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World Oil Production Extraction Supply Plateau Charts - December 2007 [Dec. 13th, 2007|09:30 am]
Aaron Wissner
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World Oil Production Extraction Supply Plateau Charts - December 2007

The chart above shows 1% error bars.

This chart shows a 12-month moving average, and could be titled "Average for the Previous 12-month Period".

The maximum thus far was 84.678 mbpd average for the 12-months from March 2006 to February 2006. The next highest was 84.663 mbpd from November 2005 to October 2006. The moving average first achieved ~84 (83.937) mbpd for the 12-month period of May, 2004 to April 2005.

World oil production has remained at plateau within 1% of the 84.678 mbpd maximum since September, 2004.

The data comes from the Energy Information Agency of the U.S. Department of Energy.

Raw Source Data: http://www.eia.doe.gov/emeu/ipsr/t14.xls

Analysis Data Sheet: http://localfuture.org/charts/200711data.xls

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Quoted in Whole or In Part At

From: (Anonymous)
2007-12-13 03:26 pm (UTC)

all iquids vs crude oil + condensate

There's something I've always wondered about as a lay observer of peak oil:

What is the "actual" or net liquids production? Your figures are for "all liquids," which include natural gas liquids, biofuels, refinery gains, etc.

How much "liquid" is spent producing liquids? Does this lead to double-counting?

How exactly ARE the liquids counted? No one has ever cleared this up for me. Are all liquids production facilities simply metered and added together? What prevents energy from crude oil from being recounted in the energy for, say, biodiesel?

It seems to me a "net liquids" chart would actual depict a DECLINE instead of the plateau we see here.
(Reply) (Thread)
[User Picture]From: valuesystem
2007-12-13 08:34 pm (UTC)

Re: all iquids vs crude oil + condensate

You may be correct about decline.

Keep in mind that we are indeed looking at a decline when calculated per capita. I believe the population has grown faster than oil supply since the 80's, although I don't recall where I saw the chart of that.

It is a very good question about net production. I suspect the EIA could answer this. They probably have a data set somewhere that shows this.

(Reply) (Parent) (Thread)
From: (Anonymous)
2007-12-14 03:02 am (UTC)

Re: all iquids vs crude oil + condensate

Hi, this is Mike again. I wrote above.

The per capita decline chart for oil that you mention could be Richard Duncan's horrifically-memorable chart in his Olduvai Theory essay. Scroll down here and you'll find it:


Thanks, by the way for being succinct as well as informative in your writings!
(Reply) (Parent) (Thread)
[User Picture]From: valuesystem
2007-12-14 03:27 am (UTC)

Re: all iquids vs crude oil + condensate

Yes, that could be it. I recall reading that page a couple of years ago. It is probably a good time for a refresher.

Glad you find the writings useful. I'm still working on the succinct part (as well as the spelling errors). :-)
(Reply) (Parent) (Thread)
From: (Anonymous)
2007-12-13 09:14 pm (UTC)

time frame

The charts look good, and the data is convincing, but the time frame may be a bit misleading. If you look at the data for the last 20 years it's easy to see there have been other plateaus, even declines in oil production for durations at least as long as the current one.

I've seen other analysis that make the same mistake, too narrow of a time frame, you would do your readers a service by adding more data to your analysis.
(Reply) (Thread)
[User Picture]From: valuesystem
2007-12-14 12:28 am (UTC)

Re: time frame

Thanks for the compliament on the charts. It took me a while to get them to be really clear and concise like that.

I don't have the EIA data any further back than 2001 for month by month statistics, so I can't confirm or deny that there have been plateaus. I would have to get a hold of the data to do the same analysis with it. I think it is extremely unlikely that there has been a plateau of this duration.

I'll take a look anyway... my rough charts show something in the early 90's, but I as I said, I would need the data to confirm that. I think the key argument that this is a supply constraint would be that the impact on prices. I doubt the early 90's saw the same impact, although again, I don't have the dataset in front of me.

Look at the monthly chart, no more than a 1% varience in over three years. That is remarkable, incredible, and damn tough to explain. What is does explain is the increased volitility in the oil prices, and the general increase in prices.

Let me see if I can find something for you, just a sec...

Okay, here it is...

Take a look what happened in 2003 and 2004. The volitility practically vanished, as the oil prices moved from an increasing supply to a static (plateau) supply.

