Comments on the EIA Supply & Demand chart
Posted by Heading Out on August 12, 2005 - 4:50pm
The picture that ProfG posted above comes from the EIA Website, with a table that is periodically updated, showing, as the chart did, where the oil is coming from and where it is going. (In the blogroll we take you to the EIA OPEC production table under OPEC Production (EIA)
There are a couple of things, however, that I wanted you to be aware of in looking at that chart. The first is that it was for the first Quarter (1Q) of this year. If we look back at the history since 2001, these are the numbers in mbd:
Year . . . . . . . . . .Supply. . . . . . . . . . Demand
2001 . . . . . . . . . .77.73 . . . . . . . . . . .77.67
2002 . . . . . . . . . .76.93 . . . . . . . . . . .78.37
2003 . . . . . . . . . .79.65 . . . . . . . . . . .79.90
2004 – 1Q. . . . . . . .82.26 . . . . . . . . . . .81.91
2004 – 2Q. . . . . . . .82.31 . . . . . . . . . . .81.12
2004 – 3Q. . . . . . . .83.48 . . . . . . . . . . .81.19
2004 – 4Q. . . . . . . .84.02 . . . . . . . . . . .84.46
2005 - 1Q. . . . . . . .84.12 . . . . . . . . . . .84.38
The differences between these numbers has been provided by stockpiles set up for just such events (and the flow in and out of those stocks is given in the underlying table at the EIA site). And as a general rule it is in the 4th Quarter (4Q) that demand is highest, and against which stocks are built every year.
Thus in the first quarter of this year those responsible began to rebuilt the stocks, and took them to the highest level they have been. Why? Because the planners were anticipating that the 4th Quarter of this year will see an increase over oil demand from last year of perhaps 2 mbd and this is significantly more than can be immediately supplied. (In the old sandwich shop analogy you start making sandwiches early in the morning so that when the rush hour comes there will be enough to go round and people don't have to wait for them to be made).
The diversion of oil/gas/diesel into those stockpiles shows up as demand, but it is not immediate and is forward thinking on the part of the companies, even though filling that demand keeps the price higher now, it means that – if it has been done right, and we don't know that yet – the nations of the world will have enough fuel for this winter.
The second thing that must be born in mind is that some of the demand is going into the SPR. The American goal was to have this filled to a capacity of 700 million barrels by this August, and they bought to ensure that target. Which was met. There is now a goal of increasing this to 1,000 million barrels. Buying for that, obviously, is part of demand, so will be the purchases of the Chinese Government for their SPR, for which they have just completed the first stage of the storage facilities. Whether they buy now or later will have some additional effect on demand, the only question is when will they buy, and at what price.
Putting all these things together, this set of data by itself is not a huge worry, but exponential growth (which the video from Dr Albert Bartlett explained very well) is. But we may be about at the end of that period in our history.
In which regard, Michael Lynch has apparently suggested that there is no scientific background to justify the predictions of Colin Campbell, Jean Lahererre and others. Well to understand why there is a large scientific justification, you have to know a little more about oil reservoirs. Which is techie talk, but since we have now, almost, reached TD in that oilwell we're drilling on Saturdays, maybe we can start on that tomorrow.
Technorati Tags: peak oil, oil
There are a couple of things, however, that I wanted you to be aware of in looking at that chart. The first is that it was for the first Quarter (1Q) of this year. If we look back at the history since 2001, these are the numbers in mbd:
Year . . . . . . . . . .Supply. . . . . . . . . . Demand
2001 . . . . . . . . . .77.73 . . . . . . . . . . .77.67
2002 . . . . . . . . . .76.93 . . . . . . . . . . .78.37
2003 . . . . . . . . . .79.65 . . . . . . . . . . .79.90
2004 – 1Q. . . . . . . .82.26 . . . . . . . . . . .81.91
2004 – 2Q. . . . . . . .82.31 . . . . . . . . . . .81.12
2004 – 3Q. . . . . . . .83.48 . . . . . . . . . . .81.19
2004 – 4Q. . . . . . . .84.02 . . . . . . . . . . .84.46
2005 - 1Q. . . . . . . .84.12 . . . . . . . . . . .84.38
The differences between these numbers has been provided by stockpiles set up for just such events (and the flow in and out of those stocks is given in the underlying table at the EIA site). And as a general rule it is in the 4th Quarter (4Q) that demand is highest, and against which stocks are built every year.
