The new peak for October (all liquids) is based on the IEA data for which the front month is November, see Stuart post for an in depth discussion:

Does the latest IEA number matter?

The problem with the IEA is that they give only limited public data (only the three last months) and it's difficult to track revisions whereas the EIA can revise its monthly estimates up to three years.

The EIA Short Term Energy outlook (STEO) has also preliminary estimates for October and November:

October: 85.96 mbpd
November: 85.61 mbpd

That IEA (Monthly Oil Market Report) peak for November 2007 (86.55 mb/d) - in comparison to the July 2006 peak (86.13 mb/d)- has been created by:

(1) an extra 180 kb/d of processing gains - freshly added in the December 2007 monthly report
(2) an additional 310 kb/d (=460 kb/d - 150 kb/d) bio fuels

No, it's not seasonal, most of the increase (two thirds) is coming from OPEC (mainly Saudi Arabia and Iraq).

September 2007 estimate for crude oil + condensate is 73.50 mbpd compared to 73.47 mbpd one year ago and 73.92 mbpd two years ago.

This means that the ‘rest-of-world’ consumption must have dropped during these three and a half years, by the same amount.

So, does the 2006 EIA data show any evidence that demand by the largest users of oil is actually falling let alone keeping up with 1.8% growth per year required for BAU – who, if anybody, amongst top 15 consumers is being priced out of the market?

The 15 countries with the greatest demand consume ~60% of the world’s oil but ~80% of net exports.

In 2006 only 4 of the top 15 were growing consumption of oil – China, India, Germany and Singapore.

Of these 15 largest consumers only 4 import less than 90% of their needs – USA, China, India and Thailand – all the rest are very dependent on net exports. Total liquids net exports fell by -3.3% from 2005 to 2006.

According to Henry Groppe interviewed by David Strahan here:

http://globalpublicmedia.com/groppe_iea_oil_spike

the decrease in demand has come from industrial applications. He sees industrial uses dropping sufficiently over 2008-09 to maintain normal prices. Things will get interesting in 2010.

This would explain the price drop in late 2006 which did not correspond to any additional supply. The Chinese especially are using a lot of oil for industry. Of course, they are now substituting coal for oil which is not good news for GW and pollution levels.

There is still a lot of trucking that can be moved to rail and barge as well.

Good interview. I hope he is right.

Nate: My guess is that by 2011 we will be 6 years post peak and at that point the CERA types will have substantially changed their tunes. In the period 2008-2011 Jeff Rubin, Matt Simmons and a few other analysts will gain increasing credibility (IMO)-so by maybe 2011 the timing of peak global oil supply will be agreed to by almost all analysts. I have heard Matt Simmons credit the experts at TOD but most MSM analysts will just jump on board in the next few years (claiming that they knew how this would play out all along).

...can rhetoric, reputation and marketing really trump accurate forecasting in perpetuity?

As long as the rhetoric supports a desired market, rhetoric will trump. When the market changes, the rhetoric changes.

There are levels of investment and corporate decision-makers. IMO, those at the extreme top are very much aware of more accurate forecasts. What is said publically is different than what is said privately, however--and those at the top let others speak for them.

- can rhetoric, reputation and marketing really trump accurate forecasting in perpetuity?

Yes, it most certainly can, and does! I have been banging the drum to some of the people I know who invest in energy to cough up some funding for ASPO and TOD because their forecasts are obviously far better than the utter hooey being peddled by the official agencies and "respected" prognosticators such as CERA...to little effect. Most of them can't even understand the difference, or see the need for funding for the former. Even after I explain it, they sort of shrug and say oh well, that just means there is an investing advantage for those few who pay attention to the ASPO/TOD/etc. analysts.

Some day soon I hope to create a subscription service that will give the better analysts on the scene a proper platform, and proper compensation, for their excellent work, and change all that. Nothing would make me happier than cutting checks to the TOD brain trust.

I think the problem is mainly human habit. People will believe those they know personally, and those who bear some official stamp of approval, before they'll believe some unknowns in the blogger community, even if the latter's work is better. Why? Because they're too lazy to really get their heads around it and see the difference for themselves, so they rely on the familiar and the official. I have heard some amazingly ignorant perspectives on energy and peak oil from the mouths of otherwise educated, aware and wealthy individuals, which were based entirely on something some trusted friend of theirs said to them....and they are remarkably resistant to information that doesn't conform to their existing worldview.

