Plateau update

The EIA is out with the new International Petroleum Monthly which covers through January. (They actually published it March 31st, but I was out of town). Here's the updated plateau graph with the IEA and EIA numbers. As in December, the EIA was slightly cheerier about January than the IEA was. However, both agencies agree on a drop in production from the high in December.

Average daily oil production, by month, from various estimates. Click to enlarge. Believed to be all liquids. Graph is not zero-scaled. Source: IEA, and EIA. The IEA raw line is what they initially state each month. The IEA corrected line is calculated from the month-on-month production change quoted the following month.

Overall, there is no fundamental change in the supply plateau pattern that we've tracking for a number of months. This next graph shows the average of the EIA and IEA number, together with nine month (plum) and thirteen month (blue) centered moving averages of it.

Average daily oil production, by month, EIA and IEA (corrected) estimate averaged. Also a nine month centered moving average of the monthly series. Click to enlarge. Believed to be all liquids. Graph is not zero-scaled. Source: IEA, and EIA.

The new 13 month centered moving average makes for a nice smooth curve and shows the recent flatness in supply well. Readers are welcome to speculate about whether the break, when it comes, will be up or down.

There was a small frisson of excitement in checking the Saudi and Russian numbers (the two countries most important to the near-term peak oil debate). The EIA has them both down in January.

Average daily oil production, by month, for Saudi Arabia and Russia. Believed to be all liquids. Graph is not zero-scaled. Source: EIA.

However, I really don't think we can conclude anything from this. Russia was affected by transitory problems due to cold weather in January. And as to Saudi Arabia: well the Joint Oil Data Initiative has January data for Saudi Arabia, and they reckon the production notched up in that month.

Average daily oil production, by month, for Saudi Arabia and Russia. Believed to be all liquids. Graph is not zero-scaled. Source: Joint Oil Data Initiative.

All in all, nothing very significant to report.

Finally, one last graph (a new one). This shows US imports of crude and petroleum products over the same time period as the other graphs (since January 2002). The graph is a four week moving average from the EIA. WesTexas has lately been raising the concern about world export capacity falling much faster than total production in the future. Not much sign of an issue at present (note that imports fall nearly every winter, and 2005 is exaggerated by the post hurricane import peak). However, if imports kept falling as we go into the summer, that would be something new.

Imports of oil and petroleum products by US. Four week moving average. Source: EIA.

Past coverage relevant to the plateau:

Update [2006-4-4 13:48:12 by Stuart Staniford]: A commenter requested another link.

Other relevant coverage

One minor point, usually with a centered moving average you'd cut it off half the window size from the end of the data. I guess in your case you are gradually reducing the window size, so that the last data point is averaged over a half window (4 1/2 or 6 1/2 months) to the left. It's a little confusing the way it is shown now, because later data may alter the shape of the moving average graph.

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

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.

The lesson I take from all this is that the production graph up there is also a consumption graph. Leveling off may not necessarily be entirely due to production limitations, in the sense that it is becoming impossible to increase production, per peak oil dogma.

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.

You're correct that I'm reducing the moving average window at the edge, and that this will cause the curve to move in the future.  It also moves in the future because the agencies revise their numbers.  I still prefer this approach because it allows us to see the trend as clearly as possible given the data we have.

With all due respect to Lou, I think he's not paying quite enough attention to the seasonal issues (January is invariably the lowest demand month for gasoline), and the fact that this particular January was unusually warm means that demand for heating oil was sharply reduced.

As to your last two paragraphs.  Obviously, the "production problems" cannot be mainly in the future, or stocks would have sharply increased (whereas they have only increased by about six days worth of production/consumption over the last two years).  If there were producers who were able and willing to produce more, prices would not have increased so much, and demand would have continued to rise (given that the global economy has otherwise been doing well).

So I think we have to posit some combination of lack of ability or lack of willingness to increase production.  (I'm inclined to think it a mixture myself - most countries can't increase production any more than they have, and Saudi Arabia maybe could but isn't trying very hard).

I missed this comment of Lou's:

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.

He means 10% in one year.  That is completely implausible.  Year-on-year gasoline consumption in the US has never dropped by anything like 10%, and drops in driving of only 2% have only come in the past with significant economic pain.  Recall this graph:

Also, while US auto sales have started to shift, there's no sign of impact on overall fuel efficiency so far:

Vehicle miles traveled per gallon of supplied gasoline in the US.  Source EIA and FHWA.

The guy didn't read the Hirsch Report.
If by "the guy" you mean me, you're wrong.  I have read the Hirsch report, and I think it took a very shortsighted view of the transportation situation.
Hold on, Stuart, you go too fast.

Did the drop in GDP cause the VMT to drop or the other way around?

There is some sort of relation between VMT and GDP increase, but unclear who does what, I would say.

The big drops in the seventies were caused by oil shocks.

As opposed to "oil shocks" in our short-term future?
Found the attached link at MotleyFool and the survey confirms my suspicions that driving behavior is more hard-wired that might even have been the case thirty years ago.  The survey finds that %15 percent would not reduce their driving no matter the price of fuel; another thirty or more percent would not reduce driving substantially if the price were $6.50. I do not know the details of the survey, which, of course, are important and significant mp;npu=y

I wonder how many people are switching to a lower grade of gasoline, i.e. from Super/Premium to Regular.  Last summer, after the hurricanes, a spate of newspaper articles came out suggesting that that could be done, in most cases, without any adverse consequences to your vehicle.  Anecdotally, I easily convinced a couple of friends to switch to Regular for their Audis and BMWs.
These kinds of surveys are all BS in my opinion. Talk is cheap. Who knows what people would actually do.

The other problem is, they only ask how much less they would drive if gas cost more. People always say they wouldn't drive less. But they never ask how much more people would drive if gas cost less. I'll bet people would say they'd drive quite a bit more if gas were a lot cheaper.

In this survey, people said they wouldn't drive less no matter how much gas cost. So we should ask, would you drive more if gas were free? And I'm sure the answer would be, yes, a lot more.

The first answer makes it sound like demand is inelastic, the second answer makes it sound like demand is elastic. It can't really be both. They should ask the question both ways and average the results, to get a better estimate of true elasticity.

Here's a thought that might bear exploring in an open thread, but since the topic has been raised I'll start here.

I read a lot of discussion about the elasticity of demand for gasoline, but it's all couched in terms of the economic driver.  That is, the only factor that is assumed to influence VMT or vehicle choice wrt to fuel efficiency is fuel price.

My interest, and one that seems very relevant to PO, is the role education plays in modifying demand elasticity.  I'm a case in point.  I could drive pretty much any car I wanted, within reason, and not worry about fuel consumption.  Even quintupling the price would be more of a financial irritant than an impediment.  However, education about either PO or GW seems to make people much less elastic in this regard, to the point that some of us stop driving for those reasons alone, not just the price.  This same mindset seems to be working in a number of my acquaintances.

Does anyone have any thoughts on the validity of this observation, and does anyone know if any research has been done on these sorts of factors?

Good question.

I'd say to that, look who's buying the Hybrids, who's putting PV up on their roof..  it might help them financially, and it might not, but it seems to be essentially done for prinicple at this point.  ( I think it will bear out economically, as prices rise )   For people to change their driving habits means a huge leap of faith.  I drive our daughter to a daycare 6-7 miles away.  Not much, but it's frustrating since I used to walk her 1 mile, at a different age.  But it's the right place for her right now.  Which part of her future do I sacrifice for another part of her future?

Demand elasticity will vary by person. There are many ways it may take effect:
  • car sharing
  • reduced shopping trip frequency
  • reduced leisure travel
  • substitution of public transport
  • walking
  • etc

Education does help, as does facilitation of substitution, but price is the most effective driver (sic). If you can afford a Ferrari then the price of gas is a trivial consideration, but what proportion of drivers can afford Ferraris? Extrapolate.

When does gas price pain hit you? $5, $10, $20? How about a shortage or rationing? Do they change your mindset?

Now imagine your wage is halved, or you lose you job, or your mortgage payment doubles.

Nah, don't be so silly, Agric, these things can't happen

I think that the correlation between GDP and VMT is secondary rather than primary. In 1974 when the first oil shock happened, high oil price initiated stagflation by high commodity prices while high oil price discourages people from using motor vehicles much. The similar phenomenon can be found in 1979 & 80 when the second oil shock happened. Except for these two occasions, both GDP and VMT have increased at more or less constant paces in the last twenty years. If you note figures of GDP and VMT change in 1982, GDP decreased while VMT increased.

The definition of GDP has changed over the year because the government has changed the rules of GDP calculation to show rosy GDP figures to voters. Also in the last thirty years the component of GDP has changed very dramatically. In other words the financial economy has increased very rapidly in USA. I would assume that most of financial economy depends on the activity of traders and bankers. I don't think that their activity is very dependent on motor vehicle transportation.

Once I tried to do the same analysis for Japanese data. However, I soon found out that this analysis is meaningless for Japanese GDP and VMT. Japanese GDP increase had stagnated between 1991 and 2004. However, the number of motor vehicles has rapidly increased since the late 1980's. Therefore in this period VMT increased very rapidly while GDP either increased slowly or even decreased a little bit. Japanese saving rate is high. And deflation had kept their wealth intact. Therefore Japanese could buy nice cars without much economic activity increase. Therefore the correlation between GDP and VMT in USA data is not fundamental bur rather specifically for the situation of USA.

I remember that about 70-75% of oil is consumed for motor vehicles in USA while about 35-40% is in Japan. Since Japanese have more options for transportation than Americans, it would be easier for Japanese to reduce VMT without affecting economic activity than for Americans. However, the difference between USA and Japan is relative rather than absolute. I am sure that there is some room for US economy to decouple with motor vehicle usage.

Obviously it is a two-way relation. There are 4 scenariuos and only the more VMT -> more GDP causual direction does not make a lot sense.

IMO the correct word will be requires - a certain level of GDP requires a certain number of VMT. If GDP rises you need more VMT to support it, if you cut VMT (oil shock) you will get less GDP. If you cut GDP you will also get less VMT.

If you extend that graph to January 06 though it should be up quite a bit, although obviously there's considerable noise from month to month.
You're probably right, but it's not clear it's meaningful given the weather anomaly in January.  Numerous commenters (when I originally posted that graph) pointed out that fuel economy is quite temperature dependent which probably explains most of the seasonal effects.  To be sure an improvement is meaningful, we'd need to see a trend for at least a few months.

I don't doubt that fuel economy will improve in response to the high gas prices.  I'm just pointing out that it hasn't really got going yet.

Here it is:  January is on the upside, but not to the point of being outside the noise.

January VMT declined in '04 and again in '05, only to surge back in '06 probably because of the warm winter. Interesting. I wonder how the rest of the year will fare.
Another thing I notice which is somewhat obscured by this graph is the year over year trend. The 2005 curve is above the 2003 curve in most places. So I assume that if you plotted this data on a yearly (rather than monthly) basis that we would have seen at least a small increase from 2003-2005 (not clear where 2004 would fit in). It would also be interesting to see the previous few years to see if there is a trend.
First of all, I said "over a year or more", not "a year".

Second, I said "gasoline consumption", not "VMT".  Some conservation from reduced VMT would surely play a part over time, but simply drving less aggressively would save most or all of the 10%.

