Freddy Hutter, TrendLines Research

Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip

Hamilton is a waste of time. When he did this he predicted Spare Capacity would be nil at year-end 2012. In reality, it will be 6.47-mbd. He grossly overestimated Underlying Decline Observe. It is only 3.2% annually. He thought 7%. He admits his mistakes in the new footnotes.

Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip

Thanx jerrydd for your thoughtful comments. But your impression that Reserves are falling is wrong. BP calculated Reserves of 688-Gb in 1982. Consumption since '82 has been 681-Gb. But over the time frame, BP has doubled its estimate of to 1409-Gb (in June 2009). This is an increase of 27-Gb/yr over and above annual usage.

Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip

I agree GTL technology is substandard; but since GTL is projected to be only 2% of 2030 All Liquids production, it is a straw-man argument.

Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip

All stakeholders consider NGL as part of All Liquids as defined by the agencies and producers. Your implication that Regular Conventional Crude (light sweet) is about to undergo some earth shattering seachange is misdirected. RCC peaked at 68-mbd in 2005 and is only 62 today. It is a mere 74% of All Liquids and will be less than 50% in the commonly used time frames.

In short, nobody cares about your silly narrow definition of "real" oil.

Oil Supply: As Russian Production Tops Out, World Supply Will Continue to Slip

Would someone please inform Gregor that 12 of the g-20 nations were in Recession in 2009Q1. World oil production set 4 monthly records in 2008 before the onset of the financial credit squeeze.

The IEA predict peak oil in 2030. The EIA in 2090. The average of the top 20 extraction forecasts reveals oil is poised to rise from 84-mbd today to 93-mbd in 2023.

MacDonald seems to be feeding some kind of agenda-driven purpose rather than any connection with reality.

Peak Oil and the IEA (What they don’t want you to know…)

It is truly unfortunate that nobody commenting (incl mr badel) has actually fully read November's IEA WEO. The 6.7% Underlying Decline Rate Observed (UDRO) is a mere subset of total All Liquids. When measured to 2030, IEA expects only a 1.9% UDRO according to their maintenance capacity stats. This occurs 'cuz regular conventional crude plays a decreasing role as the time frame unfolds.

Having said that, TrendLines Research chastised IEA upon its release. Our model indicates that UDRO will be a more robust 3.7% avg to 2030. It is improbable that IEA's 107-mbd target will be attained. Based on my higher annual loss factor, Peak Oil should occur in 2025 @ 100mbd.

Does Crude's Price Reflect Reality?

Babak wrote: 'Considering the extreme economic downturn, crude oil should have fallen to $20 - previous support from 2002. That’s just my own guess."

There is no doubt that tightness of surplus capacity is an important component of contract crude price. But even at the July 2008 high of $134, the global surplus capacity of a mere 2mbd was only an $18/barrel forcing. Currency debasement played a far greater role ($30/barrel), while tight inventories ($6/barrel) were a factor as well.

2008 was a perfect storm - one that affected virtually all commodities. Attempting to seek a basis for these mega movements based on fundamentals is futile. At least that's what the last ten years of observation reveals: trendlines.ca/monthlyr...

Peak Oil for Dummies

Realitychecker wrote:

> Another good article on the impending energy crunch by Lionel. The
> link below goes to an interesting paper produced by Shell, which
> descries two future energy scenarios.

The cherry picked data is not indicative of any crunch ... neither total energy nor oil liquids.

The 2009 Royal Dutch Shell projections are indeed a case in point. In 2008, the Scramble scenario had a 99mbd Peak in 2020. The 2009 studay amends this to 97.

The 2008 Blueprints scenario projected a Peak Plateau of 101mbd from 2020 to 2030. 2009 forecasts amends the Peak during this plateau to 100mbd.

Today's production is 84mbd. The outlook for the next two decades remains status quo according to Shell. The probability of imminent Peak Oil is once again marginalized...

Peak Oil for Dummies

Here's a chart of the five Regular Conventional Crude projections: trendlines.ca/scenario...

2 by MK Hubbert ('56 & '74), Albert Bartlett ('98) & 2 current forecasts (Hutter & Campbell)

Peak Oil for Dummies

Your link does not track light sweet crude, wadosy. As i mentioned above, light sweet peaked at 68 and is today only 61mbd. The 74-mbd plateau shown in your new link is tainted data i.e. includes alaskan arctic crude and deep sea projects in Brazil, Angola & Nigeria.

