IEA Supply Creeping Up

Average daily oil production, by month, from EIA and IEA, together with 13 month centered moving averages of each line, recursed once. Click to enlarge. Believed to be all liquids. Graph is not zero-scaled. Source: IEA Oil Market Reports, and EIA International Petroleum Monthly Table 1.4. The IEA line is taken from Table 3 of the tables section at the back of the OMR in the last issue for which the number for that month is given.

The IEA has come out with the July 12th Oil Market Report. Usually, I update my graph when they initially release it based on the public press release, but in this case the press release didn't have the overall supply numbers so it was necessary to wait for the full report to be publicly available (2 weeks after it is made available to their subscribers).

World oil supply in June gained 315 kb/d from May to average 85.2 mb/d. This was 715 kb/d higher than June 2005, with OECD production down by 620 kb/d, OPEC total oil supply up 225 kb/d, and non-OECD plus other supplies running 1.1 mb/d higher versus year-ago levels. Month-on-month gains in June came from the US GOM, Canada, Russia, Azerbaijan, China and Sudan, while North Sea maintenance trimmed European supply by 175 kb/d. OPEC crude supply was 200 kb/d higher than in May, largely due to renewed exports from northern Iraq.
So a good month, they think. Also, in response to a suggestion from Freddy Hutter, I have reworked my methodology for taking the data from OMR's. Instead of extracting it from the summary the following month, I am now taking it from the Table 3 figure, three months after (or the last data given if not yet available). That has sharpened the sense of disagreement with the EIA. As you can see in the graph above, what the EIA sees as a clear plateau is to the IEA just a (sharp) slowdown in growth but not an actual flattening. IEA used to be significantly more pessimistic than EIA, but that gap steadily closed and has now crossed.

We can see the issue more sharply in this new graph, which shows the year-on-year percentage change in the recursed moving average for each data source:

12 month percentage change in 13 month recursed moving averages of IEA and EIA data. Click to enlarge. Believed to be all liquids. Source: IEA Oil Market Reports, and EIA International Petroleum Monthly Table 1.4. The IEA line is taken from Table 3 of the tables section at the back of the OMR in the last issue for which the number for that month is given.

As you can see, the EIA line looks like it's headed determinedly to zero (ie moving averaged supply being dead flat for a year), while the IEA line is expressing an interest in perhaps flattening out to a small positive value (ie some small growth in supply). The IEA has seen faster growth at all points during these last four years - presumably this discrepancy cannot continue forever.

It will be interesting to see if the EIA, with their May initial estimate due in a few days, starts to confirm the high numbers the IEA is estimating for 2006 Q2. Of course, it's also worth bearing in mind that the picture could change in a hurry as we go into the active hurricane season, or if events in the Middle East continue to worsen and begin to affect oil production there more seriously.

On hurricanes, it's worth noting that so far this year we've only had tropical storm Alberto. By this point last year we'd had TS Arlene, TS Bret, H Cindy, H Dennis, H Emily, TS Franklin, and TS Gert. So a much slower start to the season. However, in 2004 there were no named storms by this date.

One other interesting point from the IEA OMR:

The biggest single change compared to last month’s Report is the inclusion of biofuel supply estimates for countries other than Brazil, the USA and Germany (for which a combined 500 kb/d-plus is already included in the OMR). Analysis undertaken for the MTOMR highlights global supply of ethanol and biodiesel, net of US/Brazil, rising from 22 kb/d in 2000 to 74 kb/d in 2004, 118 kb/d in 2005 and 154 kb/d in 2006. This includes estimated ethanol volumes by 2006 of 10 kb/d or more each in China, the EU, Thailand, India and Colombia. Global biodiesel supply rises from 15 kb/d in 2000 to 40 kb/d in 2004, 72 kb/d in 2005 and 84 kb/d in 2006. Production is centred in Germany (40 kb/d) and in France and the USA (with around 10 kb/d each).
Biofuels seem to to be the component of the "alternative" fuels that can respond most rapidly to current high price incentives since the facilities are small and easier to capitalize, permit, and build quickly than, say, oil sands upgraders or CTL facilities. However, competition for land with ever increasing food demand will presumably limit the growth of biofuels at some point.

For those unfamiliar with this line of posts, please check the plateau background to get a better understanding.


It seems to be going up a bit, even with these very high prices.

The other day, you suggested that hurricanes could not explain the plateau, but from your post today, I feel that you changed your mind a little bit. Is that fair to day?

How about the following explanation for the plateau:

  • High prices cause demand to reduce
  • Everybody not in the PO debate says that there is at least a 10$ offset for supply worries on the price
  • With a short term elasticity of about 0.3, that would be about a demand reduction of 0.3*10/70, about 4-5%.

I know nobody wants to talk like this, but what do you say?
Dear Stuart,

At the ASPO-5 meeting there was a presentation by Andrew McKillop, in which he advanced the notion that the supply and demand numbers have been doctored. Mr Luca Barillo, an oil trader, concurred, during his presentation, as did one mutual fund manager in the audience with whom I took up this issue privately.

The claim is that increase of over 4 million barrels per day during 2003-2004 is the result of readjustment of the numbers, as the original numbers at the time did not reflect this large of an increase. Thus if the 2004 and 2005 numbers have been increased after the fact, then the increase during the latter part of 2005 and the first half of 2006 would appear slower than what is actually happening.

McKillop estimates that the increase in demand is around 2.4%or about 2 Mb/d, rather than the 1.3-1.7 percent traditionally assumed. Where does this extra come from? I talked with McKillop and our guess is that it comes from condensate and natural gas liquids, owing to the many natural gas projects which have been started.