Third, as for their being no change in the effective MPG so far: What would the fuel consumption and MPG have been had SUV sales not fallen off a cliff?  What will the effective MPG be as this buying trend continues?  As with VMT changes, a turnover in vehicles will clearly improve MPG over time, but in the short run a change in driving habits will provide a much bigger kicker.

Will people make these changes?  Push up gasoline prices enough, and they will.  Doomers (and I don't mean you, Stuart) keep telling us how PO will be an unprecedented event in human history, triggering economic and social armageddon, etc., but they never assume that people will take unprecedented steps in response.  My view is that PO is very, very serious, but that the actions, both collective and individual, we can and will take to mitigate the effects of PO and peak NG are just as formidable.

If the required steps are truly unprecedented, then why would anyone assume they'll be taken?  I look at the response to Katrina, and the state New Orleans is in, and I have to go with the doomers.  As far as I can see, the response to a smaller challenge than peak oil is that the wealthy get richer and everyone else gets screwed big time.  
Will people make these changes?  Push up gasoline prices enough, and they will.  Doomers (and I don't mean you, Stuart) keep telling us how PO will be an unprecedented event in human history, triggering economic and social armageddon, etc., but they never assume that people will take unprecedented steps in response.  My view is that PO is very, very serious, but that the actions, both collective and individual, we can and will take to mitigate the effects of PO and peak NG are just as formidable.

I believe you are exactly correct (although some people will certainly resist making changes - demanding that the government save them from high prices). In fact, I am working on a blog essay along these lines. There will be pain, and probably an unprecedented hit to the economy, but I believe we will make it through. I think it is great that prices are increasing before the peak, because it gives everyone additional time to change their behaviors before change is forced on them.


Everybody is focusing on the USA. USA oil consumption has increased at a compounded rate of .42% a year since 1978. Essentially flat. China's continued growth in oil consumption is the 500 pound gorilla no one is discussing. China will determine oil prices down the road (and oil depletion), not the USA.
Oh, China (and India) are both being discussed. They are a huge factor right now in the supply/demand imbalance. But my point is that since the U.S. uses so much more energy per capita, we certainly have the potential to cut worldwide demand by making changes as prices start to affect budgets. China and India will do the same. Just because they have aspiration to drive cars doesn't mean they will be able to afford it as prices escalate.

Make no mistake, I agree that we are in for some very difficult times. I just don't believe we are doomed. The current supply/demand imbalance, leading to higher prices, will push the peak further out.


Just a few points as my first post here.

  1. Fantastic site. Keep up the good work.
  2. My id shows you where I am and how I feel (Sitting Duck!!)
  3. The price of petrol here in Bombay is about USD4.50 per gallon (Rs,50.00 per litre) Been this way for about six /eight months.
  4. Our current economic growth does not seem to have been impacted with petrol at these rates.
  5. we are putting about 1 million cars per annum
  6. last moth saw the highest growth in sales of cars in the country. (will try and find a link)
  7. I would not be unwilling to pay 2 ot 3 times the current price of petrol. (drive about 1500 km / month)
  8. All our Rickshaws, Taxis and buses in Bomay, are run on CNG only. It is mandatory here.
  9. I would really like to see a live chart of the world petrol /gas prices color coded for rate of recent rise. This would help us to see where the prices are going. If all of us provide the info for our own areas it would be possible to keep a good record of the rises as they hit. It will also reveal stress points in the systems.
  10. I am now investigating ways to reduce my carbon footprint.

Just my 2 bits ;0)
It is a push-me pull-you world out there.

Many people do not have the luxury, at least short-term, to reduce driving much, but should they somehow manage to decrease driving enough to promulgate a significant percentage reduction in usage, then, given the nature of fungible markets, the supply will go elsewhere and the price will not be mitigated, particularly in a world where population continues to grow. In effect, that new population means a defacto increase in consumption, requiring new conservation. The cycle trends down from there. So far so good. Conservation is the goal.

But Americans may suffer disproportionally due to our enormous deficit and a world awash in our fiat excesses. Many countries, particulary in the far east, are waking up to this reality and they are already taking steps to multilaterally ease their pain.

I guess my main point is, there will be suffering no matter how you look at it. I am a doomer because I feel that the human propensity to cooperate is about as reliable as Microsoft Windows and because physics does not care what we do. A world defined by global warming is a system with mega-mega-mega tonnages of extra energy boiling up monster hurricanes and 351 tornadoes in a record tornado season that has barely started. That is some eight times the last highest number for this early in the season. The Ghawar's water cut keeps increasing and it is only a matter of time, a very short time, that the field collapses like the Yibal field did in Yemen. (Both fields have been using the same advanced water sweep and bottle-brush technologies for about the same period.)

I too wish that we could all just get along and hold hands and sing kumbaya and gently, gently lower the American behemoth of an economy into a swell post-oil paradise, but that is the kind of thinking that will cause the really intense pain. The belief that if we all stand on tippy-toe on the thin branch of human intent we can keep ourselves safe is a special belief often advocated by those who are heavily leveraged into the American dream -- too much to lose and not enough incentive to make the hard decisions.

What is it that Upton Sinclair said? I paraphrase at best: It is difficult to convince a man of a truth when his livelihood depends on his not understanding.

Happy talk, such as you might expect from George Babbit, is only cheerleading, not bread nor oil. We know where we want to get: a system that is stable and sustainable. Why not shoot for that right from the start? Why not use our fabulous intelligence and go-get-'em attitude to make it happen? That is the question that nags me. Everyone seems to agree that we live on a finite planet, but the arguments belie that fact. Technology is a product of cheap energy. Cheap energy is NOT a product of technology. So why do we think that building more widgets will magically slake the cheap energy thirst of an ever-growing population?


I am a doomer because I feel that the human propensity to cooperate is about as reliable as Microsoft Windows and because physics does not care what we do.

LOL, I wonder how this breaks down by platform.

(moderate, Linux user)

Last week, Ray Ozzie, Microsoft's chief technical officer, was quoted by the NYT as saying "Complexity kills."  Peak oilers are already using it for a sig.  

(The full quote is, "Complexity kills. It sucks the life out of developers, it makes products difficult to plan, build and test, it introduces security challenges and it causes end-user and administrator frustration."  Talking about why Vista is late, I think.)

That is precisely why I would have been perfectly content to use WordPerfect 5.1, which I essentially mastered 15 years ago while writing my Master's thesis, until the day I die.  Instead, I get relentlessly pushed along by the inexorable "progress" of increasingly, yet largely uselessly complex Microsoft programs.
I mastered GNU emacs 20 years ago (also during grad school), and I still use it every day.  There are some new features, but everything I could do with it then, I can still do now.

Free Software rocks!

That's what Joseph Tainter says about civilizations.


  1. Alternatives are a cruel hoax (for business-as-usual).
  2. TPTB are keeping PO card close to the vest.
  3. It's gonna be an 'interesting' (painful, etc.) decade going forward.
  4. We will see a wide range of unexpected and effective responses to dwindling BTU/day.

Open source kinda guy.
A nice summary - that's more or less what I think too.
Yup, that's pretty much "me too".

Our family has done a fair bit over the last year to reduce our energy footprint.

If there is a widespread collapse of mankind (which I doubt), I will be fighting tooth-and-nail to try and keep my family and myself alive.

Anyway, good to have the moderates speak up for a change!

We know where we want to get: a system that is stable and sustainable. Why not shoot for that right from the start? Why not use our fabulous intelligence and go-get-'em attitude to make it happen? That is the question that nags me.

I think that honestly we cannot proceed with these fixes because so very, very few people are willing to acknowledge that capitalism is a completely failed experiment. I have no doubt that they will when millions in the U.S. who were recently middle class are suddenly starving.

I believe that a wonderful human culture can live a fantastic life for many centuries to come in a sustainable system. However, capitalism **IS PREDICATED ON GROWTH**. Trying to keep the capitalism means having to keep the growth which means unsustainability, and extremely painful collapse.

I'm glad to see sustainability growing in support and familiarity to a broader range of people. Unfortunately, it is just a word if they cannot see that it is antithetical to capitalism.

We do have excellent options for economic systems based on cooperation and sharing (as opposed to competition and private ownership) that would make sustainability happen almost automatically.

"We do have excellent options for economic systems based on cooperation and sharing (as opposed to competition and private ownership) that would make sustainability happen almost automatically."

Errr - would you care to mention one such that's received a large scale trial?

I do wish I could. To work wonderfully, it would obviously take very intelligent and *compassionate* leaders and communities, which Stalin was not.

What has been tried honestly is capitalism, which is having the result of nearly destroying the planet's capacity to support human life. It is now time to honestly try a form of Marxism, which, as you point out, has not been tried.

Agree your assessment of capitalism. But I have doubts on 'real marxism' being an appropriate solution, I think change needs to be more fundamental. Marxism is based on collective ownership of means of production and in free markets it has been shown to be less efficient than competitive capitalist systems. My guess is a shift in more innate human values is needed. I'm not exactly sure what that would be but it will mean the overthrow of current economic reality (which is doomed, anyway).
The Andalusian anarchists were a good example. They "ruled" the south of Spain from 1868 to 1903.

Cooperative societies were also common in American Indian tribes, in all of the Americas, and I'm sure I could find other examples like the Amana religious community, the Amish, Mennonites, Quakers and many buddhist communities.

Most people are completely ignorant of the many alternative governing methods that have graced this earth because they have never been spoon-fed that particular history. The job of the public school system is to confirm the legitimacy of the current government and not to point out its flaws and the success of alternate systems.

A brief foray into history will quickly convince anyone with an open mind that our history is the history of the victors. Should Hilter have won, our school books would be touting his politics. If Soviet style communism had overcome our consumer blandishments, then we would be getting their version of history.

Well, I agree with that comment, I just don't think 10% gasoline savings is likely without pretty noticeable economic impacts.  Neither miles traveled or effective fuel efficiency has ever changed by more than a few percent in a year, and the large changes were always in the context of a big recession.

I'm of the view that it will take a pretty good-style recession to make people serious about conservation again.  

He means 10% in one year.  That is completely implausible.  Year-on-year gasoline consumption in the US has never dropped by anything like 10%, and drops in driving of only 2% have only come in the past with significant economic pain.  Recall this graph ...

Whenever anyone says something like "completely implausable" I'm reminded of that line form The Princess Bride ... you just think that because no one has ever done it before ;-)

Let's see ...

U.S. Finished Motor Gasoline Product Supplied (Thousand Barrels)

1978 - 2,705,308
1979 - 2,567,573 (-5%)

That's just one year, stretching it out ...

1978 - 2,705,308
1982 - 2,386,824 (-12%)

So we've never done 10% in one year, it's taken 5 years ... ah well, what's the point here, that we do it in one or that we do it?

Exactly.  I totally agree it could be done in five years.  Presumably the economic pain would be more-or-less similar to that in the period of 1978-1982.
It could be done in any time frame, actually.  What you are doing is assigning a probability based on past performance.  FWIW, I generalize the market saying that "past behavior does not guarantee future performance" to include things like this.

I agree totally with those who question why a unique change (peak oil) should behave like past markets.

Here's the odd subtly though.  I might join you in making a specific prediction, as the best possible projection from available data ... I just differ in the confidence I apply to that prediction.

In something as wide open as peak oil it is quite possible that the "best prediction" is still a "low probability event."

