UK Oil Production Lowest For 28 Years

More data from the DTI. On 26th Oct '06 the DTI updated their monthly oil statistics. The Excel spreadsheet is available here: Excel link. Hat tip Nick Rouse for bringing this to my attention.

The key quote is:

Oil production in the period June 2006 to August 2006 was 12.1 per cent lower than a year ago.
This isn't good news and perhaps we are becoming weary of such announcements however there is a little more we can say about these recent numbers...
Whilst we're looking at the North Sea we should also mention the strike announced this evening. From Reuters (Tue Oct 31, 2006 6:57 PM GMT):
More than 900 deep-sea divers working in the North Sea oil and gas industry will begin a strike over pay from midnight on Tuesday, a union said.

Steve Todd, secretary of the National Union of Rail, Maritime & Transport Workers (RMT) said an indefinite strike could significantly disrupt North Sea oil and gas output.

This represents the vast majority of divers operating in the North Sea and whilst diving activity scales down in winter months the diving that does take place is likely critical with this strike having the potential to force closures, probably on health and safety grounds. We'll have to wait and see what impact this has. Does anyone have any more information on this strike?

The DTI document lists August 2006 indigenous production of oil as 4.730 million tonnes along with million tones of NGL 0.483 million tonnes of NGL. Using the DTI conversion figures of 1 tonne = 7.5 bbls for crude oil and 1 tonne = 11.5 bbls for NGL this comes out as a mere 1.323 million barrels/day.

According to UK oil production data from the DTI provided here the August production looks to be the lowest for 28 years, lower even than in the months following the Piper Alpha explosion.

Imports are also listed. For August the UK net imports after subtracting exports were a total of 1.682 million tonnes of oil, NGL, process oils and petroleum products. This comes out as approximately 0.42 million barrels/day.

The Government's Energy Review of July 2006 suggested the UK would not be a net importer until 2010.

Buzzard (pdf) is the only major new field to come on line with a capacity of 0.2 million barrels per day at the end of this year. This will not even cover half the current net imports let alone make for further falls from existing fields.

Cry Wolf covered UK production and DTI production forecasts in more detail last month in his excellent article Lies, Damned Lies and Government Oil Production Forecasts? This latest information only supports the doubts expressed there about future UK production.

Someone's going to be sorely disappointed with North Sea performance as the decade comes to a close.

It does look (I hope) as if the Stern Review is going to be used by Government as the driver to reduce CO2 emissions in UK. Its publication has come at a good time, as I think there is a growing public acceptance that BAU is not an option from the climate change viewpoint.

By coincidence (ha!) the ways being proposed by Stern to reduce CO2 emissions are in many ways the same as the ways proposed to deal with peak oil. Packaging things up with a climate change wrapper is fine by me - what matters is that the use of fossil fuels is driven down.

I don't know if this is deliberate or if it has arisen by accident, but I do discern that there is a sensible long term strategy emerging that could deal (at the UK level) with both climate change and peak oil. If the Stern Review recommendations are followed the impact of peak oil on UK should be substantially ameliorated over the longer term.

Having said this, the high rate of depletion of the North Sea output is still going to create some difficult problems for UK plc until the CO2 reduction measures start to have a significant effect.

Nik G, I don't know how much you read over at the main site, but here's a comment I posted yesterday:

more or less voicing the same question that you raise.  If you have read my Lies Damned Lies post you will see that I belive that denial lies at the heart of the problem.  Once the reality of UK oil and gas production sinks in, I think the £GBP will take a huge hit - raising the cost of imports and interest rates.

Only way out is for the UK to join the Euro.


I spend far too much time reading TOD - it is very addictive!

I haden't thought about trying to mitigate things by joining the Euro. Maybe if the Supergrid being proposed by Airtricity takes off it would make sense. However, the Euro will probably be heading south along with Sterling then anyway.

Heading south against what?  The value of a currency is relative, it is measured in the value of other currencies.  Basically what you are suggesting is that the Euro will go down in relation to the dollar and the yen.  There's no logical reason to really think peak oil would be a good event in the U.S.  Although we still produce some of our own oil, we also use more oil than anyone and have as much or more dependence on it than any other country.  
But the US dollar is the currency of denomination, and of reserve.

It's easy to see a world where the US dollar is 40% devalued (such would be logical, and should have happened, bar domestic Chinese and other South East Asian policies, which prefer to hold down their domestic currencies by holding USD assets).

But a really big devaluation beyond that, when roughly half the world's economy is denominated in dollars, is hard to see.

Also Europe is in a relatively worse position in a PO scenario.  Yes we consume less, but we import 80% of our energy (coal mines in eastern Europe, and some renewables, plus of course the North Sea, but that is about it).

The US by contrast is the world's largest or second largest coal producer. Plus it has access to Canadian tar sands, Arctic gas etc.  And it has big biomass resources (wood for heating etc.).