From all we read in the papers, it certainly does not seem that demand slowed down over the last 12 months.

best, Seppo Korpela

P.S. My first post to Oil Drum

This, if true, would not change the supply/demand situation nor the current daily production, but would significantly change the slope of production growth so as not to look so toppish

and welcome to TOD.

Yes, the supply and demand are still large and the chart may be giving a false topping signal.

At ASPO-5 the Luca, the oil trader, mentioned that an increasingly non-commercial speculative component is now at play in the oil market, which is clear to those who keep a watch on the commercial and non-commercial parts of futures.

Colin Campbell stressed that the year when peak is reached, is immaterial, and we should be concentrating on how we cope after the peak. Jeremy Leggett also gave a great talk and said that we cannot afford to burn all the hydrocarbons, for that might trigger a runaway global warming.

Thanks for the welcome. I do not plan to post very often, as I am working to get my house into a shape which will withstand a cold winter without natural gas.

best, Seppo Korpela

Welcome Professor Korpela! I enjoyed reading many of your posts on the energyresources group.
According to IEA figures, world supply is exceeding world demand. For the last quarter, 1.8 million barrels per day should have been going into stocks. We only have OECD stock figures from the IEA so does anyone know if world stocks have risen by 164 million barrels, since the first quarter?

Looking back, supply exceeded demand by 18 million barrels, during the first quarter, so stocks should have risen by that much. OECD stocks rose by 13 million barrels. In fact, supply has exceeded demand for every quarter in table 1, except the 1st quarter of 2005, even in the hurricane hit 3rd and 4th quarters. In 2005 overall, supply exceeded demand by 0.8 mbpd. So stocks should have risen by 292 million barrels. OECD stocks were only 79 million barrels higher at the end of that period.

It doesn't give me much confidence that these figures have any validity. With supply exceeding demand comfortably in the last quarter, prices should have fallen, possibly even with geopolitical factors. Indeed, given the oversupply for over a year, shouldn't prices be way down on their highs?

Stuart, glad to see you back. The Year-On-Year percentage change chart should probably go back before 2002. Freddy, Robert, and other short-term predictors of production increases are probably going to win the day. But we'll still need a few months to know for sure.

Americans show no signs of curtailing their appetite for gasoline. What many predicted was World War III has already faded to the point where everybody except Anderson Cooper(CNN) and Fox News have packed their bags and left the comfort of Beirut and Northern Israel.

The Levant

What happened guys? Oil is trading kind of low, given the circumstances. Everybody adjusting to a probable increase in supplies?

I wanna know. What happened to Bird Flu? What happened to Iran's nuclear program? What happened to Iraq? What happened to the Big-Dig? Is hot weather and reality-shows the answer to all our problems concerning what we should pay attention to?

They decided to have World War III, but no-one showed up? Why does that sound familiar?

Meanwhile, I've been reading about Rousseau, Catherine, and the Revolution in Iran.

A few months are unlikely to prove much of anything given the amplitude (1-2mbpd) and wavelength (year or so) of the noise fluctuations.
Hey, you caught the one joke I had tonight! I totally agree. I always chuckle, when I hear the line,"we'll know in a couple of months." You've used it yourself on a few occasions as I recall. Maybe not. Anyway. Difficult situation to judge. And I am sure about this. You and I have been here for almost a year now, month-in, month-out, saying damned near the same thing. So maybe we should start thinking about setting targets into the future for us to judge things by(when we get there). I'll give an example. A proposal.

We know we've hit peak when: our 13-month average drops by an average of 2% or more per month for twelve consecutive months.

I like that one, I'm already using that. Awaiting your counterproposal.

2% a month? That would be around 21 1/2% a year!

I don't think it will be easy to set criteria in advance. Eg, we might have ME oil shocks coming up before too long -- I'm not sure how long the Arab countries are going to stand for our resupplying Israel with the bombs used to maim the children that keep showing up on Arab TV every night -- and how will we distinguish the shock from the underlying trend? Or a housing crash led recession next year - we'll have to look at prices in an attempt to guesstimate how much of the supply change is due to falling demand, and how much to supply constraints.

C'mon. I meant year on year months. I'm not compounding. I'll demonstrate with chart if you want. 13-month average of course and average monthly, so if we get 2-2-2-2-2-2-2-2-2-2-1-2 : it doesn't count. I'd be glad to hash this out. I'd only consider a joint statement from the two of us as progressive in this environment.

I totally and completely take your caveats as legitimate. I'm proposing my measure in lieu of other factors, which I am confident enough to say won't be that important.

However, I am revising proposal. Point taken.

But give me some guidance. Should I go to 1.75 or to 2.25?

As a community, we are going to need to take the lead here. I propose this as our offensive strategy.

Lord Browne on Fox tonight (on Cavuto's show). Catch that? Seen BP ads lately? Did you catch subtleties in later parts of interview. HE DOESN'T CARE. And he knows the truth. He speaks the truth. He just doesn't care. It's so obvious. What am I missing? Oil CEO often asks this question, rarely getting an answer - WTF am I missing!

We need to take the offensive.

The play-money Foresight Exchange game, , has been going on since 1994 and lets people bet on various future events. They have a number of Peak Oil related claims and we spent some time trying to hash out the definition of the peak. It's tough because there have been peaks before, the biggest being around 1980, and we were trying to come up with something that would distinguish from them. In the end we gave up and just ruled that the "new" peak would have to happen after 2004.

The definition is two consecutive years of 3% declines in production. In retrospect that may have been two strict - we could see something that historians would eventually recognize as a peak without seeing these kinds of declines until much later. Or it could be too weak - we could have a severe two-year recession/depression and have such declines, before bouncing back to higher production than ever. It's tough to come up with a clear definition. Like the fall of the roman empire, it's something that can really only be declared in hindsight.

