Hello,

Short answer to the question above is that I expect that the 3 countries in question presently have around 2 Mb/d of spare marketable crude oil capacity.

EIA STEO for November 2010 estimates that KSA, Kuwait and UAE have a total of 4,42 Mb/d of surplus crude oil capacities as of 3rd quarter 2010.

The present crude oil price also suggests to me that surplus capacities are smaller than what EIA and IEA estimates.

In my post OPEC’s Spare Crude Oil Capacity - Will it disappear by the end of 2011? I tried to build a case on how OPEC oil supplies responded to the run up in oil prices to around $147/Bbl may have give a lead on how much spare capacities they have now, relative to what OPEC delivered in the summer of 2008.

This OPEC "high" happened while some of the world’s leaders travelled to Saudi Arabia and asked for increased oil supplies and IIRC President Bush also asked KSA to increase oil supplies which led him to state that it was hard to ask anyone to increase their supplies if they had a hard time doing so (or something to that effect).

During the summer of 2008 KSA, Kuwait and UAE sustained (that is a supply that can be brought in within 30 days and maintained for 90 days or more) a high crude oil supply of 14,65 Mb/d.

According to EIA data these 3 countries had a total supply of 13,10 Mb/d during August 2010.

Using the sustained capacity of the summer 2008 as a reference, these 3 countries presently ought to have around 1,5 Mb/d of marketable spare capacities. Then it should be expected that some capacity has been subject to declines due to depletion and some capacities has been added (especially in KSA, but I am not aware of the phasing/status of this capacity.)

What do you think the spare capacity of Saudi Arabia, Kuwait and UAE is at the moment?

These three countries are producing about 1,700,000 barrels per day less than they were during the summer of 2008. They were all three producing flat out then. Since then Khurais that added to their production capacity and just over two years of decline to subtract from it. An educated guess would put their spare production capacity at around 1.5 million barrels per day but it could be anywhere between 1 and 2 million barrels per day. But that spare capacity is dropping fast and will be largely gone by the end of 211 at the earliest and by the end of 2012 at the latest.

Just my two cents worth.

Ron P.

goghgoner,

I have in the pipeline a post which shows that as of 1st half of 2010 U.S. GDP exclusive of energy expenditures does not grow at an oil price (Brent spot) of $80-85/Bbl. In other words at an oil price of $80-85/Bbl growth in U.S. GDP was caused by growing energy expenditures.

What I have defined as energy expenditures are expenditures on gasoline, diesel, kerosene etc, non energy use of petroleum products (petrochemical feedstock, asphalt, coke etc.), natural gas and electricity (which covers coal, nuclear, hydro, some natural gas and renewables). Non energy use of petroleum adds to the demand for crude oil (petroleum products in general).

Rocky - very interesting...thanks. You also highlight the difficulty with trying to use EROEI or any similar metric: The system doesn't work in this realm. It works like all other enterprises: dollars in/dollars out. There is a rough correlation between the two but, in the end, I've yet to see a single decision based on any factor other than monetary value. EROEI calculations are an interesting academic exercse and do offer some insights. But the process you describe with the Canadian tar sands is a good example: it's a process that goes forward due to the monetary gain by Canada companies. Thus it's a combination of US and Canadian priorities. And so far US priorities appear unchanged: let others generate our energy needs and assign whatever burdens that entails to them. Works for us obviously. LOL. If at some time Canada has to start paying for it's generation of GHG than it will need to find a way to tack it on to it's oil sales.

Excellent counter example to wasted energy and money. In a lot of ways as you point out Canada is using its money wisely creating real wealth. I know I don't define wealth.
I leave it a bit nebulous but its basically paid off infrastructure and fully funded recurring expenses. Debt leverage is not used to support the standard of living today.
Debt for creating new wealth is obviously different thus I use the loose term wealth. Obviously the Canadians generally have created a real baseline of wealth from oil.

It has its problems I work a lot in Montreal and eastern Canada used to be a much wealthier place than it is today. Canada for obvious financial reasons chooses to send its oil wealth south. However its eastern provinces have not benefited from value add wealth creation off the oil. Of course there are political forces at play but my point is only about how the energy flowed its not optimum for Canada over the long term. Assuming Canada sent its oil east internally the rate at which it could be converted to value add products would have been much lower and perhaps the rate at which the standard of living improved lower.

