6. Maybe these guys are onto something

CENTER for the ADVANCEMENT of the STEADY STATE ECONOMY

From their FAQs:

Why is economic growth a threat to economic sustainability, national security, and international stability?

To grow, an economy requires more natural capital, including soil, water, minerals, timber, other raw materials, and energy sources. When the economy grows too fast or gets too big, this natural capital is depleted, or "liquidated." To function smoothly, the economy also requires an environment that can absorb and recycle pollutants. When natural capital stocks are depleted, and/or the capacity of the environment to absorb pollutants is exceeded, the economy is forced to shrink.

National security, meanwhile, is a function of economic sustainability. The economic strife of a nation may result in insurrection or revolution, and eventually the nation-state may turn its agressions outward. From the Nazi doctrine of Lebensraum to the 21st century powder kegs, war invariably involves, and often revolves around, struggles for resources by nations that have exceeded their ecological capacities - or have had their capacities impacted by other states.


Can't technology alleviate the threat of economic growth?

Some economists think that, because a particular production process can become more efficient (more output per unit of natural capital), there is no limit to economic growth. These economists and “technological optimists” are disregarding the second law of thermodynamics, the entropy law, which tells us that we cannot achieve 100% efficiency in the economic production process. When the entropy law is applied across all economic sectors, or in other words when the limits to efficiency have been reached, the only remaining way to grow the economy is by using more natural capital (including energy).

Remember: to think there is no limit to growth on a finite planet is precisely, mathematically equivalent to thinking that you may have a stabilized, steady state economy on a perpetually shrinking planet. Both claims are precisely, equally ludicrous!

http://www.steadystate.org/CASSEFAQs.html#anchor_83

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11. 'Remember: to think there is no limit to growth on a finite planet...

...is precisely, mathematically equivalent to thinking that you may have a stabilized, steady state economy on a perpetually shrinking planet. Both claims are precisely, equally ludicrous!"

Thanks for the link, JC!

[Hannah Bell]

7. "looks like a plateau to me" - uh, look at 1980-85. recession.

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9. So, we've been in a recession since 2004? Please elaborate.

Also, did U.S. production peak as a result of a recession? How about all those other countries that have peaked, did all those countries peak and then go into decline as a result of a recession? Did the North Sea peak and go into decline as a result of a recession? Did all those countries I've stamped "Peak Oil!" on in the images above peak and then go into decline as a result of a recession?

Also, looks like the decline in production in the early '80s was a result of - wait for it - An ENERGY CRISIS!
http://en.wikipedia.org/wiki/1980s_oil_glut

The 1980s oil glut was a surplus of crude oil caused by falling demand following the 1973 and 1979 energy crises. The world price of oil, which had peaked in 1980 at over US$35 per barrel, fell in 1986 from $27 to below $10.<2><3> The glut began in the early 1980s as a result of slowed economic activity in industrial countries (due to the 1973 and 1979 energy crises) and the energy conservation spurred by high fuel prices<4>. The inflation adjusted real 2004 dollar value of oil fell from an average of $78.2 in 1981 to an average of $26.8 per barrel in 1986.<5>

...snip...

In a perfect world with increasing oil supplies, the cost per barrel of oil should be ~$20 per barrel. TODAY IT IS $76 per barrel - IN A SEVERE RECESSION!

Finally, it's NOT ME that is saying this. The article I began my OP citing is from the Wall Street Journal, Dow Jones News, and it was published at the industry site Rigzone.com. The CEO (both current and former) of several oil companys are also saying we are facing oil production challenges, including the CEO of Total. The former head of Saudi Aramco has also warned about a peak and subsequent decline in oil production. The list of sources from which I get my information after four years of researching this issue is long.

[Hannah Bell]

19. the recession officially started 12/07, manufacturing was declining in

sectors before that. other oil use indices down as well, e.g.:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=7087269&mesg_id=7087269

there was a major, hard recession under carter/reagan resulting fom paul volker's tight money policies.

the drop in economic activity 1979-1985 was NOT the result of any "energy crisis" from the 70s; as the op acknowledges, there was a glut.

it was the result of a money/jobs shortage, deliberate policy of the fed & the banksters.

"2004" = herring.

[Kievan Rus]

12. Peak oil is inevitable

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14. Not only is it inevitable, it's already here. 'One of the more successful rulers

in the Middle East, Sheikh Rashid was responsible for the transformation of Dubai into a modern port city and commercial hub. His famous line, "My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel." reflects his concern that Dubai's oil will run out in a decade or two. Thus he worked to build up an economy in Dubai that could survive the end of Dubai's oil boom.' - Rashid bin Saeed Al Maktoum, Prime Minister of United Arab Emirates and Emir (Ruler) of Dubai. http://en.wikipedia.org/wiki/Rashid_bin_Saeed_Al_Maktoum

[Kaleva]

13. Good job! Rec'd.

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15. Thanks. This is a very important issue not just for us but for our children. n/t

[Blue For You]

16. I drive a '70s Cadillac. Should I be worried?

:scared:

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17. Nope. You will simply have to pay more to fuel it. Meanwhile, the trucks that

bring the food to your local supermarket will have to pay more for fuel also. Last year's high fuel prices put hundreds of trucking companies out of business.

[earth mom]

20. K & R & Bookmarked. nt