See the claim at . Trading prices predict a peak (as defined above) in 2010. (That is, 2011 production will be 3% less than 2010, and 2012 will be 3% less than 2011.)

( provides evidence that play-money prediction markets can be as accurate as real-money ones.)

Your 3% threshold would have declared a Peak in 1982 based on 1980 & 1981 declines.  Again a Peak would have been declared in 1983 based on '81 & '82 declines. After that episode, the largest of the five next annual shortfalls was 1.06% in 1999.
There have been many times in the past when the taps were shut down deliberatey, or becase of political reasons. There was Iranian revolution and the Iran-Iraq war that caused OPEC production to drop. Then there was the collapse of the Soviet Union. Then OPEC, in about 1999, cut back on production because of low oil prices.

But now every nation is producing flat out, except perhaps for Nigeria and a few barrels in Iraq. But the point is a drop in production right now would be caused almost entirely by depletion, not by political reasons.

That is the difference Freddy.

Halfin, please take note of the following graph:

This is the month by month oil production for the lower 48 US from 1969 to 1973 (2 years pre-peak to 2 years post-peak). Note that it is very noisy. Note that it is very hard to distinguish the peak in there.

Now, here is another view for you to consider of the same 5 years. This makes it even more obvious how hard it is to spot peak on a month-by-month basis, which is why I call BS on Freddy Hutter's crowing about any single month's change. Actually seeing peak will only be possible by looking backwards. Any crowing now, either way, is just a guess.

Note that the YELLOW data set in the second graph is the peak YEAR but that the prior year actually had months above any of the peak year months.

Here's the CSV data for those five years using month-by-month production (in thousands of barrels) in case anyone wants to copy and paste just those 5 years. This data came from the EIA.







Uhh, u might want to back test that first.  As i mentioned in the past, we've had nine year-over-year setbacks.  This morning i cited 1999 & 2002.  Try it on these last two extraction pullbacks and u will see the folly in calling a Peak.  False negatives and false positives all over the map...
I checked out your website Mr. Hutter -- it's awful format! Absolutely horrible to read. Why don't you make it a bit easier on the eyes? It looks absolutely unprofessional.
Ugg. Yes, this has been mentioned before. I'm sorry I ever started this trend. When I have progressed with Sailorman some more, I'd gladly re-invent Freddy's website. Until then, please play it on his numbers. He just needs to lose the black background. That's all it is. And he probably had a site long before you - so give him a break. Right!? - :) Let's all concentrate on the real enemy - our congressmen and senators.
Didn't mean to be mean -- it's just very hard to read.
It is the oldest and one of the last of our non-subscription (free) sites.
:-) Still hard to read.
You mean there are idiots who pay for your crap?
Oh, so it's our congressman and senators who are using 85 million barrels of oil a day?  They sure do drive a lot!
The realization is setting in among buyers and the few speculators that are left that only the pundits (and we all know who all those drama queens are) that deal in anecdotal information are saying the sky is falling.  Those who crunch the numbers are reluctantly resigning themselves to a grand year coming in 2010 for production and refinery capacity.  The Peak she is postponed big time.

That is not to say that we are not in for more price shocks.  I am almost convinced that the fear component is gone.  But it has not been replaced by what i have called the depletion realization component.  It's good ol'e supply and demand.  A reflection of recently unprecedented 4.9% global real growth.

Combined with oil supply growth which has been in the range of 0.2-0.5% per year over the last couple of years with the growth rate still dropping.
M. King Hubbert's critics in the early Seventies cited record high Lower 48 oil production as evidence that Hubbert's Peak Oil theory was wrong.

Note that the recent crude + condensate declines and the total liquids very slow growth corresponded to record high nominal oil prices.

This higher price = less oil pattern is precisely the same pattern that we saw in the Lower 48, at the same stage of depletion that the world is at now, based on the HL method.  

I agree.  I've been following PO for nearly 3 years now and I find it infuriating that there are those who are always predicting the peak is NOW, as if we can know with that degree of accuracy.  These are the same people who always predict that the American and World economy is always going to collapse compeltely next quarter.  Kunstler has been predicting complete collapse of the economy next quarter since at least 2003.  As per the above thread, there's too much noise to say with any certainty.  ASPO is predicting 2010 and skrebowski is saying 2010 or later.   We need to stop saying PO is now bc/ we just can't know.  I had an instructor in my residency who harped on us not to pretend to a level of specificity in our diagnostic tests that does not exist.  If your measurement is known to be plus-minus 2% and your data set is 82 and 84 and 85, you do not report to the 2nd decimal (83.66) as this belies the imprecision of your data.  In fact, you probably shouldn't even report to the first decimal in this case without qualification as your standard deviation is far greater than 0.1.  A report of 84 plus or minus 2% is more appropriate.  With this level of noise, and as it's  been said by many other, you can only see it in the rear-view mirror.  

The danger in all this is that others can accuse PO'ers of chicken littleism.  It just gives them more reason to ignore the problem and do nothing since there are those who've been saying PO is now forever.  There are even websites all over the net that still haven't bothered to update and are still reporting 2000 or 2003 as the all time peak!

Of course, the time to act is NOW regardless of when the actual peak occurs.  