Perhaps the real problem is I see that a high standard of living for people is a finite goal. You would want some sort of decent living structure, electricity, water, food entertainment access to transportation education etc. Basically what we consider middle class in the general sense but closer perhaps to a European lifestyle than US.
You can certainly have a middle class lifestyle without driving a SUV or living in Suburbia is what I'm trying to say. Its not a hard concept but its reasonably well defined.

The nations goals would be to ensure some sort of baseline quality of life for its citizens for as long as possible. Overtime it would seem obvious that this would require increasing use of renewable resources. Renewables would be used to simply ensure that the government met its real mandate other benefits are secondary.
Nuclear energy despite its problems meets the mandate for example. Fossil fuels are not bad simply they would need to be used in such a way that in time they could be phased out.

On top of this then nation should manage its population the citizens must also collectively hold up their side of the problem by keeping their breeding/immigration rates low enough to allow the nation to build its wealth and maintain its standards without falling into exploiting of resources in a way that leads to a dependency that cannot be replaced.

In the end the concept is probably very simple the Nations job is to ensure that substitution remains viable in all aspects of the economy. Its really basic economics when substitution fails the economy will eventually fail. The governments job would often be to level the playing field if you will to ensure viable alternatives. For non-renewables this means front loading the eventual cost of replacement forward in time and using the money to ensure that alternatives have enough market share to take over later on.

What this suggests is that viable substitution is the central economic theorem. Without it a economic system eventually fails.

Also obviously I don't think you can depend on market forces or money to ensure that substitution remains viable simply because infrastructure may not be replaceable when a non renewable resource begins to fail. A simple example is of course Easter Island which used its trees in a non-renewable manner.

A economy does not or more correctly is incapable of ensuring that its flexible enough to adopt substitutes when short term market demand comes into existence for them.
This is the fatal flaw of our current economic models. We believe in general that we are flexible enough to change only when its profitable to do so.

The difference between these two viewpoints is the mal-investment which I claim creates zero real wealth. The US of course is and easy target :)

Canada is much much better but you can see it is not perfect and has squandered a substantial amount of its intrinsic wealth leaving its future uncertain.

Indeed for Canada at least the real problem is very similar to what we face with Mexico, by subsidizing America's unsustainable economy all three nations face the collapse of a neighbor over a long border. Mexico by catering to our oil and drug trades and Canada by feeding our oil and other resource addictions have created a monster that will probably lead to the eventual destruction of Canada.

And finally you see the big mistake the US with Mexico and thence Canada with the US. In the case of Mexico the nature of the Drug/Oil trade has resulted in Mexico collapsing first but order is not so important all three countries are now locked in a death spiral from catering to American addictions.

Just as obvious I hope is the fact that a Government dedicated to ensuring a long term sustainable standard of living also must ensure that its trading partners esp the ones it shares borders are also along the same path. It cannot be only a internal policy but also effects international trade.

I will say kudo's for trying to do the right thing I wish you guys had tried harder perhaps you could have forced the US to change if you had really thought through the problem. Indeed Canada still has a chance you can always do the right thing in your case I'd suggest simply shutting down your heavy oil operations yesterday.
Stop the madness.

Later decide if you wish to exploit them or not and if so keep the damned oil in Canada don't sell it to us we don't need it.

So even at this late date Canada could break this cycle of addiction for the long term good if its willing.

Yeah its a bit funny really to realize that we are the first of a series. However if you think about it a bit we have a enormous amount of waste in our society most of it infrastructure. And of course population collapse from disease and ware is entirely possible. On the opposite side the fields we have blanketed with buildings are still there the land exists. It can eventually return to fertility in many cases. Our dumps and decayed building will become the new mines of the future. Assuming suburbia collapses there is a near infinite amount of metals that are reasonably well concentrated available. Same for our cities. For the most part the coal is still ample.
Nuclear, Hydro and solar could readily power a echo civilization. Assuming they again allow rampant population growth they will again hit constraints.
For them continued climate change left over from our civilization coupled with unconstrained population growth is likely to lead to collapse at a much lower level of excess than we achieved. One can even suspect that regional nuclear war would be more likely as nuclear power would be critical to such a society but large super powers impossible to create because of other constraints.