Another factor (the same for CO2 emissions) is that the US would find it relatively easy to reduce energy consumption-- simply switching to diesel powered cars, ditching SUVs etc.  By and large, Europe has already made those sacrifices.

I should add that I don't think the euro in its current form is a long run currency.

Eventually Italy will find a way to exit, and Greece also-- both countries are effectively having their economies strangled by deflation.

I don't think many of the EU25 countries that are not in the Euro (UK, Denmark, Hungary, Poland etc.) are likely to rush to join it-- the ones who would benefit (Hungary) are precisely the ones in the worst fiscal position and break the ECB rules.

The euro will revert to what it always was: a Franco-German currency union, with Benelux (and maybe the Irish and the Spanish) along for the ride.

Except the euro does bring a lot of benefits for the integrated economies in turn - a manufacturer no longer has to deal with the overhead of currency transactions/risks.

And by now, the banks have gotten used to living without the money they used to be able extract from intra-EU trade, which means that EU wide companies - oh, like Unilever, or VW, or Barilla - find a lot of benefit in the euro.

Whether the euro has a longer term future than the dollar is open, but quite honestly, for the economies within the euro, the negative side is incresinly harder to firmly determine.

I hope that many of you are going to watch this evening's Panorama, on BBC1 at 22:30. The program is entitled UK 'failed to save gas reserves' and is about the shambles that is the UK's gas policy.
I think you will find it starts at 22:15 (Not 22:30) but, yes I will be watching !!
Perhaps off-topic, but this would let more people know what's happening.

Would one of the regulars (Cry Wolf, Chris Vernon?) edit (which is the main wikipedia article on UK energy) and add some realism, perhaps in the "energy gap" section?

If not, I may have a go. I would need permission to use some graphics (there was a nice graph of I think net UK energy production and consumption) which would have to be available under the GPL or public domain.


Toby, I'm afraid I just don't have time to do this.  If you want to use any of my charts I have no problem with that.

I agree that this section in Wikipedia should be accurate - this is part of the information / miss-information explosion and curse.


A couple of links on the strike:

BBC Scotland

The financial effect can be seen coming through in the official stats. In The Pink Book at page 37 there is a commentary showing a deficit in 2005 of £1.2bn. This is clearly going to get rapidly worse but I have seen no acknowledgement in the Chancellor's projections. By a very quick calculation, ass ming the new supply reduces the deficit to 0.2mbbl/day and the price stays around £30/bbl (big assumptions) then the deficit will nearly double this year. Of course if you believe TOD theories on accelerating depletion once past peak then these figures will get very rapidly worse.
Re Divers strike.  Word on the streets of Aberdeen is that this will not make a lot of difference.  Most sub-sea inspection work is now conducted by ROV's (remotely controlled vehicles).

Divers do a lot of work during the summer maintenance season and so the view was that this is a curious time ofr divers to go on strike.  One theory was that this was so they could attend the beer festival where all this vital information was gleaned.

So here's where the latest data lies WRT to my 7.5% decline model (solid red line) and the DTI forecast.

Its really curious that there has not been a lot of news coverage on this.  The UK trade balance will I imagine be plunging into the red... draw your own conclusions about the economic impact.

UK Chancellor Gordon Brown, known as Prudence, increased borrowing on and off balance sheet, increased taxation, increased public spending

Take a look here

(Damn! https doesn't linkify automatically).

The UK has a 2 trillion dollar economy. 1 million barrels per day (nice round number, way more than the UK's oil deficit at the moment) equals about 1% of that. A steady increase in net oil imports isn't good news for the balance of trade, but it isn't exactly apocalyptic.

Sometimes I think ToD contributors forget that there is more to life than hydrocarbons. Somehow the UK survived many decades of importing ALL its oil.

Somehow the UK survived many decades of importing ALL its oil'.

It did indeed but your talking about a period before the late 1970s when

a) the UK had a large manufacturing base - ie when it actually made things (as I recall that base is now down to around 17% of the total economy)

b) the UK did from 'time to time' actually had surpluses in its balance of trades.

From what I recall the Uk economy has been in deficit in termes of balance of trade for a number of years now (and that position has been gradually wosening). Now that oil is going to be a net (and rapidly increasing) negative to that, rather than a positive, I think the consequences are going to be serious for the UK (and more specifically the pound). As crywolf points out its astonishing the mainstream media in the UK dont pick up on this.
After all the figures are very clear and the DTI publish them frequently - basically 2006 will be the first year in which imports exceed exports (2005 was only narrowly positive), barring an epic turnaround in the last few months of the year. And yet the DTI still adheres to the fiction that 2010 will mark the turnaround. By 2010 at present depletion rates of around 10% the gap between exports and imports will be vast........