FWIW, I generalize the market saying that "past behavior does not guarantee future performance" to include things like this.
That's a great line. You could, in fact, build an entire philosophy of life around this principle.

As far as your point about predictions vs confidence: One of the nice things about the futures markets is that they not only give predictions, they give the error bars. JDH at Econbrowser showed the market's 95% confidence interval for future oil prices a few months ago:

The market is 95% certain that in 2010 oil will be anywhere from $14 to $251 a barrel. Now that's a heck of a prediction. I'll bet the TV shows would just be lining up to hire a pundit who gave predictions like that!

One of the most common human failings is overconfidence. People don't do that badly on predictions, but they're way too confident about being right. One of the great things about markets is that they are structured to overcome this flaw. As the example above shows, oil markets clearly do not suffer from overconfidence in pinning down future oil prices.

It is important to remember that the error bars themselves are based on past performance:

The quarterly value of s is estimated from the 1970-2005 experience to be around 0.16, meaning a forecast of the real oil price a year from now would have a standard deviation of 40.5 x 0.16 = 0.32-- it's not that uncommon for the oil price to change by 32% on a year-to-year basis.

I think the economists writing and reading things like that are taking it with a grain of salt.  They are smart enough to know that a projection based on the 1970-2005 experience is only valuable if (insert hocus-pocus) the world continues to behave as it has 1970-2005.

That's true, JDH estimated the 32% volatility based on the past decade's history. However there is another way to do it. You can measure what the market expects volatility to be in the future by looking at option prices and using a complicated formula, as he discusses at:

This comes out to about the same result, a 32% volatility. So the markets apparently believe that volatility going forward won't be much different from the past 10 years (which have actually had quite high volatility, when you consider that the price has gone from 10 to 70 in about six years).

Markets do not have minds, and cannot literally believe anything.  The hidden message is what the speaker means when he says "markets believe."

I think the rational observer is using it as slang, with the expectation that if markets believe anything today, they can equally well believe anything else tomorrow.

That doesn't stop people from reading the tea leaves, and applying post hoc explanations to the market's every new "thought."

You are hinting at somethings important but not leaping to their conclusion.

The MSM do portray markets as having rationale, minds, a queer kind of reason. They do it with a purpose: to make the markets a friendly and understandable thing to the naiive. It's 'personification', humans like it, check out their religions ;)

Whenever the various markets do something all sorts of pundits leap out and rationalise the move in a way that suits them. It is mostly post hoc nonsense.

I do believe that the markets move in mysterious ways, sometimes with uncanny awareness of what will come. I also believe that less visible hands are conjouring spells of significant power (money, as in repos, etc) that have fluence. Whatever ability the markets had for prediction has been sorely weakened by the fed-like shamans, you have been warned - the phase shift to reality will probably be sickeningly abrupt when it happens.

I notice that you often cite market futures as something of a reliable (more or less) predictor of the actual future. It seems to me that if you check the far-ahead (say 10 year) futures prices of a commodity like crude oil at various times in history that you will find the volatility of that futures price depends greatly on the current volatility of the market. IOW take a period of relative (!) stability in the crude market and you would find the 10 year future price maintaining close to the current price with a fairly narrow band of difference. On the other hand, in today's crude market, volatility seems high and futures predictions are pretty much anybody's guess. Hence the big spread. Altogether, I personally don't think markets predict things very well at all. I think they reflect current perceptions which are based on current volatility.
The future will be just like the present, only more so.  Just ask anyone.
An illustration, you and I expect a "crunch" like the 70's as a likely scenario ... what happens to a scenario if true gasoline rationing become politically viable?
Then WWII becomes the closest analogue.  GDP/mile more than doubled in the space of a year.  Not too close, however, since the US is a very different place now than it was then in the morning of the auto-era (like we still had all our street car systems in WWII). However, I'm sure we could accomplish massive changes with a rationing program, if things get bad enough to put that on the political table.
Picking a new analogue is a very human response ;-)
Excuse me, but as I pointed out on my site, and as Halfin alluded to, there was a (very) small drop in gasoline consumption.  So that number isn't skewed by lower heating oil use.

I know plenty about seasonal variations--remember, I'm one of the other card-carrying economists around here, with more time spent studying stats and econometrics than I care to remember.  I even have a minor in a foreign language: Greenspan.

It appears that what happened in January 2006 was that miles travelled went up a few percent, but that fuel economy was a little higher than usual (and went up more than driving went up) so gasoline consumption dropped slightly.  That's most likely due to the fact that vehicle fuel efficiency is somewhat temperature dependent.  Since there was no trend of increasing fuel economy at the end of 2005, we can't at this point rule out that January was simply due to the unusually warm weather then (which increased both driving and fuel economy, but the latter more than the former).  On the other hand, if fuel economy starts to go up a little more in the rest of the year, maybe we'll end up dating the beginning of the rise to January.  I don't think we can conclude anything about the trend at this point.
Stuart, why do you use such strange moving average periods such as 9 months and 13 months?? Whats wrong with 12months?
Well, if you want to center the window on the current month, and you used an even number of months, the  window would have to be asymmetric - extending more into the future than the past (or vice versa).  You can only use an even number if it's a trailing average.  I don't like trailing averages as much because they are offset in time from the data.
Could you humour me and do a chart with a 12m trailing and your 9 and 13m? Just for fun?
Me too; I could do with some humoring. I have always used trailing averages, but then I am a novice at statistical analysis.

Trailing averages are often used, but I don't like them because they don't go through the middle of the data, so it doesn't act as a useful smoothing function to help see the trend in the data.  As you can see, this one is lagging six months behind the action.

I am perverse. I must be, the 12 mth ma trail worries me more than the other curves. Perhaps my fossilised ma / curve / etc mindset just sees it clearer that way.

I do agree your philosophical preference for centered ma, and admit to surprise at my apparent preference for trailing, it could be because I have tended to use a weighted ma for things I have analysed.

Regardless, an upturn now would be a mite surprising, lol.

Thanks Stuart. Two thoughts, your centered averages are better at showing the data. But I also agree with Agric that in some ways the trailing causes more concern: it confirms the difficulty there will be in rising beyond this plateau.
Lou, I was a bit surprised at your entry about January oil and gasoline consumption being down becasue in my recollection the weekly EIA petroleum reports that come out at 10:30 Wednesdays have been showing small increases in gasoline consumption.  I guess I'm forgetting that there may have been some decreases in the January reports, or maybe the EIA updated the numbers later.  However, consumption seems to have recovered in February (up 2.6%), according to a recent story in Resource Investor:

Meanwhile back in the place that matters, American gasoline demand is still hot. To be fair in January it was not as hot as was made out. Revised figures from the EIA actually showed a fall in January of 48,000 bpd. So much for all the importance the market puts on those weekly inventory figures, myself included.

But now it is really picking up. February's gasoline demand was up 2.6% year on year, the strongest demand growth since April 2004. It is going to pull that light sweet WTI and Brent up by the nose. As a result the difference between Brent, in demand in Europe and the U.S., and WTI, mainly in demand in the U.S., has narrowed to 70 cents and less.

The easiest number to look at for me is the big one.  The total yearly gasoline consumption actually dipped for the first time since 1990:

2004 - 3,332,579 (Thousand Barrels)
2005 - 3,330,805

We can provisionally call that a hurricane effect, somewhat, but if we think hurricane prices are going to be repeated this year ...

Is it just prices?  The hurricanes caused actual shortages in some areas of the countries.  Not to mention those whose cars or jobs were washed away by the storms.

Though I suppose that could happen again this year, too...

I was leaving that as an open question, when I went from "hurricane effect" to "hurricane prices."

I've always tried to put no more than provisional explanations on past events.  Reading Nassim Taleb has reinforced my distrust of post hoc explanations.

So, I provisionally see an economic downturn associated with the hurricane.  I also see a large oil-burning response to the hurricane.  I see a lot of oil-burning mirgration following the hurricane.  How does it add up?  I'd be a fool to try.

It's easier to be patient and see what gas prices do to consumption this year.

(I've seen premium over $3 in my neighborhood for the first time since the hurricane.  The average price for regular has climbed here to $2.79.  Post hoc explanations for these California prices abound.)

My guess -- two hundred angels on the head of a pin.
Are you crazy?  197 at the most.
Why don't you keep your unconstructive snide remarks to yourself.  They're really irritating.  Some of us care.  If you don't, you can just not read.
I should have mentioned that I saw this huge SUV downturn, and hybrid uptick, in the same timeframe as the hurricane.  Do these signal a broader conservation attempt by consumers?  Things like tobr>cannot be isolated.  Certainly not with available data.
Broader conservation.  I bought a hybrid, and I am the perfect average Joe.  Exactly middle of the road.  I represent a broad segment of the US population.

If I do something, millions of others are doing or will do exactly the same.  We are the sheeple.  I know it might sound as if I'm being sarcastic, but I am dead serious.

Other stuff we average Joes are doing: compact fluorescent bulbs at home, biking to Walgreens for prescriptions & etc., adjusting thermometer, shopping local farmers' market more often, growing vegetables in the backyard, buying only energy star appliances, replacing windows, composting, paying more attention to what we reuse and recycle.

Believe me, the number of people who will be doing all these things will grow fast.

Oh yeah, we're also laughing at moribund doomers like Cherenkov.  We know he's way smarter than we are, but at least we're not always depressed.  We sheeple will laugh through the dieoff.  BAAAAHHH.
But if you read and post on this site, doesn't that make the idea that you are one of the "sheeple" rather oxymoronic?
I tend to agree, but I know of no way to quantify my uncertainty.

Well, actually I know of one way to reduce my uncertainty, and that is to trust longer timescales.  It is definitely fun to watch the data roll in (particularly this month's SUV sales data), but I try to remember that any one month (and possibly any single year) could just be "noise."

Another sheeple checking in here.  Three years ago I lived in a suburban 3500 sq ft McMansion for two with a BMW 5er in the 3-car garage, dedicated to a classic use-it-once-and-chuck-it lawnmower lifestyle.  Now I'm in a 1200 sq ft urban bungalow, drive a used diesel Jetta, bus to work, bike to shop, there are compact fluorescents in every fixture in the house, compost bins out back by the vegetable and herb gardens, and recycling bins in the kitchen.  I have Kunstler, Simmons and Tim Flannery on the bookshelf.

I am sheeple, hear me baaa.  We are waking up out here.  Power to the sheeple.

PS - I still think we're all doomed.  PO/GW packs a nasty knockout punch.  But I'm damned if I'm going to die feeling guilty for not trying.  And if only pockets of humanity are going to survive, we all need to make sure we have deep pockets.
Hello GliderGuider,

Good for you! Kudos and applause!  Please keep spreading the Peakoil Outreach to all you can.

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

Yes, we should honor individuals who are actively powering down.

I'm in the process now with a 1,100sqf small village house and low energy footprint lifestyle.

Hoping that everything holds together for the next year or so to complete the transition. No, I'm not a doomer, but reading the data and seeing the obvious patterns developing as prompted my action.

I wish you doomers would stick to your own threads. This one is managing to maintain at least some connection to reality, thanks to Stuart's excellent use of hard facts and figures.

You are being impolite.  You should be congratulating him for powering down, as I did.  Everyone is entitled to the  entropic energy beliefs of their choice. AFAIAC, as long as they refuse Denial and strive to understand entropy--that is 99% of the Peak Everything battle.