Regionally smaller totalitarian states massacring people and periodically nuking each other is in my opinion the most likely outcome nuclear accidents will also play a role. This will make whole regions unfit for human habitation not that people won't inhabit them but the diseases resulting from the radioactive fallout coupled with biological plagues will keep population low in these wastelands. In time of course the radioactivity will decay and the ecosystem will recover. Chernobyl if you will on a larger scale.

Variants are of course possible but I'd say that the next civilization will be one based on the collapse of attempts to use technology to bypass the natural constraints of our planet.

The third one is perhaps to distant to see but in its case I'd argue that its rise and fall would be based on exploiting of regions that where rendered unfit for human habitation on a large scale by a combination of nuclear/biological war and climate change during the previous civilization. These regions would finally be recolonized and exploited again to the point of collapse.

This time around I'd suspect by a more balanced society but one still incapable of living within its constraints. I'd also expect such a civilization would be more adept at biological warfare than the previous one. For this civilization I foresee a situation very close to what happened in America where disease was leveraged to empty the land. The only real difference is it would be designer germ warfare instead of natural vectors.

Finally after this we probably have introduced all kinds of new diseases making it difficult for lower technology survival. Staying alive in a world with all kinds of designer plagues targeted at killing people would be hard. This of course would lead to isolation of the various populations allowing these warfare vectors to die out over time and also I suspect finally resulting in people simply dropping them. I'd suggest that at this point humanity could potentially go extinct. We could well not make it through such a bottle neck. However biological warfare generally requires a certain population density and transmission rate. All plagues tend to naturally die out.

It probably will result in people fundamentally scared of ever living in a dense manner. Survival of the species would require a return to villages and smaller towns out of necessity. As this happens biological warfare becomes increasingly less useful both in the basic ability to mount it and in the ability to achieve its goals.

Time of course will eventually allow us to rid ourselves of the direct vectors however the knowledge of how to wage biological warfare just like nuclear war would still exist. This knowledge will intrinsically constrain the societies of that period to keep population density low to ensure that no one is again tempted to lose a plague to expand.

Only then once we finally disperse our population and also keep the density low enough to ensure that we cannot murder each other on a large scale will we finally at last follow a sustainable lifestyle. Not out of choice but simply because anything close to what we do today could easily be destroyed using the now extensive scientific knowledge developed to kill any large concentration of humans.

Out of necessity just like WWII resulted in dramatic expansion of physics in general the bio-war period will result in a dramatic expansion of potentially peaceful use of our expanded understanding of biology. And of course to repeat a natural stalemate preventing people from concentrating to the point they can overpower their neighbors.

And finally we reach the point that humanity has little choice but to abandon its desire to exploit and conquer and kill ourselves. A living human would actually be considered of some value and our ability to destroy our ecosystems finally curtailed. All the past periods of exploitation would ensure that gains from going down the exploit route would be minimal at best.

Surprisingly after all this is over knowledge from developing closed ecosystems to survive the various plagues and other advances will have actually prepared us to easily live for real in space.

Not exactly the best road to get to the end game but my point is regardless of what we do unless we actually manage to exterminate our selves in the process we will eventually end up having no choice but to follow the only viable long term path.

All I wonder really is if we will decide to stop at some point and not go down this road and instead actually take the alternative up early.
I doubt it but somehow I can't give up hope that we might simply leap forward. I think we intrinsically have the ability to reject scenarios similar to the above.

I think our planet would be better if we decided to grow up on our own and not take the hard road. As a species I'd argue foregoing the several rounds of genocide we will face would result in far less scarring of the cultural memory. The misery that we would have inflicted on ourselves and future generations would never happen and never enter the mass psyche if you will that scares our society today from previous periods of genocide. We would literally be a much happier species in the long run.

We as a species have no choice but to eventually suffer from the current round of exploitation and collapse its too late to change that but we could if we wish choose to make the first one the last one. The scar will be there indeed the climate will serve as a reminder for generations to come. But perhaps just perhaps we are intrinsically smart enough to recognize whats really going on and make the first collapse the last one.