Forgot to add;  you can see how bad the UK's trade position is already here:

That position can now only worsen as oil exports fall below imports (barring a collapse in the average John's desire for Chinese goods)

UK gas imports already exceed those of oil (in BOE equivalent and doubtless also in dollar terms).  This situation is likely to continue.  On this basis we need to multiply the projected oil trade imbalance by around 2.25 to arrive at UK's likely combined oil and gas imports; it sure won't be pretty.
Sorry, I just don't see the sky falling. Every country is a special case, but the US has tolerated far larger trade deficits and oil deficits for 2-3 decades and multiple economic cycles. Check back in ten years and let's see if the world (or the UK) has come to an end. At worst, I expect to see a fraction of a point shaved off economic growth.

Like you, I don't expect any major turnround in the UK sector, in 2010 or any other year. Just steady composite-exponential decline (with some modest reduction of the overall annual percentage decline rate, for technical reasons I won't bore you with). Every so often there will be a discovery in the hundred million barrel range that gets blown out of proportion by the scandal-sheets.

If you are a ToD regular (like me), consider the possibility that oil looms larger in your overall worldview than its true importance would justify.

The US gets away (or has done till now) with running a large trade deficit because it has the great good fortune that its currency is in effect the world's reserve currency.
The UK has no such 'luck' to fall back on.
And yes trade deficits do eventually bite, generally via currency devaluations and then via their impact on long term interest rates (ask the good folk of Iceland).

I am no fan of the Euro, but Europhiles do finally have one coherent arguement now for the UK joining - to prevent the pound taking a caning as the trade balance begins a one way trip south.

The US gets away (or has done till now) with running a large trade deficit because it has the great good fortune that its currency is in effect the world's reserve currency.
The UK has no such 'luck' to fall back on.

I agree with you that the US 'gets away' with its huge trade deficit because of the dollars position as the world's currency. I also agree with your implication that this might not last forever.

I don't, however, think you are right about the UK having no such luck. The UK, in fact, also benefits massively from the dollar being the world's reserve currency: London is the main world centre for 'eurodollars' (ie. dollars which are deposited in banks outside of the US). This means that there are huge capital flows into the UK which would not exist if the dollar were not the world currency.

The bigger the US trade deficit gets, the more dollars there are likely to be being deposited outside of the US and the more money tends to flow into the UK. It is this  capital surplus which allows the UK to run a persistent trade deficit without its currency collapsing. (Another reason is that the pound Sterling also has small reserve status itself).

This dependence of the UK economy on the dollar's reserve status is certainly one reason why the UK is not in the eurozone, and has a foreign policy which is so closely linked to that of the US. When the US went to war against the euro in Iraq, so did the UK.

...and when the UK was importing all of its oil the average citizen yearned for a Mini with a 750 cc engine and probably drove less than 5000 miles a year.  How much oil do you suppose they imported?
How much oil do you suppose they imported?

If you're really interested in the answer to that question, look here...

... a lot more than they'll be importing any time soon. Of course, back then they were building oil-fired thermal power stations (Grain, Fawley, Ince, Pembroke).

Sorry to nitpick... my minis (1961-1979).. had either a 848cc or 998 cc engine...

Never could afford the 1275cc Cooper S...

Then, as now we drove ~12,000 miles a year... on mostly empty motorways... but then petrol at decimalisation in 1971... was 30p...

But what was it in 1974, after the first oil crisis?

And against the average weekly wage?

The data shows that the real cost of motoring has fallen by about 10% since 1972 (and real per capita incomes have doubled, more or less)-- this includes insurance, fuel, road tax, depreciation*.  Conversely the cost of train fares has risen 60% in real terms, and of buses 40%.

* the big drop has been in the price of a car, or to be specific, the price of a car with the level of equipment that we now take as standard (air conditioning, air bags, etc.).

Sometimes I think ToD contributors forget that there is more to life than hydrocarbons. Somehow the UK survived many decades of importing ALL its oil.

If almost everyone is importing, who is exporting?

Is that an actual question?
My most recent EB missive on the subject:

You can find others by searching under authors for Jeffrey Brown.

It is. Can you answer it?
I'm not sure where this is going - I can smell a "zinger" in the works - but I'll bite anyway...

  • Nigeria
  • Angola
  • Kuwait
  • Saudi
  • UAE
  • Russia
  • Chad
  • Sudan
  • Azerbaijan
  • Iraq
  • Iran

...amongst many others, and at vastly different rates and with vastly different resource bases and prospects for future growth (mostly none). If I wanted a comprehensive list I'd do the same as you and look at the BP Stat Rev, with an appropriately critical eye. And I'm well aware of the "decline steepening" effect that constant, yet alone increasing, domestic consumption has on export capacity. And yes I know Iran has been importing gasoline. Yawn.

What is your point? And please don't lump me in with the Cornucopians, 'cause I ain't.

Jeff was the zinger. I think he and Khebab  invented the concept of "peak exports".
Kuwait:  I think that they are right around 50% of Qt (based on HL), and they have admitted their largest field is in termianl decline.

