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Peak Demand (88mbd plateau 2019-2047) ... may pre-empt Supply Peak of 103mbd in 2039

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Peak Demand (88mbd plateau 2019-2047) ... may pre-empt Supply Peak of 103mbd in 2039

Marsh Lake, the Yukon ~ March 22 2011 FreeVenue public release of Oct 30th guidance @ our MemberVenue ~ Today's update of our global oil depletion model, Peak Scenario 2500, reveals there is sufficient resource and proven capacity build for a potential All Liquids Supply Peak of 103-mbd in 2039.  Post-peak decline would average 2.7% per annum in the first two decades ... a rate that could be catastrophic but for the very long lead-up time for necessary mitigation & transition.

But, this is a scenario that may never come to fruition.  The four-decade trend of production rising by 1-mbd/yr seems to be giving way to a waning growth rate in Demand that will see production cease to rise after it reaches 88-mbd in 2019.

The current PS-2500 revision reflects three factors:  (a) the fourth run of our new Peak Demand module;  (b) a further trimming of annual new capacity projection to 2.9-mbd; & (c) a 73-Gb reduction of our URR estimate (mostly Regular Conventional Oil).

It projects All Liquids flow will not fall below this year's pace of 86-mbd 'til 2055 ... ensuring decades of plentiful supply.  All Liquids will cross the midpoint of its 7.0-Tb URR in 2099, fifty-two years after Peak.  With petroleum-based liquids exhausting around Year 2508, there appears to be only 498 years of oil left!  After that date, flow will be solely dependent on renewable Biofuels.

The pace of 2010 production has been surpassing the 2008 annual record (85.5)since the onset.  2008's quarterly production record fell in Q1 ... with yet another record in Q2.  Seasonal flows indicate a new monthly record should be set next January.  Monitor current progress of global Supply and the status of the Top 7 national producers at our new World Production Records page.

The pause in annual global production in 2008 was the the 11th since 1975.  Business cycle patterns indicate we can expect similar softness  in 2017, 2026, 2034 & 2043, and these potential economic downturns are reflected in the PS-2500 modelling.

A record 4.7-mbd of new facilities were commissioned in 2009, resulting in an estimated 4.1-mbd of immediate new flows.  Of this New Capacity, 2.3-mbd was required to offset loss of production due to Underlying Decline Observed (UDO) and the balance raised global Surplus Capacity to levels (6.3-mbd) not seen in two decades.

Year-to-date stats reveal that the Underlying Decline Rate Observed for All Liquids is:  2.8% (2.37-mbd) worldwide,  2.7% (0.27-mbd) in Saudi Arabia & 2.5% (0.22-mbd) in the USA.  This confirms UDRO has formed a sixth cycle top since 1970, with another surge of the decline rate to 3.1% in 2008, and further builds the case that our hypothesis that UDRO is cyclical is correct.  By past experience, we expect the loss factor will bottom @ 2.7% in 2012, before its next cycle high (3.7%) during a probable 2017 Recession.  Modelling of the general trend (including its 8.5 year cycles) suggests a rise in UDRO to 4.1% by 2050.

PS-2500 is a composite analysis of the 7 major components of All Liquids.  Regular Conventional Oil (RCO) is the only category that is post-Peak, down 6-mbd since 2005.  The 11 streams tracked as All Liquids include RCC, NGL (incl refinery gain), and the non-conventionals: GTL (gas-to-liquid), Deep Sea, Arctic, Bitumen (oil sands), X-Heavy, CTL (coal-to-liquid), Kerogen (shale) & BTL (biofuels-to-liquid) ... each with its own unique production profile.

PS-2500 is a flow based bottom-up analysis by TrendLines Research energy analyst, Freddy Hutter.  It is our contribution to the 20 models that comprise the TrendLines Scenarios Avg that we track each month, illustrating industry consensus on the timing of Peak Oil.

End of highlights - Full release & more charts at this link at our website