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Peak Oil/Peak Exports
triage
post Posted: Oct 23 2011, 04:16 PM
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Usually the cornucopians like Mr Yergin argue that there will not be a peak oil event because new and improved technologies will always come along to make previously unrecoverable oil recoverable - examples often given are how fraccing has given access to shale oil and gas and how pumping water into old oil reservoirs extended the life of those reservoirs - and that in any case as soon as the price of oil goes up lots of oil that was previously not worth recovering becomes worth the effort - examples of that are the heavy sour Venezuelan sludge that apparently China is building refineries to cope with, and the Canadian tar sands.

Here is a scholarly paper - even though the dude uses "nice" and "pretty" (apparently you don't get kicked out of academia in California for using "nice" and "pretty") - that finds that the past suggests otherwise. Rather, it seems, that technology and a rising price of oil affected the rate of decline in oil supplies but were not sufficient to reverse oil supplies going into decline in existing oil provinces. In fact the chap argues that what allowed the production of oil worldwide to keep increasing over the last 150 years - at least until 2005 - was luck in finding new oil provinces. The author contends that it is this run of luck that has allowed oil markets to behave as if oil supplies were not exhaustible, but that going on the impact of past temporary supply shortages we can get some idea what would happen were our luck finally runs out.

This is the paper's abstract:

QUOTE
This chapter explores details behind the phenomenal increase in global crude oil production
over the last century and a half and the implications if that trend should be reversed.
I document that a key feature of the growth in production has been exploitation of new
geographic areas rather than application of better technology to existing sources, and suggest
that the end of that era could come soon. The economic dislocations that historically
followed temporary oil supply disruptions are reviewed, and the possible implications of that
experience for what the transition era could look like are explored.


And some 30 pages of leisurely reading later (though there are bits that are too technical for me) here are the last couple of paragraphs:

QUOTE
Knowing what the future will bring in terms of adaptation of both the supply and demand
for petroleum is inherently difficult. However, it is not nearly as hard to summarize the
past. Coping with a final peak in world oil production could look pretty similar to what
we observed as the economy adapted to the production plateau encountered over 2005-2009.
That experience appeared to have much in common with previous historical episodes that
resulted from temporary geopolitical conflict, being associated with significant declines in
employment and output. If the future decades look like the last 5 years, we are in for a
rough time.

Most economists view the economic growth of the last century and a half as being fueled
by ongoing technological progress. Without question, that progress has been most impressive.
But there may also have been an important component of luck in terms of finding
and exploiting a resource that was extremely valuable and useful but ultimately finite and
exhaustible. It is not clear how easy it will be to adapt to the end of that era of good
fortune.


http://dss.ucsd.edu/~jhamilto/handbook_climate.pdf



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
triage
post Posted: Oct 8 2011, 12:09 PM
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In Reply To: triage's post @ Sep 22 2011, 10:43 AM

Another rebuttal of Mr Yergin's denial of peak oil, this time in a blog on the Harvard Business Review. One of the writers, Gregor MacDonald, runs his own blog which I find contains useful if not all that regular analysis of the energy sector.

http://blogs.hbr.org/cs/2011/10/there_will...ut_can_you.html

Contains a handy if somewhat sophisticated definition of what people mean when they refer to "peak oil":

QUOTE
We like the formulation of petroleum economist Chris Skrebowski, which defines peak oil as the point where "the cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time."


There seems to be a fair amount of frustration in some quarters that Mr Yergin and big oil seem able to get their side of the story into the mainstream media but those same outlets are not willing to run the counter arguments. I know the HBR is widely read and regarded but I'm not sure how much the views of Mr MacDonald and his mate will get being on a HBR blogsite.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
triage
post Posted: Sep 22 2011, 10:43 AM
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Last weekend in the Wall Street Journal Daniel Yergin, who is chairman of IHS Cambridge Energy Research Associate, wrote an article that totally rubbished the idea of peak oil. Apparently CERA is widely considered a shill for the major oil companies in much the same way that the Heritage Foundation is for big tobacco and nuclear interests.