Saudi:  They are about 58% depleted, and at the same point that the prior swing producer, Texas, started declining, and the Saudis are reporting new "voluntary" cuts every few months.

Russia:  Hugely depleted (at least from existing basins), around 85% or so.  The recent rebound in production just make up for what was not produced after the Soviet collapse.  Recent news reports suggest that production and exports have started falling again.  I predict that the big news next year will be the confirmed declines of both Saudi Arabia (KSA) and Russia.

Iraq:  'Nuff said

Iran:  I believe that they are about 50% depleted.

In any case, my original TOD post in January focused on the top three net oil exporters--KSA; Russia and Norway.  

I predicted, based on Khebab's work, that we would see continued declines in Norway, with KSA and Russia also showing declining production this year.  KSA is definitely down.  Five of the past eight months of EIA data have shown Russian C+C production to be below the 12/05 level, and as noted above recent news reports indicate production and export declines.  As I have repeatedly predicted, Russian and KSA consumption are growing quite rapidly.


Is there no connection between Qt and reserves?  Are Qt estimations solely based on HL predictions of total recoverable?  Otherwise, given the huge reserve estimation difference in Kuwait, how can one say what Qt really is or determine where 50% is?

Don't forget Canada and Mexico...
and re: "more to life than hydrocarbons" - try living without them.  It won't be the same life, I assure you...
Back to the 70's - here we come.  At least the music was good back then.
My prediction for the future:  imagine that the Seventies never ended.
"imagine that the Seventies never ended."

Yep, even Genesis are getting back together!  Soon long hair (maybe because many people won't be able to afford a haircut) ... and long lines at the petrol pumps will be back too.  

And if you think hydrocarbons don't matter to the Uk economy, consider that 28,000 people opted for bankruptcy in the second quarter of this year - multiply x5 for a US equivalent.  If continued that would be 0.5% of the working population per year.  There is a big chance IMHO that the personal debt and housing bubbles are going to burst horribly in the next 2-3 years.

I agree with your conclusion.

I have been a stale bear of UK housing for 6 or so years now.

I can't see how prices in my neighbourhood can keep going up: at least triple since 1995.  Although London is doing well (financial services) the average person just hasn't had that kind of income rise.

It seems to me a giant pyramid in the making.  You can get 100% and even 120% mortgages now.

It is shocking how far people, especially the sub 35 crowd, seem to be willing to get into debt.

I think the banks know they have a problem: I have noted fewer credit card offers in the post.

however the rise of UK bankruptcies is in part due to new forms of personal voluntary arrangement.  So it's a legal transition, as well as a sign of over indebtedness.

5 times salary mortgages - never meant to be repaid?
Japan got precisely to this point in 1989.

I believe residential housing prices in Tokyo are still 60% below that peak.

Toronto dropped 40% in the early 90s, and has yet to recover (adjusted for inflation) to that high.

German property prices are below where they were in 1990.

Now for a number of reasons I don't think the UK will be as bad (high immigration, low unemployment, relatively successful economy, tight planning controls).  We still produce fewer new homes (about 140k pa) than net new demand (about 200-220k pa).

But there needs to be a valuation correction-- there is a lot of debt sitting on a lot of buy-to-let housing out there, and a lot of 'easy money' has been made.

The talk, and the market, reminds me so much of the dot com (or dot con) era.

However, I have been saying this for 6 years, and have been wrong all the way ;-).

VT - I am always astonished - is there anything you do not know?  I'm sitting in an internet cafe off the Totenham Court Road toinght (Monday) going to the Oil Very Rapid Depletion Conference tomorrow.

The 5* sallary seems like an act of desperation to me - I think it was 1.5 or 2* when I bought my first flat for £12,500 almost 30 years ago.  There has to be an upper limit to sallary multiples that cannot be crossed.

I've been waitying for 4 years to buy a cottage in the country - and have seen resources set aside for the purpose dwindle in that time.


nother sign of inflation in the housing market, just like in the late 80s:

- young people (not couples, just friends) buying flats together as a way to 'get on the ladder'

I know a bit about such arrangements-- when they unravel, they cause unholy messes.  Friendships (and lives) are ruined by the disputes, the inability to sell, etc.

My prediction for the future: the rate of economic and social change that has been the norm since the Industrial Revolution, will continue unabated. Mass migrations, world wars, civil wars, dictatorships, recessions, depressions, epidemics, extinctions, population explosions, diebacks, genocides. And entire areas of economic activity will disappear without trace. What else is new?

In retrospect, the period we are living will be seen as a brief golden age between the self-destruction of the European imperial powers and whatever phase of conflict comes next. Might be a battle for the remaining oil, probably not: much more probably, oil will be one aspect of a series of big sphere-of-influence conflicts between Eurasia (Russia/China) and the West (US/EU) starting sometime in the 2030s. All that silly Islamist troublemaking will be swept aside once the real fighting begins.