Thus in the first quarter of this year those responsible began to rebuilt the stocks, and took them to the highest level they have been. Why? Because the planners were anticipating that the 4th Quarter of this year will see an increase over oil demand from last year of perhaps 2 mbd and this is significantly more than can be immediately supplied. (In the old sandwich shop analogy you start making sandwiches early in the morning so that when the rush hour comes there will be enough to go round and people don't have to wait for them to be made).
The diversion of oil/gas/diesel into those stockpiles shows up as demand, but it is not immediate and is forward thinking on the part of the companies, even though filling that demand keeps the price higher now, it means that – if it has been done right, and we don't know that yet – the nations of the world will have enough fuel for this winter.
The second thing that must be born in mind is that some of the demand is going into the SPR. The American goal was to have this filled to a capacity of 700 million barrels by this August, and they bought to ensure that target. Which was met. There is now a goal of increasing this to 1,000 million barrels. Buying for that, obviously, is part of demand, so will be the purchases of the Chinese Government for their SPR, for which they have just completed the first stage of the storage facilities. Whether they buy now or later will have some additional effect on demand, the only question is when will they buy, and at what price.
Putting all these things together, this set of data by itself is not a huge worry, but exponential growth (which the video from Dr Albert Bartlett explained very well) is. But we may be about at the end of that period in our history.
In which regard, Michael Lynch has apparently suggested that there is no scientific background to justify the predictions of Colin Campbell, Jean Lahererre and others. Well to understand why there is a large scientific justification, you have to know a little more about oil reservoirs. Which is techie talk, but since we have now, almost, reached TD in that oilwell we're drilling on Saturdays, maybe we can start on that tomorrow.
Technorati Tags: peak oil, oil
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I noticed that demand (78.37) was significantly higher than supply (76.93) in 2002.
It did not trigger a price explosion at that time, why? different context?
Between 2000 and 2001 the price went from $30/bbl to just above $15/bbl (nominal) and then in 2002 it went back up to ~$25-30. So, there was a bit of a price increase. I would imagine that at $15/bbl there was some build up of reserves.
The whole "speculation" premium might not have been a problem either back then. What happened in 2002? I guess the US was just about to attack Iraq? Maybe we were "winning" the war on terror back then.
Re: "Michael Lynch has apparently suggested that there is no scientific background to justify the predictions of Colin Campbell, Jean Lahererre and others". Look at this Lynch paper titled The New Pessimism about Petroleum Resources: Debunking the Hubbert Model that I alluded to on another thread, just for those of you that like to plan ahead. (pdf, Adobe Acrobat required).
I'm just now reading through it, nothing to report yet.
Khebab: It may also have to do with the fact that in 2002 Opec was holding production off the market and the perception was that there was limitless oil waiting for the tap to turn. Demand was higher than supply, but far lower than "potential supply". Now supply is at capacity and if demand goes up, there may be nothing there to meet it.
Khebab, that's the problem I have with interpreting this data as "demand" and "supply". If you look at the fine print, what they call demand is actually oil consumed. The reason why oil consumed does not equal oil supplied in a period is because a small amount is constantly being stored or removed from storage. That's all that the difference between so-called supply and demand means in these charts, how much oil is being stored or withdrawn.
There is little reason to expect much impact on price due to these effects. The recent CNN chart reproduced on this blog was seriously misleading IMO, by juxtaposing an apparent supply-demand imbalance with an article about oil prices reaching new highs. It implied a connection that just isn't there (not least because the data being displayed was from six months ago!).