You can lead a man to information, but you can't make him think.

But for those of us who like to think, Khebab's work (and that of the unpaid, unbiased analysts he covers) is a priceless gift, one for which I am eternally grateful.

Nate asks,
"how long will it take for the investing and corporate decisionmakers to see that 'free' analysis by the 'peak oilers' listed by Khebab above have been dramatically more accurate than the (very) high priced forecasts of CERA and the increasingly marginalized IEA/EIA forecasts?"

Well, if someone does decide to charge a fee, I would suggest that they not use the type of chart as the one labeled above:
Fig 5.- Forecasts by PeakOilers based on bottom-up methodologies. Click to Enlarge.

There are so many scenarios there that one of them has to be right! :-)
Either peak yesteryear, peak within a matter of two years, or any interval on out to past 2030, depending on how you read it.

I am often astounded that CERA can get the kind of money they do for peddling what is essentially rumor and glossed up news that is available everywhere.

CERA knows about as much as the rest of us about oil reserves and when pontential "bumpy plateau" or what some call peak will occur, that is to say, essentially nothing.

They are just better at selling it.

Very interesting is a chart like the one above labeled:
"Fig 1.- World production (EIA data). Blue lines and pentagrams are indicating monthly maximum. Monthly data for CO from the EIA. Annual data for NGPL and Other Liquids from 1980 to 2001 have been upsampled to get monthly estimates. Click to Enlarge."

Note that if we go backward, we see at least 4 or 5 "bumpy plateaus" at least as noticable in retrospect as the one we are seeing now, which is so marginal as to be essentially "measurement error". The truly legendary "psuedo peak" was in the late 1970's to early 1980's of course. What is interesting to me is that at the time of these flat production periods in prior years, no one noticed!

The age of second by second watching of oil production, like the age of second by second watching of and investing in stocks, futures and commodities is a very recent thing. In the old days, oil production could go up or down, and no one knew it anyway unless an emergency occured.
And very few true emergencies ever did...oil production seems to be a process a bit like making sausage (or laws as a well known pundit once said)....best not watched if you want to enjoy the finished product!

There is another way to look at this....just as some historians now see the two world wars of the 20th century as essentially one war with a lull between them, it is possible to take the long view of peak and view it as one continuing emergency that began in the 1970's, and lulled in the 1980's through early 1990's, and then returned to emergency status at the turn of the new century. Kunstler's "Long Emergency", but much longer than even most peakers realize. The question then becomes, exactly how long of a game are we playing here? If the long emergency last for another several decades as it has for the last three, many boomers wouldn't care, because death would remove them from the scene and their offspring would have to deal with it. Sounds cold, but it's true.

we would now ask what caused the lull in the long emergency of the 1980's/90's?
The North Sea may have provided a false sense of security as did the abnormally low consumption situation created by legacy conservation from the 1970's (I know people who still swear by late 1970's/early 1980's houses as the best for being insulated, warm and cozy, and the cars were small and compact in weight for several years before the SUV boom!).

The other factor that is often forgotten is the collapse of the U.S.S.R. In one of his presentations, Matt Simmons mentions that factor as delaying the consequences foreseen in "The Limits Of Growth" by The Club of Rome, and thus undermining the credibility of the "limits" movement.

Needless to say, the above view only creates more confusion (as if such a thing were possible!), because it stretches out the time period that must (or should) be analyzed carefully. That is to say, it may be one minute to midnight, but we can't see the clock, and don't know when the clock started running. We could be very early in a long game, very late in a short game or any combination of the above.

Given the confusion, we are back to square one: All one can do is hedge, and not the modern "hedge fund" type of hedge, but real hedging, i.e., diversify, search for non oil based alternatives and renewables, and stategic storage to mitigate short term instability. "Case harden" the culture as insurance, and otherwise, try to avoid disrupting the stability of the culture. In a nation of aging people who really have few alternatives anyway, creating panic could accelerate catastrophe faster than the system could have otherwise adapted to it.

As much as I would wish that someone would pay the TOD volunteers for their excellent study of the oil and energy situation, and for their reasoned and sober advice, no one will pay me for mine! :-)
Looks like it's a labor of love for all of us... :-)

RC

Dear Nate,

The questions you raise are profound, and the answers are very complex and go right to the heart of our modern culture.