My two grandfathers were intimately involved in the mass industrial killings of the two world wars, came home, and got on with their lives, job or no job. Our descendants will do the same.

Two hundred years from now the human population of the world could be anything between 1 billion and 25 billion (I'd bet on 4-8). And oil supply will be the last thing on their minds.

Oh and yes: everything that can be burned, will be burned. Eventually the Library of Congress will be quarried for fuel.
At first, it will be fun burning books, I'm sure. It's always fun to burn shit. Roman Candles. Fourth of July. Who doesn't love a campfire? A nice "romantic" fire. C'mon BABY, Light My Fiiiire! Then we say it is necessary. To save a little oil.

But at a certain point, we will have to make a choice. Between Tropic of Cancer and The Sun Also Rises. Between Simmons and Deffeyes. 1984 or The Road. Choices.

Stay warm and your Kids will never read this.

I'm a little surprised this didn't get a response. Perhaps nobody read it. These days, if you're not Hothgar, nobody pays attention to you. You have to make a name for yourself. Being one of the smartest TOD posters for ages just doesn't cut it anymore. Anyway, I always read you. I usually agree. And am never anything less than extremely amused. Keep it up. You are a serious source of joy...and that pain in my back just went away. Hmmm.
IMO, the ending of the 1970s (the ending of the public dialog over energy, population, natural resource, and environmental overshoot) was a great tragedy.  The last quarter century has been just one long "pandemic of dumbassery" as AMPOD would say.

I welcome a return to reality.

Yes , but what about the cars, the shirt collars, ties, tank tops and platform shoes?

And anyway, since oil has 'dropped' to 60 from 80, the great and the good seem to dismiss PO:,,2095-2437519.html

A FIERCE DEBATE has been raging, mainly on the internet, and for once it isn't about Princess Diana, September 11 or UFOs. The debate is about oil, and whether the world is about to run out of it.
Peak-oil theory postulates that the globe is at or close to its production peak and that it will be downhill from here. Peak oil's great guru is the late M King Hubbert (like John Wayne, his first name was Marion; like Wayne he chose not to emphasise it). He was the American geophysicist who predicted in 1956 that American oil production would peak about 1970 (it did) and that a global peak would be reached a quarter of a century or so later.

I sent Dave Smith a whole bunch of info on PO including a copy of the original Hubbert paper.

Fat lot of good that did.

Maybe I should have written it in crayon

of course the tone of the Times implies that Peak Oil is the land of cranks.  Condescending, implying it is up there with Diana and 9-11 conspiracies etc.

It's one of the reasons why I don't think people should cry 'peak oil' too early: when the sky really is falling, no one will be listening.

I find David Smith's article is an exercise ego.

It denegrates everybody and everything, and David Smith has the inside track on everything, correcting everyone.

He attacks Stern's superfical analysis of Peak Oil (URR, vs production capacity (declining) and increasing demand, and inflated estimates of URR).

Coal is not usually included in reserves for Peak Oil and Peak Gas.

"There is enough fossil fuel in the ground to meet world consumption demand at reasonable cost until at least 2050," the report said.

While I don't think we are at an oil peak now, there is something close to an industry consensus that we could reach that point in 20 years.

I mention the oil point because it illustrates what I think is the problem with the Stern report.

But look at his conclusions:

I also believe there is more we should be doing than just adapting to climate change. Weaning ourselves gradually off fossil fuels makes sense, not just for climate reasons but because of security of supply and the eventual oil peak.

But nobody will do anything !

Just marvel at David Smith's perspicacity (look it up, my ego needs stroking too :P

Looked at more closely, the report's headline message -- spend 1% now to avoid 20% damage later -- does not stack up. I don't want to debate the science again, but the numbers given prominence are at the high end of what even scientific believers expect.

At this point, environmentalists will cite the precautionary principle. Better to be safe than sorry. Act now just in case there is a catastrophe later -- the millennium-bug principle.

Except that, as the report makes clear, the precautionary principle is highly sensitive to assumptions used, about the risks and the relationship between current spending and future benefits (the discount rate). If the cost now is low but the risks of future severe economic damage are high, that argues for action. If not, action may be unjustified, certainly on economic grounds. Spending 1% of global GDP every year from now, to avoid the loss of 2% or even 5% of global GDP in 2200 does not seem a great bargain.

1. the first paragraph is not correct.  Scientific knowledge has moved very fast in the last 5-6 years.  We have become aware that

  • a number of the 'damping' factors in the earth's system are now under threat (plants reduce their CO2 intake at higher levels of atmospheric CO2, the Amazon is threatened with severe drought, the methane release from the permafrost is much higher than expected, the Greenland and Antarctic ice sheets are in worse shape than we thought, oceanic acidification is rising)

  • We have also become aware that climate changes are not long and slow (always) they are also, according to the glacial and sedimentary record, extremely violent and short.