Halfin makes a good point. We need a graph that is more than just "supply" (or est. production) and demand (I suppose meaning something like refinery throughput). But also some idea of the levels of crude being stored and also of the est. untapped production. We need to know what the great majority of relevant variables are for each "side" of the equation to get a sense of how things are now compared to the past. Selective statistics easily mislead (wasn't this the thrust of an earlier thread this week?)
I believe some amount of the numbers are estimates anyway, yes. So, do we ever have any idea whether the estimation algorythms are hitting the mark for a given quarter or way off?
Maybe someone out in the blogosphere is already working on this...Any suggestions from the group?
Doh!!!
Clicking on the EIA link will take you to the spread sheet, where Supply, demand AND Stock draws and replenishment are each listed.
Here's an updated table:
Supply Demand Reported Draws
2001 77.73 77.67 -0.18
2002 76.93 78.37 0.23
2003 79.65 79.90 -0.48
2004 83.02 82.53 -0.36
Q1 2005 84.12 84.38 0.18
Definitions from the EIA spreadsheet (for Halfin and others):
Supply: includes production of crude oil (including lease condensate), natural gas plant liquids, other hydrogen and hydrocarbons for refinery feedstocks, refinery processing gain, alcohol, and liquids produced from coal and other soucres.
Demand: is used interchangeably with the terms Consumption and Petroleum Products Supplied.
Stock draws are positive numbers, stock additions are negative numbers.
and as I said over in the other thread:
Halfin: as someone who is a stickler for well operationalized terms, I couldn't agree with you more. It's bad semantically and conceptually, but that's a common error in the press, sadly. This is a simplification that lacks complexity and nuance, but that's how pictures and summaries work! This is the equivalent to the politician's soundbyte. Good for educating the masses who don't understand the ins and outs of oil supply and demand. It is powerful because it is brief and pretty in its own way.
So, I'll agree that demand is a really tough idea to measure, because, by definition, it's how much oil we would use if it was there, or how much oil we would use to maintain the status quo. You are correct that consumption will always be close to supply, because there's no more available to consume.
So, the more important, and perhaps more valid, question is: What happens when other developing countries want that oil and are willing to pay a premium for it to fuel their development or drive their growing economies? Does the first world standard of living go downward because prices go up because "demand" (maintenance of the status quo defn) is higher than supply? Does this imbalance mean that there will be more and more geopolitical wrangling over scarce resources? etc., etc.
The now-infamous CNN chart is just the latest example of confusion regarding "demand" and "supply".
To an economist, "demand" means "amount the market would be willing to consume at a given price", while "supply" is the flip side, "the amount the market is willing to produce at a given price".
The CNN chart was showing projections for consumption and production.
As for how to explain it, there's an easy enough way: The day before you leave on a car trip, you fill up your gas tank, making your demand for gasoline much higher than your consumption for that day. When you arrive at your destination the next day, which is about 0.8 gas tanks away, you've consumed a lot of gas but demanded none from the market. Countries do the same thing with crude oil and refined product stockpiles--they're our national gas tanks, and we fill and empty them on slightly different schedules that average out to the same rate over time.
You know, there's an obvious thing that's being overlooked here regarding the nebulous concept called "demand". This thing called "demand" is exactly that cost that people are able (not willing) to pay so they can sustain themselves economically day-to-day (business or personal) without incurring a loss and losing their ability to live. How does this relate to Lou's "amount the market would be willing to consume at a given price"? I think its the phrase "willing to consume" that I have a problem with. What the hell does that mean if you are talking about surviving or not surviving?
How about demand as the amount that "people can actually afford to pay for goods and services without going over the cliff"?
What the hell do economists think? The overwhelming majority of people are poor without means. Willing to pay? or Able to pay?
And here's a follow-up. I am not a Christian but I can tell you this -- I respect what Jesus said in his Sermon On The Mount about the poor and the meek inheriting the Earth -- he certainly was no economist. And why? Because he recognized, as so many do not, that the majority of mankind are poor and meek.