A simple answer is that we have all become consumers roaming a vast, global, market-place, rather than active citizens participating in a functioning democracy. Actually, that isn't a particularly simple answer, and requires a lot of qualification, only I'm off to a party soon, where I have promissed not to utter the PO word!

But I suppose my analysis applies more to the general public, rather than the 'elites' who should know better and more, because better and more knowledge should translate into power and money at some stage.

I've found that 'intelligence' and the ability to understand and use knowledge are pretty much evenly distributed among societies various social groups. Access to elite positions in most societies is not based on intellectual ability, that is we don't live in a meritocracy; but is actually based on social class, and classes tend, for the most part, to recruit members almost exclusively from their own class. This narrows there cultural perspective considerably. For example, one can examine the way people are recruited to positions of power and influence in the City of London. It almost resembles a 'caste' based system, and even those lucky few who don't come from the right families are forced by the selection process to exhibit and internalize the values of the ruling elite. But enough of that.

Dissident or heretical views are rarely greeted with smiles by people in power, especially if these views clash with the interests of power elite, even if it's in their objective interests to examine and reform the system they control and benefit from.

Historical parallels to our current situation are myriad and not particularly positive. Why didn't the French aristocracy react and institute reforms before the Revolution in 1789? Why didn't Spain choose to become a modern state, instead of decline and humiliation? Sliding from the world's most powerful and richest empire into a backwater lasting two hundred years? The same question could be asked about China. Why didn't China choose to change, rather than allow foreigners to virtually take the country over and 'colonize' it?

These are vast questions, controversial, with many potential answers.

The short answer is Power, not education, or knowledge, or democracy; but Power. Who has it, and who does not. It wasn't as if the Chinese didn't know what reforms had to be introduced in order to defend the country against foreign intervention, however, the vital and necessary reforms also threatened the power and status of the old ruling-class who because of their priviligded position in society were protected from the worst consequences of foreign intervention and competition. They opposed reforms, reforms that threatended the established social order, even if objectively and paradoxically, reforms and modernization was probably the only chance they had of maintaining any semblance of the old order. Through 'class enertia' they chose to go down with the ship they knew, rather than change course and risk losing power and control.

After all this history, one can't help but wonder if the American ruling-class will prove to be just as narrow-minded and inflexible, and unwilling to institute profound, structural change, as the ruling elites in China and Spain?

It is often my experience that unadulterated research (ie research for the sake of research) is often the most accurate. Once an outside source throws money at you, your research becomes a 'vested interest' and is, therefore, subject to manipulation based on interest bias.

"can rhetoric, reputation and marketing really trump accurate forecasting in perpetuity?"

the NAR is certainly trying on the housing side. my guess is that the general public is just not listening to CERA and therefore doesn't remember it's been wrong.

"can rhetoric, reputation and marketing really trump accurate forecasting in perpetuity?"

Yes! I have watched it go on for decades.

It only ended because the individual in question retired. Now that they are gone, it is starting to leak out why it went on. Basically, upper management didn't understand the subject and did care about the problems being caused. The problem didn't affect their paychecks so they just said "screw it".

Forget the general public for the time being - how long will it take for the investing and corporate decisionmakers to see that 'free' analysis by the 'peak oilers' listed by Khebab above have been dramatically more accurate than the (very) high priced forecasts of CERA and the increasingly marginalized IEA/EIA forecasts?

Too long. ;(

If the IEA and EIA are on the money with a Peak in 2030 (stop giggling, you lot in the back row! ;) ) we need to get started right now if we're to have any chance of maintaining our current way of life and avoid the usual unpleasantness associated with resource collapses (I personally would like to keep the Rule of Law intact and functioning, even if I don't have a job. I could always get a job with the cops, as they'll have plenty to do ;) )

If some of the more pessimistic models are correct, we're already as much as fourteen years behind the 8-ball (if you assume we should have started the transition ten years before peak), and at best, 'only' seven. In which case, we're stuffed, and we'd better start re-learning how to garden in our backyards, buy a bicycle, stop being Good Consumers, and start making our own strategies for 'survival' (I own some land close to tranport and town hubs, my Girlfriend and her family are buying land out Bush, so we've got Options right off the bat).

can rhetoric, reputation and marketing really trump accurate forecasting in perpetuity?

Of course. Consultants are hired to agree with management, not accurately predict the future.