Bob Shaw in Phx,AZ  Are Humans Smarter than YEast?

Entropy is immune from belief. That is the main problem with many who claim that we doomers are hunkering down and just waiting for the fall. Nothing could be farther from the truth.

It is my firm belief that if you keep holding out some fantasy techno saviour, you will lull the population back into their consensus trance. Why do that?

We know there will be a transition. The only question is do we want to start now while we have X amount oil or when we have X-Y?

I want people to start now. Not one day later. The only way to do this is to either scare the bejesus out of them, use government forces to do it, or simply let the placid teeming masses caught up in Hummer dreams march towards the cliff. Oh happy lemmings!!

And, by the way, I am extremely happy. The path to happiness lies not in the great American consumer fantasy but in self-reliance and local action. Traits that used to be associated with Americans, but no longer. Now, we demand the free lunch, no taxes, no guilt, and all covered in a creamy helping of cheap oil. I like the old American way. This new way is far too liberal. Damned namby-pamby republicans and their love of cheap oil. The current overwhelming fiscal irresponsibility of the Republicans is wonderfully ironic and simply mimics the typical American's feeling that they have an entitlement to their solar spendthrift ways.

Unhappiness will come the way of those who place bets that counter the iron-clad rules of physics. Touch the fire, you will be burned.

Scaring doesn't work, only the sharp hammer blow will. Therefore all your doom post are doomed. But please keep on with your doomish posts, I like and appreciate them, the help me question and refine my perception and thinking.

I guess you noe (=intuitive know) by now that I share your bleak estimate of the future, Cherenkov. I don't think it inevitable, just highly probable unless we humans make the most massive change in our species history (and even that may not be sufficient).

Accept it: they are not going to start now. Even if they did there will still be great pain. Some mental phase shifts must happen, if they don't this species (humans) should die, if they do then we may survive to meet the next challenge.

Happiness has nothing to do with consumerism (that is just a clever delusion it would take me pages to fully explain), but nor is it very much to do with self reliance etc. Happiness and contentment are mostly an internal process, though having external aspects, it is quite easy for most people to be happy without the things they believe make them currently happy.

"That is the main problem with many who claim that we doomers are hunkering down and just waiting for the fall. Nothing could be farther from the truth."

And yet all we seem to hear from you guys is "Dieoff is coming, so sit back and enjoy".

Do you have any idea how damaging to the PO cause this kind of crap rhetoric is?  You say you want people to change, but you force them to view a future with no hope.  Why would someone decide to change their ways when they are told that there is no hope?

Worse still, this kind of wild scaremongery makes the whole PO topic look like it is backed up by a bunch of nut-jobs.  People will view your arguments the same way that we view the Abiotic Oil theory.

You want people to change now, but I'm afraid you have to realise that this supertanker called mankind cannot turn on a sixpence. If you try to turn the steering-wheel round with too much force, it will simply snap off in your hands.

We all need to apply gradual pressure in as many places as we can until the momentum builds and wholesale changes get the ship turning smoothly.

Anything else is a waste of time and effort.

Duh, Duncan.

That means applying that pressure NOW.

Don't put words in my mouth unless you understand the concept of sarcasm. Nothing is more disheartening than to have an argument with someone who lives in literal world. It's like having an argument with a child.  

My thesis has always been the change is coming and the sooner we do it on the best possible terms the better.

I would sure hate to scare someone standing on the train tracks and scream at them to get the hell off the tracks. Far better to whisper and make coy waving motions. Scaremongery is not a word, but I get the drift. The problem with calling someone a scaremonger is that the scaremonger must be drumming up fear over something that is not true. Either you are a cornucopian or just a someone who is not well versed in the art of argument.

Yes, it is a supertanker. DUH. But, if you want to turn the thing you better start now. I have even used this image before in my posts. The sad thing is you have read your thoughts into my message and mangled it badly. Another example of poor rhetorical skills.

Yours is an attitude that will sink the world -- the idea that we just need to sit around and figure out a new way to continue the old paradigm.

This is magical thinking on your part bub. Physics is not about your touchy feely weirdness. Physics just is.

The problem is one of credibility.  Those of you who believe (or say) we're all going to die look pretty unbalanced from the perspective of those of us who believe peak oil may well be soluble (with a good deal of pain).  And you no doubt look utterly insane from the perspective of someone in the mainstream.  So the mainstream reaction to your jumping up and down warning them is not going to be to take you seriously, but rather to conclude you're a lunatic and tune you out of further consideration.

I have yet to see anyone make the "we're all doomed" case with any kind of solid quantitative reasoning.  What exactly is the critical resource (or combination of resources) that will be limiting of the human population, how much of it is there, and how do we extrapolate it into the future in such a way that we can be confident there is no escape, and that no combination of innovations and substitutions can solve the problem.  I've never seen anyone even try to make an argument like that.

All I've seen is handwaving - English professors telling us that they have the true understanding of the implications of physics (without writing any equations...), or laywers telling us that only their understanding of sociobiology can lead us to a correst assessment, and the rest of us must be idiots for not seeing the truth as clearly as they do.

An important (to me) way that I judge people is by their "permeability to evidence".  That is the human tendency to change their views when contrary evidence shows up.  People who are deeply stuck in some psychological script of their own (often from childhood experiences, but sometimes from a societal paradigm) that they aren't conscious of see the world through some kind of distorted lens that makes it very hard for them to absorb any evidence that will change their mind.  Some are rabid optimists and cannot accept that anything bad can ever happen to human beings.  Others are rabid pessimists who feel that we're all doomed and there's nothing that can be done about it.

The appropriate reaction to a new piece of evidence or a new possible technique is a sense of curiousity, and a desire to know more about it to see if this changes the picture or not.  If instead, you find that your first reaction to a new piece of evidence or technique is a sense of discomfort and a casting about for ways to discredit it, that suggests that your permeability to evidence is rather low.

I think people of low evidence-permeability are not helpful in solving problems.  Regardless of the particular script they are stuck in, they make things hard.  They burn witches, ban books, commit genocide, fly planes into buildings, invade countries for false and foolish reasons, ignore and deny important problems until very late, and then make unsupported pronouncements about the solubility or otherwise of those problems.

Hello Stuart,

Please read my post of Tues APR 4 @12:20 EST on the thread "NYC: Best Place for $100 oil? Maybe..."

Your quote: "An important (to me) way that I judge people is by their "permeability to evidence".  That is the human tendency to change their views when contrary evidence shows up."

Now I am no computer guru nor a statistician, but I too agree with your quote.  I am going to try & see if there is some way to quantify the concepts briefly described in my posting, but it seems intuitively obvious to me. I gonna flail away....I shall return.

On another forum, I generated a posting with a huge number of ratios and variables that hopefully could be used to predict Duncan's Olduvai Gorge, but nobody volunteered to statistically evaluate it for me. Yet, I suspect the CIA/NSA routinely uses supercomputers to generate all kinds of scenarios and wargame simulations.

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

Hello TODers,

Just a quick glimpse at some of the research directions I hope to be heading to: KAROSHI, Death from Overwork.  I believe as the downslope really kicks in, there will be a massive shift to increased hours of manual labor to replace the luxury of machines [optimistically? thinking society will still prefer work to violence].
The first case of karoshi was reported in 1969 with the death from a stroke of a 29- year old, married male worker in the shipping department of Japan's largest newspaper company [1]. Karoshi can be translated quite literally as "death from overwork." The major medical causes of karoshi-deaths are heart attack and stroke, including subarachnoidal hemorrhage (18.4%), cerebral hemorrhage (17.2%), cerebral thrombosis or infarction (6.8%), myocardial infarction (9.8%), heart failure (18.7%), and other causes (29.1%) [2]. The Ministry of Labor began to publish the statistics on karoshi in 1987, as public concern increased [3]:

For example, a big life insurance company investigated 500 male white-collar workers in top-ranking corporations in Tokyo. The report shows that 46 percent of respondents were anxious about their own risk of karoshi. A quarter of them experienced complaints from their families related to anxiety about karoshi. Around 5 to 20 percent of the workers themselves were afraid of the high risk of karoshi. This fear increased with age. The report also shows that family members are much more afraid than the workers themselves. Nowadays, there are almost no workers who do not know the word [karoshi]. Many Japanese workers and their families are anxious about karoshi.

There are no epidemiologically sound estimates of the prevalence and incidence of karoshi. Until recently, there were 20 to 60 deaths each year from overwork for which the Ministry of Labor awarded compensation. However, critics state that the number of people the Ministry compensates for such deaths is much less than their actual occurrence [4]. The overall number of deaths related to cerebrovascular or cardiovascular disease in the 20 to 59 age group is around 35,000 per year according to vital statistics data. Kawato estimates that one-third of these are work-related, or more than 10,000 each year [4]. In 1994, the Japanese government's Economic Planning Agency in the Institute of Economics estimated the number of Karoshi deaths at around 1,000 or 5 percent of all deaths from cerebrovascular and cardiovascular disease in the 25 to 59 age group [5].

This is all occurring during the cheap energy upslope when optimism reigned in Japan.  Will this deathrate triple, quadruple, quintuple, etc, on the Hubbert Downslope?  How will Americans, already in poor physical health, medically react to a massive increase in arduous labor?

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

A massive increase in manual labor might be a good thing for the health of Americans, since we are becoming obese at explosive rates currently.  According to the Community Solutions Video, Cubans lost 30lb on average when Cuba lost 50% of its oil supply, which can only be good for their health (the video emphasized the improved health of Cubans, actually).
500 male white-collar workers in top-ranking corporations

Office workers! Exactly the kind of jobs that are most likely to disappear post-peak.

And it's not what I call "arduous labor". I use arduous labour in my graden to relieve my stress.

The kind of stress that office workers deal with is very bad for your health. Deadlines, office politics, and other workload factors signal the body to produce adrenaline, the "fight or flight" hormone.

But we can do neither of these in an office situation.

After prolonged stress levels, the adrenal glands become exhausted and the brain signals the release of the hormone cortisol.

Together, this prolonged mix of toxic chemicals takes an incredible toll on the body.

Another reason why a post-carbon world will be better for us.

Stuart is right on. Doomers would have more credibility if they focused on nations who have survived PO-like situations:

Switzerland and Sweeden during WWII

Cuba post USSR

Russia post USSR

It is hard for my brain to go from Stuart's wonderful fact-based graphs (crack for PO'ers) to opinion-based Doomers.
Very helpful are the powerdown stories.

Very well-stated! A+
I agree completely.  We all have our opinions of what may come, but must one be open to the evidence, whatever it shows.  I certainly have ideas about what I think is going to happen, some strong and others not so.  I have to go with what I see, but I have been quite mistaken about several things already.  For example, I moved my 401K from stocks to bonds a couple of months ago, as I thought I saw signs of pending problems - I've gotten trounced in that move.  

And as far a preparation for the coming future goes, I think the single most important skill is to have an agile mind.  The faster one can recognize and adapt to changes, the better off one will be.  If you are preparing for a future that is not going to happen, you are at an extreme disadvantage.

I'm stunned. This is the best summary of the credibility problem I've seen. I also call it s flexibility of views - which is a derivative on the level of conciousness.