What does "willing to pay" look like in The Sudan or Niger or Bolivia or many other places I could mention? I suppose if we're talking about Oak Park, Illinois outside Chicago or the bedroom suburbs outside New York City in Connecticut, then all this economic theory is looking good. Over 3 billion people on this planet are living on less than $2/day and many of those have no access to potable water to drink. How do these happy economic theories apply there? Even here in the USA, the most "prosperous" nation on Earth, the disparity between the rich and the poor grows and grows year to year.
Suppose we are measuring GDP. Suppose we have a population of 100 people. 99 of those people have X number of dollars to live on. The other person has Y number of dollars to live on, where Y is much greater than X. Think about a Medieval Feudal economy here. We calculate a GDP figure. The next year, those 99 people still have X number of dollars to live on. But the other person, the Feudal Lord, now has Y + N number of dollars to live on. The GDP has grown! Last year it was X + Y. This year, its X + (Y+N). The economy is growing! Prosperity is on the rise!
So much for economics and GDP calculations.
Dave, your X,Y,N example is so ridiculous and devoid of any understanding of GDP and economics that it doesn't even deserve a response. However as an Econ major, I feel like I should really step up and defend the "dismal science," because the posters on this blog have virtually turned economics and free markets into piñatas and scape goats. Don't get me wrong I believe in peak oil and enjoy the wealth of technical info on this blog, but honestly it looks as if you guys were beaten up by big bad economist bullies when you were children.
The study of economics is the study of how a community provides for its unlimited wants given limited resources (thats right out of my macro-econ textbook). And no most sane economists do not believe in unlimited oil, coal, nat. gas etc.. as this would be a direct contradiction of the study of economics.
Anyway firstly GDP is the measure of the final market market value of all goods and services produced in a given period of time. It's not a measure of income as you were inferring in your example. Secondly how did Mr. Y gain N number of dollars? In order to create wealth Mr. Y would have had to produce something and that product would have to have been purchased at a profitable price by the X's. If the X's are being held down and given slave wages then they can't shell out enough money to make it profitable to produce the product. That means Mr. Y has no incentive to create a new good and therefore GDP remains stagnant!! As a matter of fact medieval feudal economies essentially operated on the idea that growth was bad because it would inevitably mean an increase in power and wealth for the masses. Medieval economies had stagnant GDP's. You guys often chastise economic growth, however stagnant GDP's mean production is spread more thinly among a population which generally grows. And you can't stop population growth unless you either find a way to restrain a human's natural impulse to pass on its genes, or you start killing elderly people who are beyond their productive years.
And market economics is not the reason for our perceived ill-preparedness for peak oil. First of all most world oil production comes from state-run companies, certainly not the most enduring symbol of free-market economics. Secondly, in order for free markets to work you need transparency and free exchange of information. Well obviously we do not have transparency in our current oil markets if we do not even know the exact amount of oil OPEC exports or even a solid estimate of their reserves. Under normal circumstances a consumer would demand transparency before purchasing a product on the market, however most Americans were content with just getting more oil. So previous administrations decided to cut political deals with the Saudi's so prices would remain artificially low and necessary market information was suppressed. This is a perfect example of how intrusive governments cutting special deals (not to mention the stupid consumers who could care less) can cause the collapse of a free market, which creates artificial price levels which do not accurately reflect the real situation on the ground. In many ways it's just another form of government price controls. It's only recently that information has seeped through the markets which has exposed some of the lies and manipulation of the OPEC producers and prior administrations and consequently prices are beginning to become more accurate representations.
I realize my post is really long so I'll just stop here. You guys do seem fairly open minded, so I hope that I can provide an econ perspective to the comments.
Dave: "Over 3 billion people on this planet are living on less than $2/day and many of those have no access to potable water to drink. How do these happy economic theories apply there?"
Well, let's see. Take some potable water there. Sell it at $20/liter. See how much you sell. Change your price to $2/liter. See how much you sell. Change your price to $.20/liter. See how much you sell. Change your price to $.02/liter. See how much you sell.
Plot your results on a graph.
There is your demand curve.
http://en.wikipedia.org/wiki/Demand_curve
"What the hell do economists think? The overwhelming majority of people are poor without means."