How to explain peak oil to the general public in terms they understand in as few words as possible:

$25 a gallon gas by 2020

Assumptions: If liquid production remains steady until 2010 we can expect at least a 10% increase in price, which is what we have seen over the last two years. If liquid production starts dropping 2% a year after that the annual price increase will double to 20% at least. These are conservative assumptions.

The idea that gas could reach $25 a gallon in the next decade just boggles the mind, especially since most of us remember less than $1 gas.

Sometimes I think the best thing to do is forget about it.
I'm 65 years old. When TSHTF I'll probably be dead. Why waste time thinking about a problem most aren't interested in and which few can do much about. But then it's so fascinating I can not resist.

Interesting Q of why we in the US are oblivious of the peak oil situation.

Might be that it takes a long time for things to sink in, especially when matters are rather complicated. Many people watch Matt Simmons being interviewed on CBNBC and think, "Well, how about electric cars? What about all the new oil finds? Brazil, Alaska, Chevron Jack, the Caspian, Canadian tar sands? What about solar, ethanol, wind, geothermal? What about fusion or even antimatter? And what about the fact that people waste so much energy, now, and could cut back painlessly?"

It might take awhile for the harsher realities to become incontestible. It might take $15 gasoline for people to really feel the seriousness of this, at which point, we might be well past peak.

Meanwhile, elites in the US might not want to create an acute public awareness of the oil problem while the US is trying to consolidate whatever hold it has on existing world supplies. Think Iraq.... And consider that Qatar has more natural gas reserves than the US, Canada, and Mexico combined.

And that Iran has amounts similar to Qatar's. You see why the US feels it has to stay in Iraq. And that even if Hilary or Obama becomes president, he or she too will go along with the program. (I doubt that the ruling elites in the US would allow any president to abandon Iraq. )

Well, that's my take on it. It's hard to know what's really going on. But there might be a political aspect to this well as technical considerations.

I always say it's the combination of production declining with prices rising. If the prices were falling, that would explain the production cuts.

That's rather a bad angle to use to explain PO to people. Reminds me of the endless arguments over GW, how this year was warmer than ever before and so on. It's an indicator that something extraoridinary is happening, and with enough statistics a propability for it can be calculated. But this is not very convincing in the end.

Much better approach is to explain why PO is happening. Explain how oil is produced, what the limits and bottlenecks are. Explain how oil is consumed and how dependent we are of it. To illustrate your points, tell of histories of particular oil field depletions and countries peaking.

When people 'get' the idea why oil is peaking, that PO is 'real', that it is inevitable, then you can start to discuss specific statistic indicators on how PO is currently proceeding. Otherwise you're just surrendering the argument over to the endless tit-for-tat anecdote game that GW discussion was stuck on for years.

I think this is an interesting point. How unusual is the current plateau from a historical standpoint, when one takes a variety of other factors into consideration? Have we ever seen a plateau/decline this long in a climate of increasing demand, global expansion and increasing price? Or is the current era unique?

The current plateau is not the longest, 1990-1996 was the longest but prices were around $20 at that time. Today prices are near record high as well as rig counts. However, oil inventories are still in the upper range. If inventories drop significantly and OPEC does not increase production that could be a sign that we have in fact reach peak production. The trick is that we are observing only oil production (which is following closely oil consumption) and not production capacity. Peak oil means that peak production capacity has been reached (i.e. no spare capacity).

Post of Day (or Week)
Good luck in Mankato..

Hi Fred,

Yes, good luck. And I hope you'll write up your progress for the "TOD: Local", so we can hear about it (and learn something).

Randall: Thanks for putting that out there. I was remiss in not doing so myself. ASPO is as worthy a destination for donation as any.

TOD is not affiliated with ASPO but both are working toward the same goal

Theoildrum and ASPO are indeed both trying to raise Peak Oil awareness, but our models are distinctly different. While ASPO USA focuses on yearly conferences, theoildrum runs a website, building and expanding on data and analysis on the myriad areas impacting our energy situation. We have (somehow) convened a group of volunteers that are highly motivated by the search for the truth, but also motivated to share this knowledge with the greater community. Ive met or talked to almost everyone involved and must say this is a special - un-political (relatively) community - 25 bright, civically minded, hard working (and often funny) individuals.

