I'll also point to Lou Grinzo's analysis of the monthly U.S. consumption figures:

http://www.grinzo.com/energy/blog_entry_archive/2006/03/2006x03x29_5.html

U.S. oil "demand" (i.e. consumption) in January was down 2% from a year earlier, and for gasoline it was down 0.6%. Especially interesting in conjunction with your vehicle miles travelled data being up in January.

Lou concludes:

The larger issue, though, is that demand, particularly for gasoline, didn't rise. We haven't tipped into a recession, there is no fuel shortage, the population increased, and yet demand is essentially flat--so what the hell is going on? Simple: Prices are up in the last year, roughly 35 to 40 cents/gallon higher in January 2006 than they were a year ago. In other words, all that supply and demand stuff from Economics 101 is kicking in. Prices have been high enough for long enough to convince at least some people to get serious about conserving. People are fleeing from SUV's and pickup trucks (hence the dual financial train wrecks that GM and Ford have become), and likely being a little smarter about saving gasoline.

We still have a hell of a lot more conserving to do, low-hanging fruit just waiting to be picked, so this could be just the start of some really impressive reductions in gasoline consumption. There will very likely be some increased consumption in some months, but over a period of a year or more there's no reason why the US couldn't reduce its gasoline consumption by 10% without resorting to drastic measures or causing harm to the overall economy.

Now, clearly there are production issues (possibly in the future) or otherwise prices would not be as high as they are. But it is still possible that the immediate driver for the leveling off shown in the graph is due to consumption stalling more than production hitting a wall.

Were are we going no one knows, but Russia won't grow forever; 10 MBD might be their terminal point. All in all, we're no where near the path to meet the demand of 87 MBD projected by the IEA for the final quarter of 06.

1. Not only the absolute production figures, but even the month-to-month changes claimed by these sources cannot possibly be consistent with each other, even when allowances are made for the different ranges of hydrocarbon products involved.
   
2. This problem is by no means limited to data concerning those producers, like the leading OPEC members, which many people believe publish misleading or incomplete information. It is equally acute for such countries as Canada, Norway and the UK.
   
3. Only for the US and Mexico among large producers are differences negligible between the three sources.
   
4. Incompatible as EIA and IEA figures are with each other, those from JODI are even less compatible with either of them.
   

I recall that Jay Hanson warned some time ago of the danger of using previous hi-ERoEI barrels and infrastructure to find ever-decreasing amounts of lower-ERoEI energy in increasingly numerous, but ever-smaller fields at ever-greater depths at ever-greater costs.  It is difficult to determine when this exactly occurs as the total embedded ERoEI aggregate approaches unity.

Does a portion of this appear to be happening now in the 2nd graph [with the smoothing long term averages]?  If the relative energy quality of the now extracted oil, and the total infrastructure ERoEI dedicated to bringing this extraction to market could somehow be incorporated into a new graph that reflected these effects: then the slope might possibly be declining for the last period.  In other words, the graph appears plateaued, but significantly less refined product will actually hit the enduser markets in the months ahead. Who knows? Is it even possible for you TOD geniuses to graph this?

We might be close to the point of unity ERoEI on many individual wells, but we keep pumping to help recover the already embedded financial cost at a net loss of that well's lifetime ERoEI.  The best example I can think of, at this moment is: a Hummer driver unknowingly burning 42 gallons of premium gasoline to make a roundtrip of getting, then hauling home 42 gallons of low-grade crude to earn enough money to make his Hummer payment.

For example, consider the wells in the GoM, and now Australia, that were flowing before the hurricanes, but were shut-in because the repair costs to the damaged infrastructure didn't justify re-establishing the flow. This new estimation of repair cost is a much easier calculation than trying to determine a unity ERoEI crossing point for a still functioning well.

The ongoing conflict in Nigeria doesn't lower the energy quality coming from the wells, but all the required infrastructure repairs do tend to lower the final ERoEI.  Or the vast military infrastructure costs trying to protect the Iraqi oil infrastructure, this lowers the final lifetime aggregate ERoEI from the wells too.  Is this something that can be graphed?

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

We will have to wait and see what happens, but I predict a quickly developing and severe problem with net export capacity worldwide.