Considering all the short term "noise" factors that go into the monthly variations in the production of oil, not to mention all the changing substitutes for conventional crude that are creeping into the equation, it may be of more practical use to think of "peak" in terms of economic peak rather than physical production peak. The economic peak could be defined as that point when, on smoothed curves, the demand curve starts to permanently climb ahead of the production curve. This simply means that our economic peak will happen many years before the physical peak. In fact, the economic peak pretty much transpired in '03 when, in response to Gulf War II threatening, the Saudis issued a wire announcing that their production had reached its peak and could not respond with its historical norm of opening up its valves to modulate the geopolitical "noise". Since then, the rate of climb in production has been set by the rate of adding infrastructure in a race with the major fields' decline rates; and this relatively flat production climb has been losing the race with the demand climb for years now as evidenced by the bursting of oil prices up out of relative stability in '03. And this flat plateau is on shakey legs with a watering out of Ghawar and all the other problems Simmons documents waiting to quickly tilt the plateau the other way.  
I don't know how anyone, number cruncher or not, can have confidence that 2010 will be a grand year since it's impossible at this time to predict the decline rates of major fields years from now, not to mention political events.
Freddy, Robert, and other short-term predictors of production increases are probably going to win the day.

Well, if I see a bit farther than the next man, it's because I stand on the shoulders of giants. Or something like that. :-)

In all seriousness, let me reiterate my position. I do believe we will continue to creep production up for just a few more years. I think we have a pretty good shot at 90 million barrels a day by 2010. But I believe it is highly probable that we will peak within 10 years, meaning that we need to be taking very quick action on this issue. We need a sense of urgency, and I am afraid that if production is creeping higher, people won't be nearly as concerned. What we have at the moment is what I call "Peak Lite", which is increasing production that still can't keep up with demand. This has many characteristics of a true production peak, and will continue to result in very volatile energy prices.



Freddy, Robert(?), why the disagreements.  Looks like too many captains arguing about the course while the ship is sinking IMO.  Distracting at the best of a discourse about something so serious.  Who really wants to be on TV saying "I was right, we had 5 more years than they said, but it still sucks" woohoo! go for it! You will be hated and cursed.
In the big picture I could give a rats ass whether it is this year or 4 yrs from now.  Being prepared sooner is by far better than later.  Telling people it will be OK is not getting us to where we need to go.  
It will be your kids, relatives, freinds, what not, that are going to look you in the eye and say "you knew this could happen and with all your education had the forsight to sit around and argue over a couple of years on the time line". Come on man, get with the program.  
So far westexas's preparation suggestions are the best.  They look 1) reasonable 2)logical 3) within the zone of personal influence.  We should prepare for the worst and hope for the best.
(ass chewing over with)


Telling people it will be OK is not getting us to where we need to go.

You sound a bit delusional to me, so let me spell out my position. I am no Peak Oil denier. It is coming. We must try to prepare ASAP. But it is pretty difficult to see out for more than 2-3 years. That's why there is so much disagreement over the timing of the peak.

Why does it matter, you ask? Because the more often we say "The sky is falling", only to later acknowledge "OK, not yet, but the sky WILL fall", the more credibility we lose. Look at Deffeyes. People point to him and all of his failed predictions, and then think Peak Oilers are wackos. We need fewer wackos, and more rational heads. The rational heads need to acknowledge that saying "Peak is now", only to later admit "Oops, not yet" will chip away credibility with the public. And the public is who you have to win over.

A better dialogue with the public is: 1. Peak oil is coming, in the not too distant future. 2. The exact timing is unknown, but many (most?) experts believe that it will occur within 10 years. 3. The Hirsch report says that we need to begin preparations 20 years in advance, so we are almost certainly behind in our preparations. 4. Failure to prepare will result in incredibly volatile energy prices, and has the potential for devastating consequences to society.

Incidentally, I am not suggesting that Stuart has been guilty of saying "Peak is now." I think he has added the proper caveats, and said "maybe" now. But a lot of people here do emphatically say "Peak is now." You have to consider loss of credibility - particularly with public perception - when you do this.



I expressed my position in Why Peak Oil is Probably About Now, which concludes

While no one piece of evidence is conclusive, I find the overall picture here to be suggestive that oil production is close to its peak value and is not likely to increase too much more. Whether May 2005 will stand as the highest ever month of production or some month in 2006 or even 2007 rises a little higher is certainly hard to call. However, I would be quite surprised if the world is able to bring enough new production on stream to overcome those high decline rates in existing production for much longer. And with each passing year, it's only going to get harder to do.

I have no regrets about that statement at this time :-)

A few years from now we may well look back and see that external events have changed our calculations beyond recognition.

For instance, if the housing bubble (which Robert Schiller and The Economist both say is the largest financial bubble in human history) bursts, popping the larger debt bubbles, it is quite possible for demand to shrink by enough to cause an retroactive "peak" while dropping oil prices back to levels where it is uneconomic to pursue alternatives (like tar sands). A prolonged, deep recession could easily mean cheap oil prices and reduced production until the eventual recovery meets up with the downside of Hubbert's curve.

Conversely, political troubles in the middle east could send production plummetting, in which case "peak" would be reached immediately. Such an energy crisis would probably pop the bubbles and produce the results mentioned above.  

In either of these cases, which are very possible (check out Prudent, then our hair pulling and bickering will seem rather irrelevant.

I think your right that some other economic or social factor will come into play to disrupt the economy and lessen demand significantly.  This will cause a demand drop followed by either a real or simply for demand reasons drop in supply.
But I am firmly conviced todays advanced recovery methods are not going to increase yields significanly from fields but result in massive depleation rates as you get cascading failures in the fields. Cantrell and Ghawar being the poster child for this effect.

So depletion will kick in and hard soon after the false or non geologic peak.  Sort of out of the frying pan and into the fire effect.

This stair step of demand desctruion leveling of rising prices till we crash agian will probably continue for the next 10-15 years.

"Look at Deffeyes. People point to him and all of his failed predictions, and then think Peak Oilers are wackos."