5 degrees centigrade is no longer 'way out there' but a growing concern amongst a large number of the scientific community.

There seems to be a 'point of no return' where positive feedback loops will generate climate change without 'anthropogenic forcing' ie without human hand.  We might be quite close to that level (ie it could be as little as 600ppm CO2+ other greenhouse gases, v. 380m ppm CO2 now, and 430ppm adjusted for other gases).

  1. 'Millenium Bug' is a straw man.  One was an entirely human-defined and scoped problem.  This is a systemic problem, of which only a small part can be seen by us.  the consequences of our actions are deep and far-reaching, and we don't know what they might be.

  2. Global GDP in 2200 will be 32 times what it is now (2% pa real growth ie less than the last 50 years).

So if GDP is $1 now, then spending 1 cent now, to save $0.64 in 2200, doesn't seem like a foolish bet.

But Stern is very careful to outline why he thinks we should value the future pretty much as the present.  ie on ethical grounds, we should assume that future generations exist, and they have as much right to the planet as we do.

He suggests a low, positive discount rate (to reflect the chance that the world might not exist).

The other thing Smith raises is the old Bjorn Lomberg Canard about how we could fix the other problems of the world with much less money.  But:

  1. we aren't prepared to do so.  There is no way the rich countries of the world are going to commit 1% of GDP to foreign aid (nor, necessarily, would it be well spent).

  2. If the planet itself is significantly less habitable (the precautionary principle) then you can spend all of 1, and still have a massive environmental crisis.

In the end the thing breaks down to this disagreement:

  • those of us who think we are running an uncontrolled climate modification experiment on the planet (remember Michael Crichton testifying to the US Congress criticising the absense of 'double blind tests'?  And being told that since we had one Earth, this was difficult?) and that there is an increasing body of evidence that this is unsustainable, and that the consequences will be sooner, rather than later

  • those who think it's too much money and too difficult to worry about it now*

(I discount the sceptics of the idea of man made global warming in this-- I really can't find any reasonable scientific doubt that we are changing the climate of this planet via CO2 emissions).

* to be fair, there is an argument that since the bulk of the solution will be about new technology, we ought to wait for that technology to emerge before doing anything precipitate.

However we aren't doing a lot to speed the progress of new energy technology.  One of the strengths of the Stern Report is a thoroughgoing review of energy R&D (less than half the level of the 1970s, across government and industry) and the slow speed at which new energy technology is taken up (50-100 year life cycles of major technologies and capital assets like powerplants).

By the way, Bjorn Lomberg has a long editorial in the Wall Street Journal (Asian edition) today arguing against the conclusions of the Stern report. I haven't had a chance to read it yet, but will tonight. FYI.
I read it.

He doesn't say anything new.

He is an interesting mix of the totally witless, or the really, really clever.

What he says is that we should use that money to do something about more pressing problems such as malaria, AIDS etc.

But he knows that that will not happen-- so he becomes a poster child for the right wing sceptic on global warming, without himself being one (AFAIK he doesn't deny that humans are causing global warming).

On global warming itself he basically takes a reductionist view: it will cost x, preventing it will cost y, avoiding it will cost z.  x + z < y, therefore action is not justified.

However he ignores:

1. the risk of extreme climate events, which as a civilisation we cannot cope with, and the mounting evidence that we can trigger such events by our continued actions

so our estimate of x and z could be very, very wrong.

2. what is the price of Bangladesh?  ie how do you value events like having to relocate whole cities, or whole countries.  Surely you cannot just value Bangladesh by its GDP (ie less than the damage caused by Katrina)?

 Katrina was a relatively localised, low cost example of same: $50-100bn of cost.  What are the lives worth of 1,000 or so, very poor, ill educated, black Americans?  Because that is what Katrina cost (and in a Third World Country like Haiti, no one would have noticed).

3. the possibility that y, the cost of mitigation, could fall because of better technology and adaptation by the economy.  

Lomberg is great.  He sounds like a scientific rationalist, just like the global warming alarmists (note how that very term implies a degree of irrationality).

But he provides a useful smokescreen for a group of people who deny that there is a global warming problem, and think it is 'the greatest hoax ever perpetrated on the American people' (by a global scientific conspiracy).

The fact that the world scientific community is far more alarmed than the non experts*, and believes that atmospheric CO2 levels have to be stabilised to ensure long term climatic stability, whilst the world economic and political community is arguing for increases (pre stabilisation) of at least 50%, is a disjuncture that is being completely ignored.

* to the extent that the more scientists know about the subject, and the closer they are to the leading edge of research, the more alarmed they are.  James Lovelock has pointed this out: each glaciologist, oceanographer etc. is in possession of his/her own little bit of data, which shows disaster, but is of the impression that the bigger picture isn't as bad.

What he says is that we should use that money to do something about more pressing problems such as malaria, AIDS etc.

I assume he included feeding poverty stricken populations too?