I don't think that the charts in themselves are sufficient to conclude that we are at or past peak oil, but given the mounting evidence, the findings of the oil geologists, the number of rigs now in service, the number of countries and fields past peak, the price increases... it all adds up to a very high probability that we are there. Of course, we can't know for sure, but we don't need to either, we just need to know that there is a high likelyhood, something worth considering seriously when planning for the future.
(Reply) (Parent) (Thread)
From: (Anonymous)
2007-12-14 10:56 pm (UTC)

Re: time frame

I was thinking of this:

The early nineties especially, although as you pointed out that was a time of low prices. Speaking of prices, it would be interesting to see a projection based on this formula:

Cost of obtaining nonrenewable resources (http://en.wikipedia.org/wiki/World3_nonrenewable_resource_sector#Cost_of_obtaining_nonrenewable_resources)

Note the table showing "Relative Resource Cost", it stays at one until half the non-renewable resource is depleted (NRFR), then it starts rising very rapidly. Hmmmm..., looking at historical long-term oil prices:


we see something very interesting, the price in nominal dollars is relatively flat (excluding the political oil shocks of the 70's) until very recently.

If we make the following assumptions about oil production:

1. Resource fraction remaining is currently 0.5 or less
2. Relative resource cost has been about $20-30/bbl long-term in nominal dollars
3. Total URR is about 2x10^12 bbl
4. Production falls about 2% per year from current 30x10^9 bbl/year (oil only, not all liquids)

Then we can make the following price projections (not adjusted for inflation) based on the table in the article referenced above:

Year 2005-2007
NRFR 0.5
Price $42-63

Year 2012-2014
NRFR 0.4
Price $95-142

Year 2019-2021
NRFR 0.3
Price $380-570

Year 2029-2031
NRFR 0.2
Price $886-1,329

These are rough top-of-the-head estimates and subject to wide margin of error, but if they are anywhere in the realm of plausibility then we can expect oil to reach $1000/bbl sometime in the next 20 years. Even that may be a conservative estimate as there is no accounting for geopolitical shocks or resource nationalism. Not much time to make other arrangements...

(Reply) (Parent) (Thread)
[User Picture]From: valuesystem
2007-12-15 02:12 am (UTC)

Re: time frame

I'll have to take a read of those articles to understand exactly the concepts.

ASPO states 1.2 gigabarrels remaining that could be extracted using best current methods. This is the same as saying "39 years at the current level of consumption". If we want a steady rate of supply decline, and we started now, it could be kept to only 2.5% per year.

Prices have risen by 24% per year since April 2004. Plotting that out yields the following:

NRFR 0.4
Year 2016 - (9 years from now)
Price - $527 per barrel

NRFR 0.3
Year 2027 - (20 years from now)
Price - $5,614 per barrel

NRFR 0.2
Year 2043 - (36 years from now)
Price - $175,386 per barrel

Keep in mind that petroleum, just for its energy content alone, is worth over $50,000 when converted to equivalent work done by human muscle power, paying minimum wage.

In this case, oil would not be burned for fuel furthur out than about 25 years from now, because it will be much too valuable, and used solely as a chemical feedstock.

The problem with this analysis is that a 24% increase in price is not adjusted for inflation.

Currently, U.S. inflation is running around 11%, as noted in the "Price of a Thanksgiving dinner" article. Let's subtract that, and try a 13% annual price increase, and see what we get for constant dollars that aren't inflating...

2016 - $228
2027 - $876
2043 - $6,189

Of course, these dates are not going to be correct because of the various economic shocks. Also, the 13% is only due to our being at plateau. Once production actually begins the 2.5% or more annual decline, the prices will probably go up much faster. Adding complexity, inflation could be fast or slow, there are economic recessions to consider, and etc.

Really, these numbers are mostly academic, since we don't know the rate of annual decline. The fact that we are at a plateau, rather than rounding a smooth curve, makes it difficult to see what the decline rate. What we do know is the longer we stay at plateau, the steeper the decline.

This also assumes that we can get another 1.2 trillion barrels out of the ground. This may be optimistic in itself.

What if we are already at NRFR 0.4 (need 3.1% decline rate) or NRFR 0.3 (need 4.1% decline rate)?

What if the world decline rate is similar to some national and field decline rates of between 5% and 10%?

I guess there are two things that matter, #1 decline rate of production and #2 total endowment.

You are certainly right, not a lot of time to make other arrangements.
(Reply) (Parent) (Thread)
From: (Anonymous)
2007-12-14 03:32 am (UTC)
Best Oil charts on the internet. Thanks for this - a REAL eye-opener.

Great work.
(Reply) (Thread)
[User Picture]From: valuesystem
2007-12-14 03:34 am (UTC)
Thanks, they are intended to be extremely simple, extremely accurate, and extremely clear.
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