In the long run I have a lot of confidence that eventually we will do the right thing and somehow I simply not capable of giving up hope that the long run might well be very short we are capable of fairly sudden and fundamental shifts to the better. Despite all of our faults one thing we have done is enter into the historical record a period of time when outright slavery was not practiced on a wide scale and individual humanity was at least conceptually important.

Yes we messed up a lot of stuff but future generations won't forget that there was once a time when humanity lived without slavery and misery they would recognize that the period was fake in the sense that the foundation was unsustainable but the result will remain indeed I suspect future generations will exaggerate the real level of wealth and freedom we obtained. Regardless the concept of equality is well rooted in my opinion and humanity won't forget it. Indeed as I said they probably will exaggerate it.

If we accomplished nothing else we at least did this and it is a good thing. The concept of freedom in the original sense that America created will live long after us.
And yes its really for all its warts and American concept not just the US but all of America north and south. At one point in history people really did throw of the chains that bound them and at least briefly lived in a conceptually equal future. Future generations regardless of what happens will not forget this lesson.
The meme will survive and depending on how things go perhaps one day finally be true in practice.

Given my general doomer outlook I'm not actually that sad simply sad for the billions that will probably live and die a life of misery before we finally change.
Indeed it could well be me and my immediate family thats thrown into a miserable lifestyle. If I did not think that its possible at any point in time for humanity to alter course and in a few generations adopt a stable lifestyle then I'd give up all hope. However I do believe that the possibility will always exist for my Grandchildren to live a better life than my children and if not them then their children. At any point our own children could well be the generation that experiences the maximum hardship level for our species with their children finally and fundamentally living a lasting better life. Something I could well live long enough to see with my own eyes. Many other generations in the past have seen real bottoms take place and rises sure the underpinning where not sustainable but the bottom of despair passed. We can never know for sure if its the last one our not even if initially its not quite on the right course a correction is possible.

Heck back in the 1970's the world almost made the right choice regarding oil we came close to it. We could have corrected and changed course. That possibility is real and will be real from now on out regardless of the meta level speculation. It does not mean things won't get extremely painful for a while but it does mean that at any point from now on out wherever we bottom out its our choice to make it the last one and of course eventually obviously nature will make the choice for us.

Heck maybe sometime in the future my way of thinking won't be considered something bordering on the lunatic fringe but mainstream that would be a start.
I suspect that overtime this is what will happen technology silver bullets will be rejected short term exploitation etc. The multi-generational view will become the center since we have no choice but to do so.

And Don the chances of you actually receiving your retirement in real value is zero as I think you realize. Your a smart man and sounds like you have kept up good relationships with your children I'm sure its crossed your mind that you may well end up dependent on them. I have children and I'm also hoping like hell I do a good enough job raising them that when my own time comes they will be willing to take care of me. For my generation at least our children will again be our retirement no choice in the matter. You almost certainly won't get your full retirement I'm practically certain to get none of mine.

And just to finish this makes life interesting for people that chose not to have children because of the current overpopulation. Many having made the right choice for now may well find out that they screwed themselves for our coming future. The irony is not lost on me. Indeed the poor families with 5-6 kids could well be the ones that make it out the best over the next few decades. Reversals of fortunes are par for the course during periods of upheaval. Indeed the contradiction is itself a sure sign of just how messed up our society is at a fundamental level. And of course this sort of thing is one of the reasons why I think this is not our last collapse as large families with few survivors will probably be the way we get through this round of collapse and it makes it almost certain to set us up for a next round.

eastender,

that was a tough one: ;-)

I do not believe that there was much spare capacity globally during the summer of 2008. The numbers from EIA are annual figures, but trying to work out the numbers from the summer of 2008 (June/July) using monthly data could probably give one reference point to work the numbers from in both directions.

IEA defines spare capacity as capacity that can be brought in within 30 days and sustained for 90 days.

To my knowledge oil in both commercial and strategic storage is not counted as spare capacity. During a crisis storage withdrawals will be used, but I would also expect others measures to come into play as well, like rationing.