A minor point regarding Deffeyes.  IMO, his prediction, in his second book that the world would hit the 50% of Qt mark in late 2005 (based on crude + condensate) was consistent with his first book, where he put the peak between 2004 and 2008 (if memory serves).

Between the two books, he made an observation that we probably peaked in 2000, based on the production declines in 2001 and 2002.  However, this was an observation and not a prediction.

In regard to failed predictions, consider some "Conventionial Wisdom" case histories:
Shell Shocked
Christopher Helman 07.27.06, 3:00 PM ET


In physical terms Shell is weak. Over the past three years it has replaced only 38% of the oil it has pumped. It is desperately searching for new pools of crude while trying to make up for their scarcity by shifting its focus toward natural gas. Gas is plentiful but hard to move--hence, in most cases, much less valuable as it comes out of the ground. Shell has suffered disarray in giant projects in Nigeria and on Russia's Sakhalin Island, and pricey delays in developing several prospects, including South Mars.

All oil companies confront the fact that petroleum is getting hard to find in politically stable parts of the globe. But Shell is in more of a crisis than the others because of a problem of its own doing: For years it exaggerated the size of its reserves. In January 2004 it confessed to the problem, eventually slicing 4.5 billion barrels of oil-and-gas equivalents off proved reserves, which now stand at 11.5 billion barrels. Counting only crude oil, reserves are down from 6.6 billion barrels in January 2003 to 4.6 billion now. This is more than a bookkeeping matter. Shell's production of oil has been dwindling at a rate of 7% a year.

Estimating reserves is as much art--or politics--as science. Shell has been in Nigeria for 50 years, and there's a lot of oil there. But how much can it get its hands on? Some of its Nigerian fields had leases set to expire before the company could possibly recover the oil it claimed as proved reserves. And relations with the host government are not good. The company's enemies in that country accuse it of destroying the environment, bribing officials, arming security forces and working behind the scenes to silence anti-Shell protesters. The company says it is a responsible corporate citizen and respects human rights.

Re:  "Conventional Wisdom" (CW) Estimates Versus HL Estimates

Question:  why is so much weight given to CW reserve estimates, when the HL method--at least for large producing regions--has been proven to be so much more accurate?

The Lower 48, North Sea and Russia all fit the HL model.

Mexico, Saudi Arabia and the world (crude + condensate) are now showing production declines, consistent with the HL model.

Re:  Deffeyes

Following is an excerpt from an review of "Hubbert's Peak," published in 2001.  Note that his updated work, in his second book, put 50% of Qt mark right in the middle of his original range of 2004-2008.

From Amazon:

"In Hubbert's Peak, Deffeyes writes with good humor about the oil business, but he delivers a sobering message: the 100-year petroleum era is nearly over. Global oil production will peak sometime between 2004 and 2008, and the world's production of crude oil "will fall, never to rise again." If Deffeyes is right--and if nothing is done to reduce the increasing global thirst for oil--energy prices will soar and economies will be plunged into recession as they desperately search for alternatives."

Robert that is why i put the (?) next to your name. I wasn't quite as sure about you saying it wasn't coming soon. Seems other feel you do.  
all the best.
Unfortunately u are not listening to what Robert is saying.  I don't make short term predictions.  I do little in the way of primary data collection.  My Scenarios tracks others good studies.  At figure-16 on our website, u can see that Campbell's prediction of Peak started in 1991.  It was for a peak in 1998. He and Jean crunch numbers but got it wrong.  There are a whole bunch of other pundits and cowboys here at TOD and in the MSM (Pickens, Simmons, Julian Darley, Heinberg, etc etc ad nauseum) that have jumped on the band wagon for personal notoriety, book sales and speaking engagements that use anecdotal info for their purposes and agendas and do nothing but create alarmism.

We missed the 1998 Peak and six since...

Just as there has never been a hotter global year than 1998, it's always next year; and the public and media is tuning out...  

There might be something to what you are saying, but the question I have to ask is whether alarmism is bad.  Unless you don't believe in Peak Oil happening any time within the next two decades, and you believe that we're really going to see the 120 Mbpd needed to support growing oil conumption in China, India and other developing countries, then there is good reason to be concerned.  A little bit of alarmism can help get people worried about the situation, as currently few are.  

Even if oil does not peak for quite a while, there are signs that oil production growth cannot keep pace with demand growth.  That means higher oil prices going forward.  Or maybe your quibble is that by being alarmist the idea of peak oil becomes discredited.  I guess I can agree about that one.  But people should definitely be made aware that a problem exists, and probably will exist even in the most optimistic scenarios, simply due to demand growth from China, etc.  

Having read Simmon's "Twilight" rather closely, I don't consider him an "alarmist." More a prudent Paul Revere.  

The conventional wisdom when he published was that Saudi Arabia has unlimited oil, and the party can go on indefinitely. That illusion is rapidly dissipating, and, as we see from S.A. production figures, it increasingly looks like S.A. could well be in decline.

If Saudi Arabia is in decline, then global decline is not far behind.

Given that this is certainly the most important event in modern history, it is utterly foolhardy not to call the alarm.  And that alarm has already borne fruit, as we see from China's frantic purchases of all the oil reserves it can lay it's hands on.

In fact, one could point to this growing realization for the rapid unravelling of the global economy and the equally rapid rise in mercantilism, led by Bush and his Iraqi misadventure.