In the comments section of the drumbeat thread on The Oil Drum website there is plenty of discussion and links to critiques of Mr Yergin's article. Here is another response, which I like for how understated and reasoned it is. Also there are some informed postings in the comments section imo.

http://www.econbrowser.com/archives/2011/0...oughts_o_4.html

For me, if I wanted any further proof that there is something of substance to the peaking of conventional oil happening "soon" then I would look at where major resource companies like Shell, ConocoPhillips, BHP, and PetroChina are pouring billions of dollars, and it is not solely into conventional oil assets.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
davo22
post Posted: May 31 2011, 06:52 AM
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QUOTE
Here is what BP shows for Russian net oil exports for 2002 to 2009 (of course, no argument about Saudi Arabia): 2002: 5.1 mbpd (total petroleum liquids)
2003: 5.9
2004: 6.7
2005: 7.0
2006: 7.1
2007: 7.3
2008: 7.1
2009: 7.3

Russian net oil exports increased at 5%/year from 2002 to 2007, but then stagnated, with a decline in 2008 and no change in 2009 net exports, versus 2007 (rounded off to 0.1 mbpd).

My frequent co-author, Samuel Foucher, and I have written extensively about net oil exports for the past five years. Recently, we have been focusing on what I call Available Net Exports (ANE), which I define as Global Net Exports (GNE) less Chndia's combined net oil imports.

Following are what we show for GNE for 2002 to 2009 (oil exporters with net oil exports of 100,000 bpd or more in 2005, which account for 99% plus of global net oil exports).

Note that GNE increased at about 5%/year from 2002 to 2005, and then we had flat to declining GNE. I suspect that this inflection point was quite a shock to oil importing countries, especially developed oil importing countries.

Also shown are Chindia's combined net oil imports. The difference between the two is what I define as ANE.

As you can see, ANE fell from 40.8 mbpd in 2005 to 35.7 mbpd in 2009. A plausible estimate is that ANE could be down to about 27 - 30 mbpd by 2015.

Global Net Oil Exports Less Chindia’s Combined Net Oil Imports = ANE
(BP + Minor EIA data, mbpd) :

2002: 39 - 3.5* = 35.5 (ANE)

2003: 42 - 4.0 = 37.4

2004: 45 - 5.1 = 39.9

2005: 46 - 5.2 = 40.8 

2006: 46 - 5.5 = 40.5

2007: 45 - 6.1 = 38.9

2008: 45 - 6.6 = 38.4

2009: 43 - 7.3 = 35.7
2010: 44 - 8 = 36**

*Chindia's combined net oil imports
**Estimated



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davo22
post Posted: May 31 2011, 06:49 AM
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Westexas oildrum..

QUOTE
In any case, regarding the (2005) top five net oil exporters, following is my estimate for 2010:

(2005) Top Five Net Exporter Update

I took the EIA data for total petroleum liquids for 2010 and then extrapolated the 2005 to 2009 rate of increase in consumption for Saudi Arabia, Russia, Norway, Iran and the UAE to come up with estimated (2005) top five production of 29.8 mbpd and consumption of about 8.0 mbpd, resulting in estimated 2010 net exports of 21.8 mbpd.

Here are the BP (2005) top five net exports data for 2005 to 2009, and my 2010 estimate:

2005: 23.8 mbpd
2006: 23.6
2007: 22.9
2008: 22.8
2009: 19.3
2010: 21.8*

*Estimated

Note that at the 2002 to 2005 rate of increase in net exports for the top five (6.3%/year), they would have been (net) exporting 32.6 mbpd in 2010, versus the estimated net export rate of 21.8 mbpd. The top five data continue to fall between Sam Foucher's middle case and high case. The wild card continues to be Russia, the only country where the production data are currently falling at the upper limit of Sam's projections.