Water crisis predicted on the Prairie

Canada's Prairies will face an unprecedented water crisis in coming years due to declining river flows and growing water usage -- especially in processing Alberta's vast oil sands, says a new study.

Summer flows in Prairie rivers are already 20 to 80 per cent lower than in the early part of the 20th century, say Alberta researchers David Schindler and W.F. Donahue.

Worst affected is the South Saskatchewan River, whose summer flows have been reduced by 84 per cent, according to the study published in Proceedings of the National Academy of Sciences.

 All the major Prairie rivers are fed by melting snow and ice in the Rockies, but the glaciers and snow pack have been receding due to climate warming.

Weather records in the Prairies show a warming of one to four degrees C in the past 80 to 118 years, and half the weather stations receive substantially less precipitation than a century ago.

The study says that Alberta is the most vulnerable to water shortages because of population growth, extensive use of irrigation and the rapid growth of the oil industry.

"The projected use of water for the oil sands could be as high as 45 cubic meters a second, which would be about half of the low flow of the Athabaska in most of the years of the last 15 or 16," said Mr. Schindler.

Currently the oil sands consume three to six barrels of water per barrel of oil produced.

Canada may have to choose between producing oil and producing food:

Alberta also accounts for almost three-quarters of Canada's irrigation agriculture, and for intensive livestock operations with 6.4 million cattle and 1.8 million hogs.

"If the trends described above continue, the combination of climate warming, increases in human populations and industry, and historic drought is likely to bring an unprecedented water crisis in the Western Prairie Provinces," says the report.

Crude  Production less NGL    down 8.7%
Crude imports                          down 2.9%
Crude runs to refinery              down 3.6%

Gas supplied                               up  1.0%
Gas refined production              flat   0.0%
Gas imports                                up 28.8%
Gas impt's + production              up  2.7%

Distillate supplied                        up 1.9%
Distillate refined production       down  .7%
Distillate imports                         up 27.9%
Distillate impt's + production       up  1.6%

The percentages were derived by summing the weekly posted daily averages for each year.

http://sydneypeakoil.com/phpBB/viewtopic.php?t=1972

On June 1, 2006, US refineries must start producing 0.015% sulfur diesel instead fo 0.5% sulfur diesel for 80% of their "Over-the-road" (i.e. taxable) runs.  The other 20% can go to fleet sales, fleets without 2007 and later engines.

This June start gives the supply chain time to reduce (via dilution) the at the pump sulfur levels for the new low pollution diesel engines required on 1-1-07.  New pollution control strategies are fouled by excessive sulfur levels (think lead in gasoline & catalytic converters).

There has been time to build new desulferization units, BUT some refineries plan to make "off road" diesel (farm, construction, barge, railroad) for a number of years till that to is required to go to lower sulfur content (June 2010).

IMHO; plenty of places fro foul-ups.

http://ecdiesel.com/environment/ulsd_qa.asp

And Brazil was a solution to exactly what again, oh ye cornucopians?

Chavez rules out return to cheap oil

Analysis by the US Department of Energy (DoE) - seen by Newsnight - shows that at $50 a barrel Venezuela - not Saudi Arabia - will have the biggest oil reserves in Opec.

Venezuela has vast deposits of extra-heavy oil in the Orinoco. Traditionally these have not been counted because at $20 a barrel they were too expensive to exploit - but at $50 a barrel melting them into liquid petroleum becomes extremely profitable.

The DoE report shows that at today's prices Venezuela's oil reserves are bigger than those of the entire Middle East - including Saudi Arabia, the Gulf states, Iran and Iraq.

The DoE estimates that the Venezuelan government controls 1.3 trillion barrels of oil - more than the entire declared oil reserves of the rest of the planet. Mr Chavez told Newsnight that "Venezuela has the largest oil reserves in the world. In the future Venezuela won't have any more oil - but that's in the 22nd Century." He will ask the Opec meeting in June to formally accept that Venezuela's reserves are now bigger than Saudi Arabia's.

Didn't Saudi Arabia open up a new pumping station (with all kinds of fanfare attached) that's supposed to pump out 600,000 bbl/d?  So I don't understand why SA production would be DOWN in the first graph, unless their older oil fields are declining a lot faster than anybody thought.  Thoughts?