Part of the problem here, Dave, seems to be that math doesn't care, and you do. That's understandable, and you may not like it, but nevertheless if it comes down to a fight between you and math, the smart money's on math.
Mr Chris, your post proves again that economists cannot be accused of being succinct and clear.
Before you get all huffy about Mr Dave's post, put this in your pipe and smoke it:
"If the hard sciences are problematic, one wonders whether there is any rational reason to favor any conclusions drawn by the soft sciences. Consider economics. An economy is a complex system with multiple interlocking variables and a great range of natural variation, much like a human body. Because it isn't possible to change just one variable in an economy, nor to try an experiment twice by starting an identical society under new rules, economic analysis is really the equivalent of observational evidence (economic records) combined with plausible reasoning (an economic model). In medicine we have seen that observational evidence combined with plausible reasoning can lead to conclusions that are the exact opposite of truth." Steven Bratman, in Skeptic Magazine.
Wanna change your major yet?
Don't pick on the economists. Their tools are some of the best we have--which, unfortunately, shows just how limited is our understanding of such complex phenomena as economic behavior.
I think what some people resent is a common problem in the social sciences (and human psychology in general): that a model that originally is intended to describe human behavior becomes instead a means to proscribe human behavior--that a description of the way certain people of a certain class behave in their interests gets inflated into a general, immutable law about how the universe works.
I've found that humility goes a long way in matters such as this--something we might remember when we get too confident with our own predictions.
mikeB, good post ......
my elders use to say " Don't believe a damn thing you read or hear and only half of what you see, especially goverment reports." After fifty something years of reading, I always look at who is the author before adding salt.
"If the hard sciences are problematic, one wonders whether there is any rational reason to favor any conclusions drawn by the soft sciences. Consider economics. An economy is a complex system with multiple interlocking variables and a great range of natural variation, much like a human body. Because it isn't possible to change just one variable in an economy, nor to try an experiment twice by starting an identical society under new rules, economic analysis is really the equivalent of observational evidence (economic records) combined with plausible reasoning (an economic model). In medicine we have seen that observational evidence combined with plausible reasoning can lead to conclusions that are the exact opposite of truth." Steven Bratman, in Skeptic Magazine.
From where I sit, economists just try and understand (and sometimes predict) the market forces at work.
If you want to be angry, go figure out that while oil prices are at unprecedented levels, oil companies are making record profits. Then figure out how that applies to words like "necessary for survival"
In short, Exxon shareholders and executives are getting rich while some other people are charging gasoline on credit cards at 30% interest so they can get to work and somehow keep their mortgage.
Well.. if you want to know about demand and supply, just read the following. Here you'll see what the economic answer is to to balance demand and supply.
Even in 30 years time, oil demand and supply will still be in balance, just by the means of supply destruction:
Zimbabwe:
http://seattletimes.nwsource.com/html/nationworld/2002402146_zimbabwe26....
http://allafrica.com/stories/200507180671.html
http://www.iol.co.za/index.php?set_id=1&click_id=68&art_id=vn20050719102...
http://news.bbc.co.uk/2/hi/africa/4702585.stm
http://www.alertnet.org/thenews/newsdesk/IRIN/3bbbcfddf954c4c3c2e0c3b343...
http://www.reliefweb.int/rw/RWB.NSF/db900SID/VBOL-6E4GYV?OpenDocument
http://www.rednova.com/news/science/161642/zimbabwes_fuel_body_no_longer...
http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=42499&...
http://www.zwnews.com/issuefull.cfm?ArticleID=12215
Zambia:
http://allafrica.com/stories/200507280127.html
http://allafrica.com/stories/200507290138.html
Namibia:
http://allafrica.com/stories/200507280719.html
Sudan:
http://www.reliefweb.int/rw/RWB.NSF/db900SID/KKEE-6ERPJC?OpenDocument
Malaysia:
http://www.schaeffersresearch.com/commentary/news_detail_ap.aspx?click=h...
http://www.nst.com.my/Current_News/NST/Sunday/Frontpage/20050731073859/A...
http://www.aliran.com/monthly/2005a/4f.html
http://www.nst.com.my/Current_News/NST/Monday/National/20050801075843/Ar...