He did however say on CNBC that Hurricane Rita was of "Pearl Harbor magnitude" for the US. Could easily have been I guess, but it wasn't.
There are a whole bunch of other pundits and cowboys here at TOD and in the MSM (Pickens, Simmons, Julian Darley, Heinberg, etc etc ad nauseum) that have jumped on the band wagon for personal notoriety, book sales and speaking engagements that use anecdotal info for their purposes and agendas and do nothing but create alarmism.
 It is probably unfair to attribute the intent of others. Doing so may cause people to disregard your other arguements, which would be a bad thing.
I don't understand how anyone can be discussing a "Peak" given that some 2 - 4 mbpd are currently off the market in Iraq and Nigeria alone based on man-made events.  Peak is a geological concept.  There is no doubt that if extractors had a free hand (and the economic incentive) to produce full out in just those two countries - not to mention Russia and the Caspian - there would be enormous supplies available to the market that would make Stuart's graphs look totally different compared with the "pessimistic" reality of artificially restricted production.  

Moreover, Stuart's chart is "believed to be all liquids" which apparently includes "renewable" bio-fuels, which is not even petroleum.  That tends to skew the numbers more optimistically.  So it seems to me that any discussion of Peak Oil based on published data is virtually impossible to have in anything like a Hubbertian sense.

I don't understand how anyone can be discussing a "Peak" given that some 2 - 4 mbpd are currently off the market in Iraq and Nigeria alone based on man-made events.  Peak is a geological concept.

There have been geopolitical upsets in the past (Iranian Revolution, Iran/Iraq War, Gulf War 1) which kept a significant amount of oil off the market.  During these situations Saudi Arabia, as swing-producer, was able to flood the market rather quickly and return the situation to normal - although this did not mean that there weren't price spikes during the duration of those crises.  This time though no one is in a position to act as swing producer, and that is the difference, which is why the "stubbornly" high prices today are not the result of geopolitical problems, but rather because of the economics of oil at or near the peak.
The ineffectiveness of a swing producer is not related to Peak, it is related to the magnitudes.  In 1960, ramping up 2-mbd was equivalent to almost 10% of global production.  Now those same 2-mbd moves are less than 4% of the global market.
And yet Saudi Arabia has failed to increase production by 2+ mbpd as promised every single year since 2004.
SA has what, 700 Princes making Statements?  Oh please.  If they and the odd political puffing is your source, it says much about your wrongheaded analysis. Aramco was crytstal clear at CSIS-Washington in March 2004 that there target was 12-mbd by 2016.  It was the basis of our own EIA/Aramco graph in our Depletin Scenarios.

Since then Aramco's Alqahtani has announced that they have brought this rate forward to 2010 and a new target of 11-mbd by 2008.

You totally misunderstand the nature of geological vs. human-caused events.  The Iranian and other past oil disruptions were NOT geological; they were caused by exoginous human events.  Hubbertian Peak relates strictly to the geological capacity of a given geography to produce oil, and the rate at which that oil can be produced.  In this case we are disussing the geography of the whole globe.   Therefore, to the extent that a given place (like Iraq) fails to produce oil strictly because of human problems, not geological capacity, the Hubbertian implication of that lack of production is invalidated.   That is why we cannot be discussing Peak Oil in a valid way by referencing charts of recent global oil production that cover time periods when significant amounts of oil were not produced simply because human events interfered with the capacity to produce.
2-4 mbd out in Iraq and Nigeria? Rubbish. 1,2 mbd tops.
Iraq: produced 2.5 mbpd 2 years ago.  Could be producing 3.5 - 5.0 anytime from now to a couple of years from now if the same fields were located in a peaceful spot like, say, Canada.

Nigeria: production is currently reduced by 500kpd from prior levels and could easily be another 1 - 2 mbpd beyond what the prior high water mark was if there were no hositilities to hold back development.

I was being conservative in saying that from a geological perspective production in Iraq and Nigeria could be 2 - 4 mbpd higher.

And what on earth do you mean by saying that there is no free hand or incentives to produce in Russia or the Caspian? More arrant nonsense.
The Caspian has been held back for years by political squabling over pipeline plans.  Russia has lots of oil to develop in its far reaches but says it is being held back by lack of investment capital.   I believe, and many agree, that the real reason Russia is not developing these fields is simply a go-slow decision on Putin's part - a form of hording.  
Russia is not a blank space on the map where you can project as much of anything as you want. It has a mature oil industry which has just recovered from the criminal revolution of the 90s. There's no wondrous new oil province there.
"What happened guys? Oil is trading kind of low, given the circumstances"

Oily "ceo" seems to know where the price of Oil "SHOULD" be under the "Given  Circumstances" ... and apparently the oil price is Not where Oily THINKS it should be so that proves ... hmm, what does that prove Oily ??  

"What many predicted was World War III has already faded to the point where everybody except Anderson Cooper(CNN) and Fox News have packed their bags "

Oily uses Television coverage to determine the intensity and importance of the war in Lebanon...

"What happened to Iran's nuclear program? What happened to Iraq?"

Apparently Oily "ceo" has not seen coverage of these issues on TV lately and has not picked up a newspaper in some time. Guess what Oily, just because CNN hasn't told you more about them lately doesn't mean either problem has gone away.  

"Is hot weather and reality-shows the answer to all our problems"

Reading your post, it does look like TV is YOUR answer.

Be patient and Stay Tuned Oily "ceo" - CNN will eventually get around to answering your questions about Iran and Iraq and WWIII, etc.

Bakhtiari (sp?) has already weighed in with his opinion on these numbers.  He believes the numbers are inflated, especially by Russia.
It is also interesting to note that according to this article, Iran's "supply" includes a fair amount of oil sold out of storage:

Iran, Opec's second-largest producer, is expected to pump 4 million bpd in July, about the same as in June, as it shifts unsold barrels of mainly heavy crude.

"Iran SEEMS TO BE GETTRING RID OF ITS OIL IN STORAGE, so they are well up on previous months," Gerber said.

In an estimate last month, Gerber put Iranian output during June at 3.8 million bpd.