Of course, its natural, given the small group ancestral environment we 'grew up' in, for all humans to endeavor to move up the 'tribal ladder' depending on cultural circumstances. This has been a successful modus operandi for a very very long time. Peak Oil, for people that have connected the dots, is the next 'ladder' that will change the ordering of rungs on the conventional 'money as power', paradigm. Why should it be any different in this respect than the switch from horses to cars, or the move to 'plastics'?

None of us has been paid a single penny, but in truth, this site requires a great deal of resources as well, because as unique as TOD is, it functions in the current system, and money makes things run smoother. A particular group of us (not myself) have contributed what equates to a weekly full time job on this site, for no pay, other than the renumeration of knowing we are helping individuals and communities that have open eyes and ears better prepare for the future. Our own research and ideas have been augmented and improved by the community that has become TOD - thats kind of the idea.

When the USA started to offer money for people to give blood, volunteer blood donations dropped precipitously. Similarly, if we became a 'for pay' analytical site, I think the grass roots spirit, enthusiasm and effort of our contributors would similarly fall. I could be wrong...Yet, as far as resources go, we too live in the real world where people have to pay for electricity, computers, food and rent, so I am sure there are limits to the altruism of our band of merry men (plus 3 women...;).

This is a special place, which is why I am still here. There is no model like this, and despite what my mother says, I can't imagine a better way to spend my time, on this planet, circa 2007. Some days are better than others, and alot of really high quality stuff falls down the rabbit hole, but theoildrum.com has an aura of 'pricelessness' about it. We have specifically chosen not to go the route of treehugger.com. (once that site was owned by large corporation, the momentum and readership both declined, though they still have decent content). The founders of the site have so far taken the higher ground and not publicly asked for donations, mostly out of a wish to keep things simple but also partially, because the viral success of an empirical energy/environment/social discussion site that has continued to grow is worthy in itself. I'm excited and hopeful to see what the next iteration will bring

Think about it. We are changing from an energy rich era, to at minimum, an era where energy is dear. This will alter the growth assumptions underpinning our social systems. What better place to set an example of social altruism, collectively sharing knowledge and ideas with peers, and sussing out the truth, than on a free internet site with no political agenda? For free, we've had a better overall call on the oil situation, oil prices, and related peripheral events, than any wall street firm Im aware of. Hedge funds have banked fat profits from the analysis of Stuart, Robert, Khebab, Euan and others. This is an expected externality of the tragedy of the theoildrum commons - with free information, some will use it to change their views of the world and thus change the world itself, while others will use it to profit from the current paradigm.

I wish ASPO well in its continued efforts to bring the message of Peak Oil to the mainstream. ASPO has had some great conferences, which serve, among other things, as a networking/bonding opportunity within the Peak Oil community. I had a GREAT time at the ASPO Ireland conference (many countries have their own ASPO branches). It sad in a way that in order to do the right thing, and change minds, that we have to play by the rules of the current system, which requires money, (and in the case of political candidates, a LOT of money)..

Sorry for this long reply - I speak only for myself and not for the rest of TOD staff.

I agree with all the comments about TOD - absolutely a top class site with a group of volunteers that are second to none. I spend a lot of time at TOD because the articles and posts are a higher quality than I've found anywhere else.

That being said, ASPO has an equally dedicated and high quality group of volunteers. The high quality work that ASPO does does not come through on the web as it does with TOD. IT does come through at the ASPO conference. Their credibility is growing as they have been asked to provide input to some state legislatures and other institutions about Peak Oil.

AS an attendee and volunteer at the Houston ASPO conference, I can attest to what a great job the ASPO organizers did. A very big point here is that to put on a conference like this, there are huge up front commitments of (I'm guessing) at least $50,000 required to reserve the hotel conference rooms, bus services for the tours (this year there were tours to a drillng rig and a refinery), etc. This all comes out of somebody's personal pocket with no guarantee of payback. Hence the need to have some financial cushion.

As Peak Oil gets bigger recognition in the MSM, it would make sense that there be some kind of organized body to help towns and states become informed about this. Hence the need for a staffer or two.

Again, TOD is doing a fantastic job, and I don't mean to take away anything from that. ASPO is just doing a different aspect of the same job, and it unfortunately would be greatly helped if it had a bit of funding cushion. I have no vested interest in promoting this; I will be donating to ASPO, and am a great believer and promoter of both ASPO and TOD. (I have probably suggested to 50 people in the last year, personally or by email, that they ought to visit TOD.)

If anyone of the volunteer staff of ASPO reads this, perhaps they could add a comment.