I can just add the following: it is normal that at the moment you receive new information contradicting your current views to you resist accepting it. Denial is the first reaction to anything chaning the status quo. But if you are critical and inquisitive enough you can overcome that phase and actually expand your views and correcting them eventually after some iterations (in TOD for example). The most important and hardest point is to identify yourself being in denial, after that it is easy.

"I've never seen anyone even try to make an argument like that."


How about Catton?  He makes a pretty compelling case that we're living on ghost/phantom acreage, either importing food from somewhere else, or consuming sunlight from somewhen else, and that since we now have a population dependent on a spectre, as it disappears, so must many of us.  Tie in what Lester Brown has to say about water depletion (even though aquifers recharge, we can tax them well beyond that rate, and suddenly have an unsupportable situation when we need 90 units of water, but the recharge rate is only 10...) and the whole energy/water/food equation seems highly unsustainable, and as much as I appreciate and practice conservation, efficiency, renewable and organic approaches, it seems pretty clear that even in concert they can't replace the "productivity" that fossil fuel and fossil water extraction temporarily has allowed us.

Permeability of Evidence

I have studied (informally) the impact of Urban Rail on cities (mainly US but also others).  I had concluded (say in early 1980s) that it was "enough" to build a decent Urban Rail system in a growing city (shrinking or stable is another matter) and it woudl start to grow around it.  TOD (the other one) woudl entice growth there.

Seems to be working well in Dallas & Portland, less so in San Diego but sort of, etc.

That was the limit of my ambitions.  In New Orleans, the "next" streetcar line.

Then I clued into electrified intercity frieght (with some pax) railroads.  An easy solution taht made sense.

I still see building all of the "on the table" Urban Rail that cities want + electrifying major railroads as Step 1.

New cities will want Urban Rail when others get theirs IMO.

But is this "enough" ?

Add hybrids, small diesels, less plastic waste, more bike lanes, and other easy steps.

Closer for sure.

Tar sands, coal to liquids, remote natural gas to liquids, ?


I do NOT know if this strategy will work out for the next 20 to 30 years.  More may be needed.  The number of unknowns exceeds the number of knowns, which makes for an insoluable problem.  The number of assumptions required for the unknowns in order to find a solution is so large that some are surely wrong.  So I see Peak Oil as a "wrestling with jello" problem.

However, I am quite clear about what needs to be done in the next few years in the US and will concentrate on that.

Duh, Duncan.
Come, come Cherry. You can do better than this! Writing like a teenage girl is not very becoming :-)

That means applying that pressure NOW.
Ya don't say! And I thought we had to do it next year! Silly me!

The sad thing is you have read your thoughts into my message and mangled it badly
Which is something you seem to be very good at:
Yours is an attitude that will sink the world -- the idea that we just need to sit around and figure out a new way to continue the old paradigm.
Please point me to any comment that I have ever written here on TOD which states that everything is just fine and we can carry on with business-as-usual.

You see, this is the trouble with your kind of attitude.

It's the "either you're with us, or you're agin us".

I do not buy your mankind collapse arguments, therefore I must be a cornucopian, business-as-usual, energy-hungry consumer. QED!

Masterful reasoning, Cherry!

We're not all statisticians, Halfin.  It seems to me that the point of producing data like Stuart's is not just to get the numbers right, but ultimately to have an effect on the world and the behaviour of those in it.  My contribution to the quantitiative side of the discussion is necessarily limited - I'm not a producer of this sort of information, I'm a consumer of it.

The aggregate of the analysis I've seen on this site over the six months or more I've been lurking has validated the shape of Stuart's graph and the story it's telling - the Peak Oil plateau is here now.  That appreciation makes reacting to the data (as distinct from further validating it) a matter of some urgency.  My contribution, therefore, is to assure those of you crunching the numbers that your efforts are having some effect on people, and thereby to encourage you to keep doing it.

The numbers exist not of and for themselves, but to goad people to action.  Whether I'm a doomer on the global scale has little significance.  The important thing is that the numbers are now believable enough that I'm willing to make real-world changes in my life because of them.  I'm convinced that the more of us that do do so, the more of us will survive, which is a far cry from throwing up my hands and wailing "All is lost!"

I am beginning to measure how close we are to PO by the level of tension and frustration in my social environment.  As displayed in recent threads here at TOD, that level has risen markedly in the last month or so.

This pattern is also repeated in my work environment as of late.  People are on edge and quick to start a conflict for unfound reasons.

Of course, staff reductions and work reorganizations do not help.

Just an observation.

There is certainly more tension on TOD lately, but then the number of posters and comments are going up a lot too.  I have always found that as any organization increases in size, the noise level eventually gets to the point where it is unworkable.  Anyway, I'm not sure if what your seeing on TOD is due to impending problems re PO, or just due to growth.  

There is a general tension among people I know as well, a sense of things going wrong.  I think it is more due to economic and political concerns.

I attribute it more to the obvious signs of entropy in our daily systems.  Things that used to work fine, aren't working quite as well any more.  Yes, they are due to economic and political concerns. But what is causing the economic and political concerns.  The slow realization that we can't hold it all together like we used to.  Some systems that required cheap energy to maintain are being forfeited in the name of cost-cutting.

This could be something as subtle as less people at the call centers causing longer delays when trying to get assistance for troubleshooting an issue with your PC.

Just a little more frustration thrown into our daily lives because the company could not afford to keep the call center staff it did a year ago.

This planet needs more sheeple like you ;)

And you have probably made more change in three years than most puffed up enviromentalists.

So, what made you change? can we 'bottle' it and infect other sheeple with it?

Why are you awake?

Stuart's "permeability to evidence" played a big part, but circumstances supplied the rest.  I don't recall where I first heard the term "peak oil", but I do recall that I had to go searching for information on it back then.  I'd read "Limits to Growth" and essays on Malthus back in the '70s, so I was primed with the underlying concepts.  From that perspective a lot of us ex-hippies will be fertile ground for the Peak Oil proselytizers, and the meme is now mainstream.  There's been a lot of progress on that front in the last couple of years.

In terms of how to get the message out to the marginally receptive, words and numbers won't do it on their own.  We're a visual species, and the one mechanism I've found most arresting is charts and graphs.  Every time I see one of Stuart's big green graphs I stop and read very carefully.  I've had more "Oh shit" moments from looking at graphs than from anything else.

One more thing that the movement needs to do is to develop a succinct sound-bite to counter the notion that it's the all the fault of profit-gouging oil companies.  People notice the pump prices, but as was said earlier, their initial reaction is usually one of "damn oil companies".  While it doesn't help that ExxonMobil is now the richest company on the face of the planet, we know that PO isn't their fault.  I'm still trying to find some way to get this notion across to others without having their eyes glaze over.

And one more comment about doomers - there's a subtle but huge difference between "We're all going to die, nothing can be done", and "The scale of the problem is so vast and its implications so severe that many of us will probably die.  We need to minimize that number as much as we can."  This probably shouldn't be the first concept you hit a prospective PO convert with, though...

I like charts and graphs, too, but not everyone does.  In fact, it's my experience that many, perhaps most, Americans cannot understand graphs.  Those of us in sci/tech fields use them so often, we tend to forget that others do not.  

Different people use different methods of communication.  I suspect most of us are trying to help, and we spreading the word in the way that worked for us.  For some, fear and apocalypse is the best way to reach them.  You have to admit, it draws attention that dry charts and graphs do not.

I'm not familiar with your particular species of sheeple, sir.  The ones in my area aren't nearly as enlightened as you seem to be.  Blaming the oil companies is the usual behavior.  If you're really up to speed here you might think that ethanol will save us.  Noone really understands the concept of powering down here in the world capitol of ignorance.
Various observers may have noted how large a part Urban Rail played in the plans for a new New Orleans.  Next to restoring our wetlands and decent levees, they were the #3 priority.

I was part and parcel of this planning effort.  The attitude of ordinary people of New Orleans attending these planning sub-sub-committees was QUITE positive again & again.

We "Get It" here and asked for $3 billion in new Urban Rail.  We are likely to get only $1 billion now, but the die is pretty well cast.

I may never travel to New Orleans, but I still have to say, Thank You, Alan.  You're doing very important work.
The switch from SUVs to hybrids must be negligable on the whole. US SUV/light truck sales contracted by a mere 0.8% in 2005 to 9.3 million cars (minus 75000 roughly), according to Autodata.

At the same time hybrids had a record year with sales of 0.206 million cars representing 1.2% of the total passenger car sale of 16.95 million.

The effect of using the more fuel efficient of your two cars must be bigger, in the short term.

Stuart that moving average surely was a good idea, amazing how these things behave so well. Not only we have this kind of curves at a large scale, but also on a small scale. We are probably contemplating some kind of fractal phenomenon.

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.

From perusal of the three data sets, EIA, IEA and JODI, I conclude:
  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.
Can anyone do better than a guess as to why things should be so?
Interesting!  I've never cross-checked production for OECD countries.  I'll put it on my list to investigate some time.
I would be very interested to see some informed estimates as to how large are the margins for error in series of reported data on oil production.

In the data with which I am most familiar (estimates of current velocities in oceans and harbors, population estimates, various kinds of sociological statistics, economic data published by various government agencies, and especially by the Federal Reserve System) the margins for error are frequently far larger than are realized by people not in the business of collecting and analyzing and adjusting the data.

For exapmle, you have to have considerable training or education or experience as an economist or statistician to be able to separate noise from information in GDP data. Few business journalists have the expertise to understand the data they comment on at great length. Getting accurate and valid data is enormously difficult and rather expensive--and sometimes impossible. Relatively few people--and even a relatively few Ph.D. economists--have the skills needed to do a worthwhile analysis of, for example, data published by the Fed. (However, I suspect that Lou G. is one of the few.)  

Amen, amen, amen.
One of the things that frustrates me about most economic time series is that they don't quote any error bars for the data.  Eg it seems very clear that the inflation statistics have, at best, significant uncertainties if not outright biasses that make comparisons across large time intervals very uncertain.

As to oil statistics, they're even worse.  There are clearly significant errors, they are clearly systematic (at least in part) rather than entirely random, and we have no way to estimate how large they are.  I don't know what else to do than investigate most questions from multiple sources of data and hope that when all the data sources agree, there's most likely a real effect.

If you are correct that oil-production time-series data are more prone to error and uncertainty and lack of precision than are inflation statististics, then I do not know whether to laugh or cry. About those statitistics I know plenty, and a pinch of salt will not do--maybe about five pounds to a gallon . . . or thereabouts when trying to do either the GDP deflator or the various versions of the Consumer Price Level index. Briefly, if there are three digits, the first one on the left is probably right;-)

The right-most digit is almost always always "wrong."
The middle digit may be correct or only off by one about half of the time, depending on exactly which chunk of data and what time period one is looking at.

Despite these limitations, the data are extremely useful for understanding what is happening, how fast things are changing, and what monetary and fiscal policies might be appropriate.

Good job as usual, Stuart,

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?

Insightful comment.

How much energy does it take to run a stripper well, with all logistics of getting it to market included?

I agree that in the future a much greater percentage of our petroleum energy is going to cycle right back around to obtaining petroleum energy.

Can the market ever tell that a well is consuming more energy per barrel than is contained in a barrel?  

This is particularly true of sour crude which requires a lot of post well processing.  Someone explain to me how the market watch dogs this equation.  Seems to me high dollar values on crude will will be favored over EROEI if any other form of energy can be used in the refining and distribution steps.  I can imagine a net negative return on energy, to create liquid fuels and we would still be doing it.