Does this mean that Iran is producing 3.8 million a day yet selling 4 million a day due to selling 200k a day out of storage?

Two points about this.  First, this inflates artificially the production numbers.  My second point is more of a question, why is Iran selling oil out of storage?  

All the agencies adjust their figures for additions to and withdrawals from storage.
Maybe they are selling the oil because they expect to be bombed sooner or later and might as well make sure that the burning oil doesn't make a big mess.
I read a couple of days ago that Iraq's northern pipeline had once again been sabotaged, and that they were trying to get production going again.

I guess Iraq's kind of the swing producer these days ...

Hello Stuart,

Thxs again for your work.  Ok Freddy Hutter, does this fit Skrebowski's Megaprojects bottom-up analysis--are we on schedule to increase net world supply roughly 2 million bpd each year?

Megaprojects update excerpt:
To establish future production levels we can devise a simple equation:

Future production levels in year n = Current production levels + gross new capacity from new projects to year n - gross natural decline to year n + capacity gains from normal field operations to year n.

For example if Saudi is producing 9.5 million b/d in mid 2006 how much will it be producing in mid 2010?

Adding 9.5 million b/d to the gross new capacity of 3 million b/d gives 12.5 million b/d. However, natural depletion has removed 0.6 x 4 = 2.4 million b/d giving a net capacity of 10.1 million b/d.

The unknown is how much of that annual 0.6 million b/d of depletion can be offset by the normal field work (infill drilling, workovers, debottlenecking etc). If it can all be offset Saudi production could rise by 3 million b/d while if none of it can be offset Saudi production would only rise by 600,000 b/d (3.0-2.4). In addition we don't know if natural decline rates are stable or accelerating. Our only public window into the balance of these opposing trends is current production rates. If a country's production rate is less than would be expected by adding new capacity to existing flows, then either the anticipated new flows are not fully materialising, or normal fieldwork is not offsetting natural decline rates.

Just a guess on my part, but if Iraqi oil exports were removed: no upswing, but a continuation of the plateau.  According to this link:  the Iraqi exports of 2 million barrels/day just dropped to 1.6 million because the northern pipelines were damaged again.

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

Chris's target works out to be about 2-mbd increase in each year from 2007-2010.  IEA says the refinery capacity will be there to attain that but their supply forecast is very slightly less than his for 2010.  I am expecting a major cutback in IEA's long term outlook(s) this Autumn.
Hello Freddy Hutter,

Thxs for responding.  Ok, so far so good.  Chris Skrebowski admits to the limitation of his method:

 "In addition we don't know if natural decline rates are stable or accelerating. Our only public window into the balance of these opposing trends is current production rates. If a country's production rate is less than would be expected by adding new capacity to existing flows, then either the anticipated new flows are not fully materialising, or normal fieldwork is not offsetting natural decline rates."

This goal of accurately gauging this rate of decline is a big problem, not only for Chris's realtime monthly tracking, but also how it distorts the HL model as DuncanK's Sudia modeling illustrates.  The Extreme Production Measures [EPM] discussed in a earlier thread threatens to throw everyone off-track if Yibal-like decline rates start kicking in.

So repeating again from an earlier post: is there any way to break out oilfield extraction percentages of EPM extraction versus regular extraction to guesstimate how much peakshift and depletion rate distortion has been induced into the natural Hubbert Curve for a field?

So this seems like a big 'geologic' hurdle we need to overcome to more accurately assess the global oil situation.  

The next one seems to be 'logistical': Chris's project time-derating system of about 20% or two months.  If one accepts the Law of Diminishing Returns, the closer we actually get to the real Peak: the time delayed derating factor should be increasing by porportionately larger amounts.  I think we are seeing evidence of this already as the shortages of labor, rigs, and necessary infrastructure building is hampering oilfield project deadlines already.  This adjustment might then more accurately reflect the ever-increasing efforts to overcome the ever-decreasing ERoEI of bringing oil to the end-user and how high EPM depletion rates creates positive feedback that will be increasingly difficult to overcome.

If we could somehow fully account for these effects then maybe the peak arrives sooner and declines faster than Chris Skrebowski currently predicts.

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

Again, your pessimism and that today of Darwinian don't reconcile with accepted estimates of URR. You cannot have stranded URR ... that's an oxymoron.

To say oil peaks before 2010 insinuates that BP have overestimated URR twofold.  That's just not plausible with all the scrutiny that URR has been subjected to over the past.

The key is that some of what is considered TECHNICALLY ultimately recoverable (URR) may not be energetically recoverable (or barely so). When they start drilling in 1 mile deep of water and then drilling 5 miles below that, all the bells and whistles needed to get that super hot sulfur oil out from that deep is using energy.

I wonder if BPs internal URR projections look solely at price or also at energy (they probably have estimates of X billion barrels recoverable if oil is >$100, Y billion barrels recoverable (at profit) above $150, etc)

To base ones opinions on URR also is not perfect. Net URR would be a better metric, though of course its quite difficult to figure.

My understanding is URR only includes economically recoverable resources.  So if a find is recoverable only at $150/bbl oil, then it is not included in URR figures today.
My question is I wonder if ALL analysis done by the oil majors is economic as opposed to energetic:  using price forecasts etc..?
"You cannot have stranded URR ... that's an oxymoron."

URR would presumably include all that Iraqi oil, which can cheaply be produced IF there is stability. If Iraq goes into major and extended civil war, then what we considered part of URR is stranded.

Once again you state that peak oil could not be now because of ESTIMATES by people. You do realize that BP and others were completely wrong about the US in 1971, Freddy? You do realize that Shell was completely wrong about Yibal, Freddy? You do realize that just about every major IOC was completely wrong about the North Sea, Freddy? And there are plenty more examples, Freddy. You do know that the sum cannot be greater than the parts here?