As I've mentioned before, I have a bit of fascination with the 70s. I suspect there are significant lessons we can learn from that era that can help guide us with respect to the near-term responses to oil peaking.

So I've been busily looking up a few numbers, in particular the time frame from 1978 to 1981. This seems to be the nastiest part of the previous gas price spike, when oil went from around $45/bbl to almost $90/bbl (in 2005 dollars.)

In this time frame, we have one of the rare reductions in US VMT, some real changes in behavior, and a reduction in gas consumption in the US. The other main text of this era is that this is when automakers got religion and increased fuel economy, with perhaps a nudge from the US government and new CAFE standards.

However, I've found a really interesting subtext that has real bearing on our discussions of consumer behavior. A while ago, a poster here pointed out that all people had to do to deal with oil peaking is go out and buy a car with much better fuel economy. I pointed out that that is not as easily done as said, since many people are in hock so deeply that they can't go out and buy much of anything. Also recently, I found a Washington Post column that advised an SUV owner to keep driving their Expedition since it was more cost-effective to do that than to buy a new SUV with better gas mileage.

From National Academies of Science Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards (2002) p14

So I did some looking and found three extra pieces of auto information about the 78-81 era that aren't much reported. First, while new domestic and import car and imported truck fuel economy climbed rapidly in that era, new domestic truck fuel economy actually fell initially, and then rose. See the lower dashed line above.

From the same report, p16. I added the two vertical lines to indicate approximately 1978 and 1981.

Second, while new vehicle fuel economy rose, existing fleet fuel economy barely budged - from about 14mpg to 15-16mpg for cars and about 11mpg to 12mpg for trucks. This hardly looks like everyone running out to buy a new fuel-efficient vehicle and scrapping their old one.

Finally, which corroborates the last statement, car and truck sales fell off a cliff then too. Car sales went from about 11.2 million in 1978 to about 7.8 million in 1982. Truck sales went from 3.3 million in 1978 to about 1.8 million in 1981. Both sets of sales then slowly rose after that, with truck sales beating the 1978 record in 1984, but with car sales never beating its 1977 peak of 11.3 million sales. From EPA Light-Duty Automotive Technology and Fuel Economy Trends: 1975 Through 2005.

Here's what this all says to me. Americans are, for the most part, unlikely to ditch their current motor vehicle for a new one with better mileage for a long time. That long time may be the life of the vehicle, which could be 15 years or more. They are more likely to keep making the calculation that sticking with their current truck/car is more cost effective than making a change. This situation is likely to be exacerbated because the trade-in value of that truck/car will have fallen substantially and the person will have wrecked their finances paying for fuel for that vehicle/driving distance. This is pretty much what happened last time, and the things that saved people were rapidly falling gas prices and the safety valve of bankruptcy. Neither of these is likely to help as much this time.

One last chart. This one is from FHWA and shows vehicle registrations, total motor fuels consumed, and VMT. I think the "Gallons per Vehicle" is just derived from the consumption divided by the registrations but I haven't been able to verify that yet. There clearly was a significant reduction in fuel used, but without a blip in vehicle registrations. Something happened, but it doesn't appear to have been due to fleet fuel economy increases, sales, or VMT. I would guess that in multi-vehicle households, the more fuel-efficient vehicles were used more. Heavy carpooling, transit and nonmotorized transportation should have shown up in much lower VMT, which didn't change much, from 1.545 trillion VMT in 1978 to 1.527 trillion in 1980 and back up to 1.555 trillion in 1981 (from FHWA 95 summary of VMT).

Driving around in the old beaters will become a lot more socially acceptable when everyone is in the same boat.

And all the American families that already live hand to mouth will stop being ashamed of asking around about some carpooling when all the neighbors are doing the same.
We have no idea how resourceful people will be since it is so long since they have needed to be resourceful.

And to respond to another line in this thread: My working-class friends are well aware of global warming and a little aware of peak oil while my Kellogg School of Business friends and University of Chicago friends know absolutely nothing beyond what Alan Greenspan and their stockbrokers sell them. The educated classes in this country are indoctrinated and ignorant to the final degree. Let us hope those of you with engineering degrees will be more useful than my friends with polisci and econ degrees.

When plotting out maximum capacities year by year, a peak appears around 2010 but only when everything works according to plan.