Hello NC,

Thxs for responding.  Yeah, it is 'negative efficiency' in the extraction system; a direct, but hidden process loss of energy!  Like a polar bear burning the equivalent of 1.25 seals trying to catch just one seal to eat.  Polar bears rarely drown [it requires being injured by a walrus, killer whale, etc], the bears just become exhausted and spent trying to reach the foodsource on the ever-shrinking ice floes.  Then they drown. Entropy rules all!

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

I doubt that any conventional wells will ever go negative. In nearly all cases, the cost of the energy invested is obvious - or, to put it in other words, the combined cost of energy plus labor plus other inputs must be less than the value of the energy produced. Only in cases like canada, where the ng burned to process the 'sands' is stranded and therefore 'cost free', or of no value, might the energy consumed approach the energy produced.
All wells go negative. Else they would run forever.
Wells do go negative big time. Picture running a 250 horse power submersible pump for 5 barrels of oil per day. Trading electricity for oil, but not enough oil for the electricity invested.

In a less extreme exampe a well might appear to be economically viable even where the electrical power used to run the pumps was greater than the net energy represented by the crude oil produced [where because of pricing mechanisms the electricity costs less than the crude produced.]

You are however correct that a lot of other stripper wells do not go negative in a pure EROEI basis. They go negative economically before they reach that point because royalties [to the mineral rights holders] and severence taxes come off the top before an operator can begin to cover expenses. When a well starts to bleed cash with no prospects for further upside, it gets shut down and due to ground water considerations it gets plugged.

 A great many US stripper wells were plugged and abandoned during the period that prices held at the $10 to $15 mark. Now that prices have increased fourfold those wells would be economic; however they are no longer available unless redrilled.
Been there done that. Some estimates ranged up to one million barrels of oil per day shut in during the last oil bust. Some of that is back in production but wells representing hundreds of thousands of barrels per day of settled production were plugged and abandonded. This probably doesn't seem like much to many on this site, but truly low prices resulted in ugly supply outcomes beyond deferral of new projects.
To which I should have added: ... and these wells won't be redrilled for production from the zone which was previously produced. Assuming the risk and the expense of drilling a well for the portential to make five to seven barrels per day of initial production makes no sense if the target zone is much over a thousand feet sub surface.
In regard to US imports, I looked at the past four weeks versus the same time period last year, and we are down 3.6% year over year.   As I have previously pointed out, we have no way of determining what percentage of imports and of crude oil inventories consists of light, sweet versus heavy, sour. IMO, the markets are sending a price signal that the US needs more light, sweet crude oil.  

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

West Texas, did you see my post on Friday below? Your number is wrong: it should be 1.7% not 3.9%. Big difference.

Hi West Texas, sorry to be pedantic, but I checked your link and I think the EIA is right. Your figure of 10,245 kbpd is correct, but only for the last week in March 2005. The 4 week average for March 2005 is more like 10,049 kbpd. So, apples to apples, the reduction in gross crude imports is 1.7%, year on year.

However, I agree with all your points: the trend is down and given the increased income of the exporting nations, their consumption is likely to increase and hence their exports to decrease.

The website has average daily oil imports into the US, on a weekly basis.  

The average for the past four weeks of 2006 (all falling in the month of March) was 9,879,000 bpd.  

The same website has the average daily oil imports into the US, on weekly basis, for four weeks in March of 2006.  That number is 10,244,500 bpd

10,244,500 bpd - 9,879,000 bpd = 365,500 bpd

You have been looking at the four week moving average.  I am comparing weekly numbers to weekly numbers, and then averaging over comparable 30 day periods of 2005 versus 2006.

365,500/10,244,500 = 3.57%

We have historically high spreads between light, sweet and heavy, sour.  We have historically high (nominal) oil prices and we have falling imports year over year.  I think that this is a sign of things to come.

Should read:

The same website has the average daily oil imports into the US, on weekly basis, for four weeks in March of 2005.  That number is 10,244,500 bpd

The noise is easily larger than this.  I don't think you can conclude anything from a single comparison like this.  You've got to look at the larger trend (which doesn't support your point yet IMO, though it may in coming months).
Re:  Noise

I would agree if we were at 40% of Qt worldwide; however, I think that production declines and import declines are potentially far more significant after 50% of Qt than before 50%.   And as I have pointed out, net export capacity is going to be squeezed from two directions, by falling production and by increasing domestic consumption, which is why I am paying so much attention to the year over year import numbers.

I think that these small import declines are like a small cascade of pebbles falling down the mountainside--right before a massive landslide.

Westexas, thanks for explaining your numbers. I will grant you 3.7% (but not 3.9%!) if the EIA's weeky numbers from your quoted site are right. Weird that their 4 wk avg summary here is wrong...
I take it back -- 201 angels on the head of a pin.
The point of discussion wasthe potential for negative eroei.
westexas, are you looking at imports of crude plus refined products or crude only?  Going forward, I think you will be better off looking at crude plus refined products, as Stuart's  graph does, because of the outsourcing of refining.  Jim Jubak over at MSN recently wrote that
But the oil-producing countries of the Middle East are about to go on a refinery-building boom that, according to energy consultants Wood Mackenzie, will boost refining capacity in the region by 60% over the next 10 years. OPEC members alone would increase their refining capacity by 50%.

A story about global warming and oil production:

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.

There are many more in this vein, which make clear the negative implications for biofuel and food production. A few  of these are the following:

Climate Impacts on Washington's Hydropower, Water Supply, Forests, Fish, and Agriculture  (scenarios)
    Impacts of climate change on Washington resources

Potential Impacts of Climate Change on Agriculture and Food Supply (Consequences 1(2), 1995) (a bit dated)

Let It Reign: The New Water Paradigm for Global Food Security

Can irrigation be sustainable, (Crop Science for addressing water scarcity Symposium, 2004)

Water in a Changing World (2001, RB Jackson, SR Carpenter, CN Dahm, et al., Issues in Ecology)

Thanks for posting that Leanan. I woke up to that story on CBC radio this morning and had been meaning to find more details. I agree with your observation about choosing between competing water-intensive end-uses in a water-constrained region. The population of Alberta is exploding at the moment due to the wealth that oil brought. Water demand (domestic, agricultural and oil patch) is exploding with it, which is bad enough for Alberta, but even worse for the other prairie provinces (and the Northwest Territories) downstream.
Here are the EIA numbers I downloaded for the first 3 months of 05 vs 06 on crude, gas, and distillate

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.

These are telling statistics on where we get our gasoline.  Much more is now imported.

I suspect much of this is due to loss of refining capacity from Hurricanes in the Gulf.

So the U.S. hasn't changed its consumption of gasoline, just the source.

So unless a whole lot of offshore excess capacity just came on line, who over seas gave up gasoline so the U.S. market could have it?

No shortage in the U.S. does not mean no shortage worldwide of a fungible product.  The highest bidder can always maintain his supply.  He will never see a shortage until everyone else has 0 supply, if he is willing to outbid everyone else.  

If this is what is happening, how long can the U.S. economy outbid all other economies?

Didn't see your comment until after I'd posted mine (below).

Totally agree with you - this is the real story now.

Not necessarily. As I recall strategic stocks of refined products including gasoline were released through IEA by a number of countries to deal with the Katrina / Rita problem. I have no idea what capacity refineries have worldwide to make this up or indeed if these stocks have been replaced. The question might arise, if GOM gets a Katrita on a regular basis, whether there will be releasable stocks overseas to make up the difference. As was pointed out on TOD these are strategic stocks not intended to be a regular "buffer" like say NG storage. Clearly if refinery capacity is taken out by whatever event then world refined product prices will rise until either the capacity is restored (and this seems to be taking a lot longer than anticipated in GOM) or demand trims. There is a further issue of quality. The US requires many different grades of gas and diesel by law. The rules were relaxed to allow the imports to be used in 2005 as non US refineries naturally produce to their own standards. If there is no "emergency" then gas / diesel available in say Rotterdam spot market may be unuseable in US.
I agree with your assessment.

However, if there has been a loss of refining capacity worldwide and it is not replaced than my argument holds.  Someone else is doing without gasoline so the U.S. can have it.

I find it hard to believe there was a large surpluss of gasoline that could be purchased on a daily basis.  Expensive gas, either from lack of crude or just lack of refining capacity, keeps poor countries from purchasing gas.  

This feeds back to the supply/price ratio indicating what the ROI would be to build more refineries or get more crude.  If poor countries can't afford gas above a certain price there is no incentive to try and make it.  Clearly this speaks to the price of refined products.  For one reason or another they are getting more expensive.  

High price is driving out buyers, just not the one who is consuming the most.  Since the U.S. consumes almost 25% of the worlds oil we should be the one curbing consumption.  This won't happen as long as price impacts our buying habits last.

The analogy I think of is to water in the southwest.  I have seen this example first hand.  Golf courses use an enormous amount of water per person.  In areas that had water rationing they crank up the price but often have contracts to deliver water to all customers if they want it.  So the price of water goes up in an effort to force conservation.  What happens is the poorest people stop taking showers to save money but the golf courses don't change because tourists can afford higher greens fees to pay for the water.  There was actually more water being used on the Golf courses during drought than before.  It was drier and hotter so more irrigation needed.  

There was very little net change in water usage just on price changes.  It just went to other places.  The only solution was to break the contracts on delivery with the water districts regulating how much water users could get.  This was a large financial problem for some owners of grass that couldn't survive without irrigation.

Agreed, and the grass owners were probably mad at the water company. As has been a recurring theme on TOD we don't yet know what oil price translated through to gas, diesel etc will force significant conservation on the main users, the developed world. Out of sight it is already working on most of Africa but until the "showerless" you mention become "gasless" on a sufficient scale to do political damage little will be done. Gas rationing will have more people up in arms faster than almost anything I would guess. It is the basis of capitalism that "you can have it if you can pay for it" thus a lot of American (and other developed world) voters will have to be squeezed out of their gas before rationing or other forced conservation measures will be acceptable.
These figures show why looking at just US crude stocks and imports doesn't show the true picture anymore. Refining constraints have led to a sharp jump in product imports. For the past four weeks product imports are up over 32% y-o-y, even higher than the 3 month figs you've posted.

The US is now running a huge 'energy deficit'. Adding up crude oil, natural gas, LPG, fuel oil and petroleum products from the trade releases, in 2004 the deficit was $185bn. In 2005 this rose to $258bn. Jan 2006 was $25.4bn vs $16.8bn in 2005. The 2006 deficit might well be over $300bn, even if all the refinery capacity is brought back online.

The  deficit is the same regardless of where our products are refined. The cause of the deficit is simply that us wells no longer produce what we wish to consume.
Chris Skrebowski's Megaprojects update 4/2006 is out and - together with my comments and a graph - available as a download (PDF file 112 Kb of pages 28 to 31 of Petroleum Review) at:

Thanks very much. We could get a hint soon how seriously to take the lion's share of these capacity additions.
Unless the Haradh project with its 300 thousand barrels is reflected in production statistics (wherever we should look for them :-)) perhaps one shouldn't count too much on the further 4 mb promised by Aramco for 2007-13.
Another "thank you". I've been waiting for that.
His analysis seems optimistic to me. He only considers a "capacity erosion" (what I believe to be field in place decline) of 1.5 to 2% per year going forward, and doesn't provide any support for this number as crucial as it is. It seems from postings here that a number around 5% would be more accurate, which would completely wipe out the gains he suggests and instead put us into a decline scenario starting now. If my interpretation of this is wrong, I am open to clarification. Again we encounter the focus on new supplies with a terribly inadequate evaluation of declines countering these gains.
The decline in existing fields in the Megaprojects analysis accounts for infill drilling and similar measures used to maintain production levels in existing fields. Earlier versions of the megaprojects update explain exactly how he gets the overall decline figure (which is extracted from historic data IIRC).
Right, I've had time to review in more detail his past and present analyses and clearly he is not talking about field in place but country-based production.