Sri Lanka:
http://www.colombopage.com/archive/July30205656UN.html
Thailand:
http://www.mb.com.ph/SCTY2005073140752.html
North-Korea:
http://www.alertnet.org/thenews/newsdesk/PEK278232.htm
http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=...
South-East Asia:
http://www.taipeitimes.com/News/editorials/archives/2005/07/26/2003265138
Indonesia:
http://www.planetark.com/dailynewsstory.cfm/newsid/31845/story.htm
http://news.bbc.co.uk/1/hi/business/4683335.stm
http://www.rednova.com/news/science/161545/indonesian_city_grinds_to_a_h...
http://www.nst.com.my/Current_News/NST/Saturday/Columns/20050716081245/A...
China:
http://news.xinhuanet.com/english/2005-08/01/content_3292858.htm
Hawai:
http://starbulletin.com/2005/07/31/news/story5.html
Yemen:
http://news.bbc.co.uk/1/hi/world/middle_east/4707145.stm
http://www.workers.org/2005/world/yemen-0804/
http://yementimes.com/article.shtml?i=862&p=front&a=2
Iraq:
http://www.finance24.com/articles/economy/display_article.asp?Nav=ns&lvl...
Nicaragua:
http://www.plenglish.com/article.asp?ID=%7B68FD48EE-CA90-4A87-ADE4-D1840...
That is: demand destruction ofcourse..
Would someone PLEASE explain to me why discussions on this board waste so much time debating whether economists are evil???
Economists are not the problem, people!
We should be focused on improving public policy and, at a fundamental level, working to improve public education about energy issues. Sitting around here flapping our gums at each other, particularly about such a ridiculous point as what "all" economists believe, does no one any good, and it just adds to the surplus of superfluous "peak oil porn" material on the 'net.
Arguing about economists is like debating whether civil engineers are good or evil as we watch a dam about to burst and flood a city. There are good engineers/economists and bad, but ultimately it's the actions society takes that determine how well we survive life's challenges.
Can we PLEASE move on to something more constructive?
"Under normal circumstances a consumer would demand transparency before purchasing a product on the market, however most Americans were content with just getting more oil."
This is not at all obvious, other than in an idealized model.
I think there are instances where physical or scientific knowledge gives one a better indication of future supply than, for instance, futures prices. I think the problem that some people have with economists is their unflagging belief in markets to resolve all problems most efficiently. Its funny how our society ingrains this idea into our heads - the evils and inefficency of gov't are the flip side - but the high preists of this religion are vilified by those who see its flaws.
I would also argue that modern day feudalism is destruction of the middle class while elevating some out of subsistance living (barely). Mr. Y gets richer and GDP goes up, but Mr. X in an idustrialized country has to go further into debt to maintain his standard of living.
Regarding the supply/demand numbers, economists would call this quantity demanded and quantity supplied. It seems to me a very useful number to compare to price is excess production and refining capacity, numbers which are probably harder to estimate.
To those who insist that numeracy, psycological manipulation, or detailed technical explanations are the key to determining whether or not we are boned and if so how badly we are boned, I offer the following germs of what some of us considered conventional wisdom not too many years ago.
"Statistics lie and I have the numbers to prove it."
Meaning, I think, that math is just another language that can be used to tell whopping lies.
"Salespeople learn less and less about more and more until finally they know almost nothing about almost everything. Engineers learn more and more about less and less until finally they know almost everything about almost nothing."
Suggesting that those who could make the public understand PO, would probably never understand it themselves and thus explain it wrong. Those who understand parts of it really well, would almost certainly bore the public and probably get other parts of it wrong.
So, if these be true, then I am inclined to think that we are probably rather seriously boned.
:o(
Those who understand parts of it really well, would almost certainly bore the public and probably get other parts of it wrong.