Yeah, great idea. Let's get rid of illness and subsidize growth with free food.

I assume you caught this, Valuethinker, but is this not totally stupid? We already have a population growth/resource consumption problem, and he advocates using what little excess we have to exacerbate the problem.

I'm all for ending suffering, but let's be smart about it.

I agree with valuethinker's take, but to claim that curing AIDS and Malaria is totally stupid seems deranged.

Tackle AIDS and malaria, and productivity and gdp/head in Africa will start to rise.

Do that, and fertility will start to fall.

There are very few exceptions to that rule: Saudi Arabia for one, but other moslem countries (Morocco, Tunisia, Turkey, Iran) have shown significant declines in fertility.  

The key (and to fighting AIDS) seems to be education of women.  The higher the literacy rate of women, the more likely the Total Fertility Ratio (children per woman per lifetime) falls.

The key to a lot of things is educating women. As much as I think climate change may be the greatest threat facing mankind, I don't think dealing with it needs to suck up every penny from every other problem.
I think that I and also Roel have reached the view that it is already too late.  The disintigration of the the Arctic Ice sheet, reduced albido will lead to warming of the Arctic Ocean, followed by melting of permafrost and ranaway release of CO2 and methane and so on ... note that its easy to beleive this given extraordinary warm weather in Aberdeen just now - and if the weather gets very cold I'll probably change my mind.

Roel posted some interesting stuff on Drumbeat a couple of week ago - Gulf Steam switched off for 4 days in 2004 - I was in Boston then (part of my Ill Doomer tour)and someone posted a very important link to a paper why switching off the Gulf Stream won't matter - if you haven't seen this then quite an important one to read I think.

I'll have a look, thanks.

The North Atlantic Thermohaline Convection (THC) aka the Gulf Stream and its cousins, worries me a bit less than the permafrost meltdown-- I guess that's the Canadian passport for you!

So if GDP is $1 now, then spending 1 cent now, to save $0.64 in 2200, doesn't seem like a foolish bet.

If you compound your $0.01 yearly, then you are only getting a 2.17% interest rate on that investment. Most people/organizations would find this to be a very poor investment opportunity.

No, it's actually just about the real rate of return (the risk free rate of return on a real government bond is about 2.1%-- US TIPs, Canadian RRB, British Index Linked gilt).  Of course you can't buy that bond (it doesn't exist) although there are now 50 year real return government bonds.

Remember too there is a probability you are saving far more: how do you value civilisation if you could make it impossible for it to continue?

There is a technical term for that concept

it's called 'Real Options Theory'

preserving the climate at a level in which civilisation can operate has a real value, which is valued as an option.

Or put it another way the option you are buying by your actions now, is an option on civilisation continuing to exist and/or incalculable damage being caused in the future.

At which point, spending 1% of GDP now for that option looks to be a trivial amount.

is Gordon Brown wearing a hairpiece ?
Sure looks like it to me.

By the way, what's with the first name of Marion,  I used to work with and engineer whose name was Marion Kay Thompson,  and he too went by his middle name only just using the letter " k "

Marion King Hubbert?  I think he used his middle name cos he had ambitions to rule the world.
Wish I could find CERA's chart again which showed the great growth in UK production in the 2nd half of this year.

I'm glad we will finally be able to start evaluating their 2005 projections. I just wish we had their 2005 report. Oil CEO had a link to it a few mos back, but the link stopped working a few weeks later. I had read it, but not kept a download.

I have the report.  The predicted 2.25 mbd for 2006.  If I am calculating the actual 2006 numbers correctly, they have produced an average 1.6 mbd through august.  CERA predicted 2.4 mbd next year for the UK, so they are really going to be off next year.
I covered the UK and Norwegian production forecasts in some detail here:

if you have a couple of hours to spare:)

Very interesting, thanks.
A big Oops for CERA. Buzzard won't come close to closing the gap.
Any chance you could email some details on the CERA report?

My reckoning is that production will still fall next year - even with Buzzard - a side ways lightly down shoulder on the decline curve - before heading south again in 2008.

Yeah, I'll send it to you right now. This is the original(as far as I know). There's a small update. Don't bother youself with it. It seemed liked timed publicity.
Hey, Peakearl, If you list an email addy, I'll send it to you. If you don't want to list send me one at mine. It's good. I really like it. I believe it as much as all the others, which means I don't. I use it as a reference. 2005 may have been the year CERA realized the hoi polloi were watching. But what's instructive is how many people constantly ridicule CERA but have never actually read what they are saying. I think my still-to-be-responded-to post to Darwinian's on depletion is testimony to this. I'll never forget where I studied my first CERA report. I mean studied. It was during the daylight hours at a Dar Williams concert in Lowell Massachusetts. And I was thinking about Jack Kerouac the whole time. She covered Jimi Hendrix that night. And she kept coughing. She stopped a song to go clear out her throat. Only people that were there know I'm not making this up. 8.75%. Is case you were wondering. For Iran. And that's just the first year.
I have been watching the UK production for about 6 years now.  I moved to the UK as geophysical manager for the North Sea and won a wonderful dinner from my bosses wife by betting him that the UK production had peaked in 1999. He has more guts than I. I can't imagine telling my wife, "I lost a bet so you have to cook a meal for a foreigner"