I still wonder, however. First, while he acknowledes the peaking of Mexico and other countries now and in the very near future, he doesn't go into any detail about how he factors them in (while in his analysis new production is very detailed). Some have suggested that Cantarell by itself would take up to 2 mbpd off the market by the end of his study. He also only subtracts world capacity from countries/regions clearly past peak (N. Sea, etc). However, the peaking and decline of Ghawar and Burgan (producing together equivalent or more than the entire North Sea) have profound implications for the whole world that I do not believe are reflected at all in his analysis, since he's not considering S.A. or Kuwait as declining producers. I believe we are at a great historical discontinuity in the production of the largest of the megafields, with most peaking last year or this, meaning historical data will not adequately reflect the impact of their decline.  I don't have the answers, I just think these are clear concerns that are not taken into account in his numbers.

Overall, I think his work is a very fine and valuable contribution.

I know, I know, I agree, I saw. But let us enjoy one last summer before TSHTF. I make a strange ostrich but I would take one last summer rather the the immediate effect of reality and all that implies. Sorry, illusion is not something I would normally argue for but a few months before the dark days to come would be nice.

FIP decline of 2% is probably very silly, 5% would be nice, more, perhaps 10% and more for some, is plausible. You are right: FIP decline is absolutely critical. Now go enjoy your last summer.

I think we'll have most of the summer - but it is not the oil decline (directly) that will screw it up.  August / September may be a bad time.  
He only considers a "capacity erosion" (what I believe to be field in place decline) of 1.5 to 2% per year going forward, and doesn't provide any support for this number as crucial as it is. It seems from postings here that a number around 5% would be more accurate...

Don't confuse the rate of individual field decline with the overall decline rate of all existing fields.  Even if we assume that a particular field is declining at 5%, 10%, or more (or, in a more extreme case, that all fields, when declining will decline at rates of 5%-10%), it cannot be inferred that sum of all existing fields (some of which are increasing in production, some of which are level, and some which are declining) will add up to an overall decline of 5%.

A question for everyone. How much does refining capacity influence production? Example. If refining capacity is 88 units, will producers only produce 88 units or if they could would they produce 90 units and let the extra two units stock up at the bottle neck? So put another way, my question is, could this plateau in the graph be reflecting refining constraints and not really an inability to increase production?
I would like to better understand the "refinery constraints" issue.  Although I don't have a solid source of up-to-date data, from the things I see, the calculated refinery "crack" margin is relatively low.  It spiked high from the huricanne effect, but quickly came back down.  It seems higher than it was 4-5 years ago, but not high enough to indicate that the market places a real premium on refinery utilization and feels the need to "pay" the refinery operator to insure absolute maximum utilization.

Hopefully someone better informed can enlighten us, but I just don't see refinery utilization as being a big issue, at least as reflected by the market.

Actually, the crack spread is very high compared to its average over the past ten years. Last week it was over $18, whereas from 1994-2004 it averaged $3.46. Yes, it's lower than after Katrina, but that was exceptional and brief (over $44 I think).

Also, as I posted a few days ago, the usefulness of the crack spread is declining as refineries shift to the processing of heavier crude. The 'coking spread', which gives an indication of refining margins for processing Mexican Maya went over $25 last week, against the 1994-2004 average of $6.89.

In short, refining margins are currently very high.

Refining capacity is influencing production. I know a number of areas that could crank production up some if the demand was there. I don't believe we are as close to PO as some people here, because I know of too many places that have some spare capacity. (Admittedly this may be a factor of my specific geographical location). I think there is a pretty good bet that we will peak within 10 years, but I don't think it's coming within the next 2. The major problems right now are 1). Refining bottlenecks; 2). Logistical issues (many caused by regional instability).


 I think "Slow Squeeze" should be added to relevant posts list.I believe it is a very very important post to the overall issues, especially to beginners.
From memory. The US is facing anoter major supply issue soon.

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.

In addition to this, low sulfur gasoline is coming online. Most European producers can't meet these specs, so imports will be cut. This will be an additional constraint on supply in the near future.


Any details on low sulfur gasoline ?  california only or ?  Dates ?

Sour crude oil now looks even less attractive.  I noted on the BP site that they were adding desulpfurization units to some refineries, but others were already "OK".

I strongly suspect that certain sulfur inputs were assumed when capital planning was made several years ago and desulpherization units were designed and approved.

That is, these refineries will have trouble processing higher than designed sulphur crude and producing legal over-the-road fuel.

Low sulfur gasoline went into effect March 1. Some geographic areas don't have to comply immediately, and it is phased in for some refiners provided they are going to 100% low sulfur diesel operation. In addition, some refiners can meet the spec by buying sulfur credits from other refiners.

The biggest impact, though is that low sulfur gasoline makes it harder for gasoline imports to meet our specs. I don't have a direct link, but I pulled the following quote out of a Bloomington, IN newspaper last week:

"Effective March 1, federal law requires oil refineries to remove more sulfur from gasoline. The law added an operating cost to U.S. refiners, but it also limited gasoline imports. Some foreign oil refiners stopped exporting gasoline to the United States to avoid the stricter laws, putting more pressure on U.S. refiners to produce more gasoline."

This is an additional restriction in supply that I haven't seen get very much press.


Since we're at this plateau (aka peak), demand for substitutes has risen. Consequently, we now see Jerome a Paris writing about "Peak Sugar!" beginning to happen already.

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

I think it's really unfortunate that he used that tag-line, "peak" on a farm crop.  His handwaving does not remake an agricultural supply/demand equation into a resource depletion issue:

Of course, sugar itself cannot be "depleted", but the land used to grow it can, or can reach very real limits.

Sustainable agriculture is a real issue (and goal) but it is not a "peak" problem.

DeAnander had interesting notes in the comments of my thread which suggested that Brazilian sugar production is efficient today because it uses up the rich soil left by primary forests (which are being cut down to make room for sugar cane) - and thus it is unclear how long such production rates could be sustained.

So it could end up being a very real "peak" situation.

Organic farmers have techniques for rebiulding soils, yes?

(They are easiest with imports of animal manures etc., but I think green manures, cover crops, work also ... though more slowly.)

When they use the sugar cane to produce ethanol they power the conversion by burning the bagasse.  This doesn't leave much to renew the soil.
Strictly speaking, ethanol is carbon atoms, oxygen atoms, and hydrogen atoms.  None of those require external imports for soil regeneration.  If you are returning minerals, and a sufficient fraction of carbon for soil conditioning, you should be good.

I'm relying on the rusty chemistry degree floating around in the back of my head, and my similarly ancient experience as an organic gardener.  I will yield to any active practitioner in sustainable agriculture.

Actually, I worry when experts in one area (oil depletion?) suddenly extend their expertise to override those in another field.  I think sustainable agriculture practitioners believe they have an answer.

Hello tj,

Good point.  Think of the Sun as an unlimited Ghawar oilfield, but the extraction infrastructure is the critical part.  plant seed=drill rig, water added=oil pipeline, soil fertility=refinery.  If you don't keep refurbishing the refinery to produce at optimum levels, or the pipeline breaks, or you cannot buy drill rigs: your infrastructure quickly becomes worthless.

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

On energyresources poster Milton Maciel, Brazilian with much experience and information on sugar cane, has insisted repeatedly that almost all sugar cane in Brazil is grown in Southern regions, not Amazon, and is not a cause of deforestation. He does rightly condemn the deforestation that is caused by loggers, miners, etc.
I think the parralel is pretty straightforward.

In the case of fossil fuels - isn't the problem coming down to our enormous rates of consumption? If we used, say 10 mln.bpd. of oil world-wide, then we could have easily switched to renewables to synthesize oil when it starts declining (not very soon if consumption was controlled indeed). I think it is safe to call those 10 mln.bpd a "sustainable level".

Similarly overproduction above the sustainable level is the cause of concern in the case of sugar. We are consuming natural capital (in this case topsoil, water, forests, biodiversity etc.) that in the long term will bring the production well below the sustainable level and will have severe consequences for everyone that came to depend upon it.

Fossil water is a direct parallel.  Biodiversity is an indirect parallel, as native biospheres are converted to any unnatural purpose.

But the argument made above is really about sustainability of agricultural lands.  See also:

And are our current practices sustainable? At what level can we stabilize output without overshooting our long-term productive capacity?

There are two aspects of the problem - intensive agriculture uses more fertilizers, irrigation, machines etc. to produce higher yields. I personally do not buy it that with the decline of fossil fuels this will need to be abandoned - many decades of decline will be more than enough to develop alternatives to current practices. The problems may come from erosion and loss of nutrients, but these are manageble with crop rotation, proper irrigation etc. IMO as long as we keep cultivated land under some percentage of the total land, IMO the human impact can be mitigated for indefinite time.

The elephant in the room is extensive agriculture - when areable land grows and replaces existing ecosystems - this besides being a death sentence to crop rotation or other sustainable practices will produce enormous risks long-term. And with intensive agriculture less affordable and population booming this is a very real threat. I'm particularly worried by the prospect of deforestating Brazil so that we can drive our cars on ethanol - this simply does not seem right.

First considering established agricultural lands - I think that true sustainable farmers are in the minority.  But at least conventional farmers are trending in that direction as increased costs drive them to reduce their oil-based inputs.  How low can we go?  That's a question for a real expert.

On the continued conversion of native forests into agricultural lands - that is a problem.  I kick a few bucks now and then to "conservancy" groups.  But what are we going to do?  Our ability to influence other nation's conservation programs are limited.  And the biofuels market will be bigger than us.

... back to individual action, and conservation.


Barren soil is starving Africans:

Experts call for focus on fertilizing exhausted earth.
Hello JMG,

Good article, thxs.  Shows how overpopulation creates an unsustainable biosolar burnrate [Remember, these people never had any or little fossil fuels.]  If the NE or NW parts of the US secede to become the initial biosolar habitats, this article points out how most of the people living there now will have to move out to reach a sustainable habitat human/acres density.

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

Jerome had a new diary yesterday, not directly related to peak oil, but interesting.  It was about the government's decision not to publish the M3 data.  
Well, seems like Venezuela is the new Middle East. Panic over.

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.
Apologies. I see this was covered in yesterday's thread.
Good insight, Stu.  Question though...

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?

300kbd from Haradh III starting in late March, supposed to reach full production by summer.  So we don't have any good information on how it impacts Saudi numbers yet.  It will be very interesting to see.  The
Hello all,

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).

Nice work, and I think your conclusion is correct.  A car is a major expense for most people, and we won't be switching over to Priuses or hydrogen cars en masse any time soon.