It was the collaboration of similar early data between TrendLines & Colin Campbell that resulted his dramatic declaration of the Regular Conventional Crude Peak in his August 2005 ASPO newsletter. Subsequent data revealed that PEAK was actually a few months later ... in 2005.

Neither Campbell nor myself foresee a breach of the 68-mbd production record for regular conventional crude. It is this narrow definition that was the subject of studies by MK Hubbert & Albert Bartlett.

Contributive papers of the "unpure" metric including arctic & deep sea facilities were conducted by Ken Deffeyes, Seppo Korpela, Renato Guseo & John Walsh. As mentioned by William Davison above, differing definitions have not been helpful to the public discourse.

Peak Oil for Dummies

Bankrupt of any further arguments, the rhetoric by wadosy is deteriorating into a childish rant.

And hoping nobody would look, his own EIA link shows production of 84.6-mbd in 2005 was surpassed (85.4) last year. It further reveals that the 2005 monthly record of 85.3 was toppled four times and now stands at 86.6-mbd.

Even as he typed his post, analysts around the world had announced upward revisions to their 2009 & 2010 Demand forecasts. With worldwide Surplus Capacity approaching 6-mbd, all monthly/quarterly/annual records are poised to fall in 2011...

Peak Oil for Dummies

Wadosy in overly concerned with underlying decline in his future. He need only look to the past to feel relieved. Since 1970, the oil sector has installed an avg 2.9-mbd/yr of new capacity (120mbd). 1.9-mbd of this addressed the Underlying Decline Observed loss factor and 1-mbd/yr went to new Demand (82 & 38mbd respectively).

In short, Producers came up with a new "Saudi Arabia" every three years...

To avert terminal production decline in the medium to long term, the Industry need only extend its current decadal trend of 3.8-mbd of new capacity/yr. This will counter the current rate of underlying decline (2.8-mbd) and provide 1-mbd for annual growth.

Presently available data on Reserves implies the intersection between (rising) loss factor and new capacity will not be resource constained 'til 2031. Annual production decline will commence unless annual Megaprojects are enhanced.

Even this event is not beyond the realm. Albeit the present trend is 3.8-mbd of new capacity/yr, 4.3 is being installed in 2009 & 4.5-mbd is scheduled to be commissioned in 2010.

Only capital & geopolitical issues threaten oil growth over the coming decades ... not geology.

Peak Oil for Dummies

No Lionel, Peak Oil is not mainstream. It is a 20 year hoax. The only oil running out is Regular Conventional Crude ... known as light sweet. As shown in our charts, RCC peaked in 2005 at 68-mbd. Today it is only 61-mbd, comprising a mere 72% of All Liquids production ... the latter being the stat quoted by all the agencies and oilco's.

By 2030, light sweet will be only 48% of global oil production, which in turn will have grown to 99 from 84-mbd today.

In short, if the status of low hanging fruit was your intent, your post is four years late...

Peak Oil for Dummies

wadosy wrote:
> so the fact that oil production's been flat for the last four or
> five years despite the price increasing seven-fold and drills nearly
> doubling has nothing to do with anything.

Wrong again, grasshopper. In 2003, extraction was 79.6mbd ... and rose to 85.5 by 2008 (1.2mbd/yr growth). BTW, between 1970 & today, oil production rose 40mbd or 1mbd. You are "flatly" in error.

The avg contract price in 2003 was $26. Today it is $67/barrel. So, price is up 2.5's over that period ... clearly not seven-fold.

With 6-mbd of surplus capacity, the industry is poised for several years of new production records and at least four years of sub-triple digit prices.

The rest of your post and the next one border on the lunatic fringe. Sorry, i ain't going there...

Peak Oil for Dummies

wadosy wrote:

> how do you explain this, freddy?
> img382.imageshack.us/i...

It's just a silly graph. Silver spiked. Iron, corn, sugar, copper & 50 other commodities spiked. Did they all PEAK in July 2008? And why are they all back to 2004 levels today?

And if there is a shortage of oil, why was it only $32/barrel in January? Why was it $67/barrel one year later?

Learn one thing today, grasshopper: Correlation does not imply Causation.