Anyway, one of the big hopes was Buzzard field which was supposed to come on line this year but it has more H2S than they thought and the platform they built might not work (according to UPstream)

I also am watching the Saudi production. From October last year until August, it looks very much like a normal decline curve, and like the UK in 2000.  If I am correct, the Saudi's now have entered natural decline. See the chart at the very bottom of

Is that your Web site?  I've come across it many times while researching peak oil, but never knew whose it was.  

I assume you are talking about this graph?

It certainly is suggestive.

That is my website.  I had hoped to be more active on this board, but circumstances of health have prevented it.  The last few months of the Saudi production scare the heck out of me.  I showed this to an engineer who is a very knowledgeable person and he said, "Oh my God, it has started and the world isn't ready for it."  

I have known this individual for 15 years and that was the first time I actually saw him scared.  He said that before I had said much. I just told him, 'look at the Saudi Production curve."

Yep its interesting - although EIA figures show Saudi production hitting a low point for the year of 9.1m/b/d in June and then a recovery to 9.3 in July and August. Problem is, since then there have been these supposid cuts in production in response to the fall back in price - how will we know whether the cut backs are Saudi BS or real (at least till demand picks up again)?
The problem is that the cuts came after the data for this chart.

Do you know anything about Manifa?  Can it replace Ghawar?

Not in quality of oil.  Low API, high sulfur and of course TOO much vanadium.

Not in quantity. Less than 1 million b/day scheduled (enough to slow downslope) for speciality refinery.  And low % recovery is to be expected.


according to the first paragraph in
(i know its not an authoritative source ) there is significant vanadium and hydrogen sulphide in the oil, making mass extraction expensive. (i haven't been able to find any other sources for this info) - there's discussion of this at reports that the manifa oil field will aim at production of .9mm bpd when fully developed (by 2011). - so 5 years from now, its expected to account for less than 10% of the saudi oil production - this will probably not even account for natural decline of existing fields.


"Oh my God, it has started and the world isn't ready for it."

I'm glad that some other Oil Patch types are seeing the obvious signs of the world peak.   About a thousand times I have wondered how in the world oil and gas insiders can predict rising production when all four of the current super giants are almost certainly all declining at the same time that we crossed the 50% of Qt mark worldwide.

Hi West Texas,

I think some predict rising production because they don't want to hurt stock prices. Others, like Exxon VPs (who I have heard joking about not wanting to offend the Saudi's in the audience) do it to please the Saudi's (the joke is to maintain some level of personal credibility.

Others, just think like Pollyanna.

Apparently, Daqing in china is now under 1 million bopd

I saw a report last fall that Kuwait can no longer maintain 1.9 million bopd per day for Burgan and they dropped it to 1.7 million.  I was in a talk at the Soc. of Exploration Geophysicists, where a Kuwaiti was talking about a new fracture production trend in Kuwait.  I was amazed that they were talking about targeting such quickly depleted zones.  The author actually said they were doing it becaue 'there were no more Kuwait-scale opportunities' in Kuwait.

And of course, there is Cantarell, which the Mexicans ahve said has started plummeting.   It accounts for 2/3 of Mexican production.  

The fun and games of gloom and doom are just about to begin.

Another note, a few years ago, I went to a broker and told him I wanted to invest heavily in energy. I told him what was about to happen.  He didn't beleive me, he went and talked to a bunch of pollyannas in the oil industry and came back to me telling me that no one else in the industry believed what I did.  I told him I didn't care what they thought because they hadn't studied it like I had.  He is now a believer in Hubbert's messsage.

An update on  Cantarell:

If you go to you will see that
Now cantarell (now named Akal Nohoch)
accounts for only 52% of total mexican
production. October production (not yet updated
on the website but reported on the Mx press)
Also fell. so the downtrend has been firmly
established throughout 2006.
Exports overall have fallen 18% throughout the
year. and overall production has fallen 6%.
The mexican press has not yet moved these news
to the front page since there are now soundbytes
in place to make the disaster presentable
to the public. Most of the public discourse
hovers over the inefficiencies of PEMEX and
the potential opening up of exploration
to private companies for deep offshore
No news have transpired of interesting prospects
so far. ah yes... cantarell (Akal Nohoch)
stands at 1,626,000 b/d

According to statistics on UK industrial production, which were published today, 'Routine maintenance, which significantly decreased oil output in August, has continued to a lesser extent during September.'
August is always the low month of UK production.  The weather is the best at that time of year.  September isn't too bad so repairs and other work can go on then. But don't let your work stretch into October!