I wonder how many families have one large car and one small one?  My parents do; that's the pattern they've had since they could afford two cars.  But I know a lot of people who have two big cars, or an SUV and a mid-sized sedan, or a big car and a truck.

As a newbie please forgive my ignorance but given the announcement by OPEC that they are going to hold production steady, wouldn't price fixing be a significant contributing factor for a plataued production graph? Especially since the Saudis recently announced here that they had added 2 mbd to production capacity but haven't increased output. I guess you can always choose not to believe them but it seems reasonable to me.
It's not clear what the situation really is.  They say they have some spare capacity, but it's never shown up in the production statistics.  Eg there's no evidence in the statistics that they increased production during the hurricane aftermath, when one might have thought anyone claiming to maintain spare capacity in order to help stabilize the market would have helped out a bit.

I certainly think there's room for a component of "The Saudi's could increase production but aren't very motivated to do so" in the overall explanation.  Their rig count is not very large, and perhaps if it was, they'd produce more.  In the grand scheme of things, it's probably better for everyone if they keep their production stable for a longer period, rather than using it up at a higher burn for a shorter period.

The article you link is interesting though - Haradh was another step in the much vaunted scheme to increase Saudi capacity to 12.5mbpd.  It will be interesting if the mythical capacity keeps going up, but like Haradh, none of it ever causes production to increase.

Assuming the Saudis have spare capacity, the question has to be asked, why would they want to increase actual output?

Simply to demonstrate they can? Oil is steady around $60-$65 with no indication that this is either killing demand or driving the world to recession.

It would seem that given this situation the posture of oil-exporters would be to see how much higher they can afford to edge this price.

While I used the term killing demand above, there are also indications that demand/consumption is itself in a present plateauing period. Halfin's comment above that this may be as much a driver of these production numbers as anything seems appropriate.

In fact, if such is the case then the theory that these numbers and what we see in your graph prove "Peak Oil Now" goes right out the window, because we know that Peak Oil has to be geology/supply driven.

I like your addition of both centered and trailing moving averages and hope you keep them for the next release. I would like to see perhaps two more years previous included in this data-set, but should probably be working on this myself.

Well, historically, oil exporters (in the form of OPEC) were not disciplined enough to keep the price very high in the face of everyone having spare capacity.  They would tend to all try and cheat in order to get a bit more of the pie, and end up causing prices to fall.  As recently as 2-3 years ago, global production was increasing sharply.  So something changed towards the end of 2004.

One possibility now, I grant, is that the rest of the world now has very little ability in aggregate to increase production, but the Saudis could if they wanted, but won't.  In other words, the rest of the world is really peaking, despite trying hard not to, but the Saudi's are deliberately capping their peak production below their maximum potential.

Absent inside information from Saudi Aramco, I don't see any way to confirm this idea, but it's consistent with the low rig counts.  However, in a sense it doesn't really matter.  As long as there's no effective way for the rest of the world to change Saudi Arabia's behavior, it doesn't matter whether it's deliberate or geologically constrained (as long as they continue to do it).  What it might tend to do is flatten the peak and reduce the post-peak decline rate.  Those are good things.

> Peak Oil has to be geology/supply driven.

I respectfully disagree.  One of my first posts was "What if everyone thinks like the Norwegians", where rational exporters restrain supply due to an expectation of higher future prices (Peak Oil or just Bumpy Plateau) in the not too distant future.

The actual Peak will, IMHO, be caused by external factors.  War, hurricane, coup (If the Islamic Republic of Arabia replaces Saudi Arabia next month, April will be Peak).

Yes, geology underlies the trend, but "other factors" than geological decline are more important short term and will, hence, determine actual Peak.

I'm speaking in terms of the Hubbert/Deffeyes analysis/definition which I use absent some other consensus. Otherwise, you are correct.
I've posted this link (which I just happened to google and do not endorse) before but I'll do so again now because of the discussion topic (and not many people commented last time..). Price fixing seems to be central to some peoples interpretation of production ever since 1973 and is perhaps one of the reasons why some people say peak oil is quite a few years away. Note the world production peak in one of the later slides and how the Hubbert curves he fits diverge from real production at 1973. If world production hasn't been maxed out since 1973 then I would guess his interpretation is correct. However I note Stuart says that historically OPEC hasn't been able to control the price...
I'm not sure I understand what you are asking. Both Stuart and I commented relating directly to this topic. You should give everybody else a little more time. Typically you won't get that many responses in this time frame, if at all.

Price manipulation has been around since well before 1973. It has been around since oil was discovered. Texas Railroad Commission?

 Chernow's biography of Rockefeller - 'Titan'
 Yergin's 'The Prize'

Ok thanks!
Sorry Oil CEO, could you point me to where you've addressed this? Its hard for me to wade through all the comments. I looked back where I posted this presentation last time and there weren't any comments by you or Stuart. I understand price fixing is hardly a new phenomenon, the question is if it is true that production has been under capacity since 1973 then where does that leave the Hubbert curves that people have tried to fit to production since 1973? For instance here. I imagine the same thing applies to linearizations even if they are straight. If real world production isn't maximized because of price fixing then the extrapolations aren't predicting peak oil as far as I can tell.  I apologise if I am missing something here, I am no oil expert so please have patience.
I thought just right above here, but maybe your were referring to something you posted at an earlier date.

Hubbert curves in my understanding are applied to individual oil fields and are quite accurate.

There is some confusion about the inclusion or not of discovered reserves on a yearly basis into that equation. I'll let others comment.

As far as 1971/72/73 - Hubbert apparently fit all American fields into one big curve to predict a peak in American production.

As far as price-fixing, any producer would want to do this, hence the creation of OPEC - a cartel. The oil exporters thought they would pool their strength in order to counter both the influence of Western consumers and Western Oil companies.

The reason you want to price-fix - to get the price for your product as high as possible. As long as people are going to buy it, you want to sell it for the biggest profit possible - this goes for anything. But at some point the price is too high, and your customers go away - a line you don't want to cross. I'm sure you know all this.

The feeling in the peak-oil world is that at 85 million barrels per day, and a certain amount of oil in the ground to start with(1.2 Trillion barrels or whatever it is) that that equation produces a curve, the top of which we are either at or very close to.

For the last 100 years or so, everyhing has proceeded(even during the disruptions in the 1970's at a more or less normal pace) How do we know this? Because the price of oil has averaged around $25/barrel and has never gone above $90.  Of course the "oil shocks" that have occured are certainly nothing to dismiss, but the world didn't come to an end, and instead change and transition occurred.

The feeling that change and transition could occur now if there was a shock is met with much skepticism at this site.

The deals that oil-producers had with Western countries and companies had oil selling steadily at about $5 until I think  about 1968. The Arabs got their act together and we are where we are now.

As far as how price fixing figures into this, while it may have effected the supply/demand (and hence production) situation one way or another in individual regions, individual years or even decades, it doesn't really change the larger historical shape of the curve, which when said and done(and if correct) will span 200 years.

Spare capacity, if you can believe the accuracy of the numbers has been steadily decreasing for years. Remember, the world was awash in oil in the 1970's, it was supply-situations completely influenced by humans that caused the disruptions.

Today, the feeling (at least many of us here) is that even if there were no political problems or other obstacles - the geological aspects of oil (field decline) and the lack of new discoveries simply negate the possibility of pulling more than approximately our current rate of 85 million barrels per day out of the ground. Price fixing isn't big enough to significantly effect that equation other than in the short-term.

Hope this helps. There are others here like westexas who can probably do a better job explaining how the curve fits.

Thanks Oil CEO.
You have clarified your view on my question. I note that even taking into account price fixing as Drollas has done in the pdf I linked to, he predicts a peak at around 2020 which is quite soon in any case!


I'm sorry, I didn't read that pdf til now. I thought your two red "here's" were to the same link. You should say what the links are and maybe throw in a pdf warning.

Drollas' presentation is decent. Probably a bit on the optimistic side, in my view, but contains interesting information. I'm a little hesitant about his numbers. He has current production at 65 million barrels for his peak/curve graph?

I don't know if you noticed, but he uses 2002 as his last year on the projected-price graph titled "How wrong could you be," even though the presentation is dated Nov 2005. If you were to actually update this chart, 3 or 4 out of the 5 predictions would be correct.

I'll try and be clearer next time. I'm glad I've finally gotten some feedback on this talk since I've been wondering what people at TOD would make of it. I suspect parts of this presentation may be old with other bits updated. I agree that his graphs etc may look a little different if he updated everything, including current production of 85 mbd. That would put us at about his predicted peak value!
FWIW, I think the core difference between the guy who did that first set of slides and someone like me is whether or not you believe OPEC reserves.  He obviously does.  I've never seen any remotely satisfactory explanation for this:

(from the BP energy report) other than the peak oil one: those giant jumps are a dishonest attempt to increase quota by miststating reserves upwards.  There were no major discoveries in those countries in the 80s, and honestly reported reserve growth should have happened much more gradually.

My mental model of someone who is lying, and has not come clean and tried to clear up the mess, is that all further communications from them will be at least in part about supporting and propping up the original lie, and therefore cannot be relied on, unless they can be independently verified.

If there were to be some useful outside audit of OPEC reserves which demonstrated that indeed there is still 700gb+ of proved reserves in the Middle East, then I would undoubtedly have to conclude that peak oil was much further away than I currently think, and any current difficulties are entirely the result of deliberate rate limiting by OPEC.

Right now, we cannot distinguish very well between deliberate OPEC rate limiting and peaking.  However, I suspect the number of parties who could easily increase production a great deal more must be very small, or the cartel would fall apart from cheating.  Iraq would certainly be in this category if only it were stable (which seems very unlikely anytime soon).  Saudi Arabia may possibly be in this category.  We'd also need an explanation for why they started doing this (unannounced) in late 2004, after not doing it before that.

Hi Stuart.
Regarding increases in reserves, doesn't it depend on price and cost of extraction some what? For instance according to the DOE, at $50 a barrel Venesuela has larger reserves than the rest of the world combined (see here), but not below this price. So why are increasing reserves etimates as a response to extraction or conversion cost vs price unreasonable? Not to say they have definitely not lied about it but it seems to me that it is possible they are telling the truth. Again, it seems to be just another part of the increadible uncertainty regarding this whole phenomenon.
Prices dropped sharply in the mid 1980s.  If price-based revisions were important, they should have gone down again.
Fair enough.
Guri in Venezula is one of the largest hydro dams in the world. 10.2 GW, 46 TWh annually. A friend finished working on a new dam below Guri (about 2,000 MW from memory).  Mostly used for aluminum production.

I wonder if a combo of solar assisted + electrical heat pump could create enough hot working fluid (steam or ?) to extract a decent amount of Orinoco heavy oil ?

More heavy oil, less alumninum

Leanan's last comment relates directly to a question raised at the start of this thread. And yes, it is at least imaginable that gasoline consumption could be curtailed 10% or even more in a short period of time. Could, but we just don't know what will really happen
Leanan notes that a lot of families support two cars. I'd go further and point out that a lot of families support whole fleets of cars. Everyone enjoys driving around in the '05 Tahoe with the great sound system and the cool alloy wheels, but if one of those alloy wheels breaks there's a '98 Escort available. And spending a whole weekend cruising in the '72 Trans Am is fun but will not much happen if gas is $4.

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.

I found an article from Petroleum Review here ( How do you compare this analysis with their analysis? They asserted that

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