Sam's most optimistic projection is that by the end of 2014, the (2005) top five will have (net) exported about half of their post-2005 CNE (Cumulative Net Exports).




 
davo22
post Posted: May 18 2011, 06:56 AM
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QUOTE

But net oil exports are far more important to the oil importing countries, and we have seen a measurable decline in both Global Net Exports (GNE) and Available Net Exports (ANE). I define ANE as GNE less Chindia's combined net oil imports. ANE fell from about 41 mbpd in 2005 to 38 mbpd in 2008 and then down to 36 mbpd in 2009 (total petroleum liquids).

 We don't have the 2010 data yet, but a plausible estimate is that ANE will be down to 27 to 30 mbpd by 2015.

 Given the above numbers, what is truly bizarre is the widespread conventional wisdom belief that generally rising oil prices are not related in any way to supply issues.



For more info, do a Google Search for: Peak Oil Versus Peak Exports.

*2004 article on this topic:
http://www.nytimes.com/2004/04/08/business...long-in-decl...


 

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Barra
post Posted: Apr 29 2011, 10:26 AM
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In Reply To: bermuda's post @ Apr 29 2011, 09:29 AM

G'day Triage , Bermuda

I caught the tail of that catalyst program and watched with interest that piece with Dr Phillip's looking at the nuclear industry as an option for Australia. That bloke from the nuclear industry they interviewed really drove home how unrealistic a nuclear plant would be in australia. Not only do we not have the 1500 MW steady state demand within the grid which nuclear plants require, but we couldn,t even unload the 200 tonne components at a port.

They then juxtaposed the Tru Energy combined cycle 600mw gas turbines in the Illawarra . 3 years to build, 20 times cheaper and
60% saved in Co2 terms versus a coal plant.. What was it, something like 20 years to get a nuclear plant built. And ofcourse the CCGT will never go into meltdown due to some power failure or other problem.

Only one conclusion can be made from this, if coal is going to be phased out as the predominant fuel for stationary power due to emissions reduction targets, then gas is going to fill the void.

Chrs

Barra


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Alethia
post Posted: Apr 29 2011, 10:22 AM
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In Reply To: triage's post @ Apr 28 2011, 08:52 PM

Interesting program. Thanks.

I have been dabbling with GDY and PTR for years. Got into GDY very early. Got to wonder why (with apologies) some tin pot African country can get geothermal energy to work and we are struggling here in Australia????

I have sold out of both GDY and PTR until they can get their collective acts together. Now revisiting solar. Best conversion rates for solar panels is now 43%, but I understand those we have on our roof barely eek out 8%??? Australia should be the world leader in this energy source, but I understand the Germans are way ahead of us.

Time is definitely ticking away on this problem. Thanks for the link Traige.





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The caterpillar does all the work but the butterfly gets all the publicity.
 
triage
post Posted: Apr 29 2011, 10:13 AM
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In Reply To: bermuda's post @ Apr 29 2011, 09:29 AM

QUOTE
That good looking presenter presented well. Huge implications coming up.


You're not going to start stalking her are you b? rolleyes.gif biggrin.gif

But I guess you mean huge implications flowing from the crunch, not the crush. Yes, I think so too.

However I have to say that even though I have a Jeremy Grantham take on things - where conventional oil is but the first of a number of commodities that will soon be in short supply - I continue to see virtually nothing to support that view. Is the world really only a year or two away from an oil crunch? Life seems to go unchanged, none of the stocks that should be rerated due to such a paradigm shift appear to any more favoured, no pollies or mainstream media groups seem to be making it a big issue.



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
bermuda
post Posted: Apr 29 2011, 09:29 AM
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In Reply To: triage's post @ Apr 28 2011, 08:52 PM

Thanks Triage,
That good looking presenter presented well. Huge implications coming up.

 
 


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