So, if these be true, then I am inclined to think that we are probably rather seriously boned.
is what scorned by the cockroach wrote at | 08.13.05 - 11:50 am |
We are not "boned".
We are "boning up".
Oil is a 3 letter word.
But it's complicated stuff.
It permeates our society in so many different ways that we are like fish swimming in the goo.
Oil affects and is affected by our politics, our understanding of science, our understanding of economics, etc. We need to bone up on our math, on our engineering, on our history, yes even on our understanding of economic theories ...
and we need to be able to communicate with others on a mathematical level, on a psychological level, on an economics level, etc. ... whatever it takes
New here...I have to say that all I can see is a bunch non-productive doomers who aren't making any effort to understand the current situation. Here's your chance to actually prove that peak oil is 'now and passed' and all you do is point fingers at eachother and the world, without actually making a point.
I'm happy the oildrum makes a good effort at exposing relevant information. I think it's unfortunate it attracts people who fail to use it.
Chris, thank you for your explanation.
I'm sure if we could dig out some more recent numbers about OPEC, we could come to the conclusion that their supply is dwindling. I don't think the war should have that much to do with rising oil prices. I think it could be the combination of supply issues and refinery problems that sparked the rise. Those two probably aren't unrelated.
I don't think it's profit hoarding either, because the government has been putting pressure on companies/countries and obviously the incentive to lower prices is there (being a competitive market.)
I don't think it's profit hoarding either, because the government has been putting pressure on companies/countries and obviously the incentive to lower prices is there (being a competitive market.)
Not competitive enough. Anybody here have a company that can compete with Exxon?
That's some kind of pressure!
linky
From the data available on the EIA website I computed the number of days of consumption equivalent to the stockpiles for the US which is a better way to analyse the current state of the oil stocks:
Year Stocks (mb) Consumption (mbpd) Days
1999 1492.931 19.519 76.48
2000 1467.547 19.701 74.49
2001 1586.349 19.649 80.73
2002 1547.910 19.761 78.33
2033 1568.303 20.034 78.28
2004 1644.805 20.731 79.34
I beliieve that the US inventories include the SPR. There is no obvious pattern in the number of days.
I have a question about something that was in the original post. The item states that there is a new goal to increase the SPR to 1,000 million barrels. I find that very interesting, but can't find that in a news item anywhere. Could you send me a link (or post a link) to where you learned that?
thanks
I doubt if anyone's still reading here, but here is my response:
Lou - economic theories have their limits, these are large, and I know that you know that. You also know that you and me are largely in agreement on peak oil issues.
Chris - as an "econ major", you have yet to understand anything that wasn't written in the textbooks that you study. In my example, through the use of slave labor (think Chinese or Indonesian sweatshops), the X people produce more goods and services owned by the Feudal Lord Y. Y then sells off these goods and services to others and reaps the profits. However, the X people make just the same amount of money they made last year. Y is richer, but the X people are the same and still poor. If you can't understand that I am talking about wealth inequality, then I feel sorry for you. But maybe when you're 30 years older, you'll understand what I mean. Something about "we were all created equal" comes to mind here. Is it a crime for poor people to make a living wage? or is that contrary to the pitiless mathematics of economic theory?
Thanks, Roger, for the links.
Anonymous: "Part of the problem here, Dave, seems to be that math doesn't care, and you do. That's understandable, and you may not like it, but nevertheless if it comes down to a fight between you and math, the smart money's on math". I think that when people in the US of A start falling by the wayside, as in the Great Depression, we will start to see a somewhat different view of how the wealth is distributed as the peak oil situation plays out.
Ben: "In short, Exxon shareholders and executives are getting rich while some other people are charging gasoline on credit cards at 30% interest so they can get to work and somehow keep their mortgage".
You bet, this is my point in a nutshell.
There is a power law function that governs many aspects of our lives. But the main point about it is that the "rich get richer and the poor stay the same". This applies to internet traffic and the distribution of the wealth in a society. Chris, if you don't know what a power law is, look it up.
And to many of you guys, don't always believe the bullshit that you read.