Now tell me again why current URR estimates can't be wrong. Tell me and watch me laugh in your face, because the IOCs and NOCs have been wrong in the past and will be wrong again.

In other words, look at actual data, not estimates, as estimates can be fudged, politicized, etc. In the words of Chris Skrebowski, observe what companies do, not what they say.  What they are doing is not replacing reserves fast enough.
Twenty years ago the reserves/production ratio was 40yr.  Today it is 40yrs.  U'r not making any sense.  What is the incentive for oilco's to explore at a greater rate than that sufficient for 40yrs?
I received this quote in an email from a very senior person with oil responsibilities in a big corporation. He is regarded as a serious expert and ethusiastically pointed to this quote as proof that supply is adequate. I know less on this topic than others - I don't have any interpretation of the Exxon quote.  I would be interested to hear any feedback you all have. This is the evidence people are looking at and saying there is no peak.

"Liquids production of 2,701 kbd (thousands of barrels per day) was 233 kbd higher.
Higher production from projects in West Africa and increased volumes in Abu Dhabi
were partly offset by mature field decline, entitlement effects and divestment impacts.
Excluding entitlement and divestment effects, liquids production increased by 14%[2Q06 v 2Q05]."
ExxonMobil, 2Q06 Results Announcement, 27 July 2006

Hello GreyZone,

Please encourage Freddy to continue his efforts, instead of laughing in his face.  His analysis is valuable to our discussion.  Obviously, the weaknesses of bottom-up and top-down analysis have already been discussed-- we as a group need to help develop some new statistical model that can more accurately incorporate the weaknesses inherent in both.

I like TODer TheLastSasquatch's idea of somehow doing a ERoEI analysis and its effect on future global flowrates.  This is just a guess, but it might show that the eventual decline of Nigerian light, sweet may have a greater effect on future cumulative flowrates than Cantarell depletion due to the differences in their 'crude ERoEI' and the total required embedded energy in their respective infrastructures to get a reasonable projection of worldwide URR.

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

Not sure if you guys already saw this, here is a link to Chris' presentation about this on the last ASPO conference. Interesting for people that like to know more:

It states peak by 2008, but peak could be this winter.

That is a very interesting powerpoint file.

It seems that he sent ALL his slides, even the ones he did not present (ie. past work or work in progress).   The presentation which corresponds to his latest public statements appears to be in the first half of the slides and ends with a sign off half way thru and then a couple of blank slides and there is a lot(20+ slides) which are more disorganized, and this is where you find the 2008 peak info.

Interesting,  its like a peek (hehe) into his mind.

It's all about population!

I think that this might be his previous estimate which was 2007 - 8, I believe. His latest revision is 2010-ish,


Good stuff, Stuart.  My passion is for the long term projections and watching the monthlies helps me valtidate the trend.  I don't want to mess up your methodology (lies, acutally i do!) but u will eventually find, now that u are getting to know the IEA pattern of revisions, that the logical next progression is to watch the progress of the revisions via the quarterlies.  There are only two revisions to the monthlies.  But the revisions don't stop.  They never stop.  Never.  And u can only catch them on the quarterlies or the year-over-year monthly comparisons in the narrative.  We thot June 2005 was 84.1 by the last revision in September.  But the commentary in July 2006 shows us that June 2004 was since revised to 84.45-mbd.

Case in point for quarterlies:  Jan/Feb/Mar of 2006 have been ever increasing in the revisions and attained highs of 84.19/84.72/84.72. That should yield a quarterly of 84.54-mbd.  But the July 12th Tables shows 85.12-mbd 'cuz of subsequent upside revisions.  And sometimes the quarterlies go down, not up.  I am hoping that this can be accomodated into your Moving Avg.  I will sometimes change the monthlies to reflect it by changing the values to 3 times the Quarterly.  In the case above, i would use 84.54 for each of Jan/Feb/Mar.

Myself, i use the IEA data only on the "past" consumption part of my Scenarios Graph.  But after all i've said it's not due to the Q's ... it's the annuals.  For the Q's are also only revised so many times.  You have to catch the revisions on the old stuff by watching the annual revisions.  And by my post this morn, u saw evidence of 2003/2004/2005 being amended by a high of 0.4-mbd (2005) ... one of the largest i've witnessed.  And really screws up one's year-over-year assumptions at this later juncture.  It too can be accomodated in moving averages by some arbitrary but insightful manipulation.

It was this type of later trend analysis that crystalized the effect of speculation in the marketplace by watching the changes in stock builds long after it happened.  Unfortunately, being honest about these later revisions can illustrate that judgement of certain occurences in the past were based on faulty data.  And force re-evalutations.

I see your point, but I'm also concerned about plotting a graph which confounds data at all different stages of revision, and involves a certain amount of interpolation from aggregate data, especially since the revisions seem to be somewhat systematic in character. There's something to be said for having all the data at the same point of revision (except perhaps the last point or two which I can color-code). I'll think about the issues you raise next time though.
Hello everyone.

I'd like to see the numbers from each agency for Conventional Oil (Petroleum). This "All Liquids" is a very loose definition to me.

I thought that EIA was publishing numbers for Conventional, but that's not the case. Here's what they're talking about:

"Oil Supply" is defined as the production of crude oil (including lease condensate), natural gas plant liquids, and other liquids, and refinery processing gain (loss).

I wonder what "other liquids" exactly means. Does it include CTL? And GTL?

I am wondering about the increasing biofuels. The 'oil peak' is considered to refer to fossil fuels, which are finite. Including an ever growing increase of renewables in the figures might blur the conclusions. What if biofuels are taken out of that 85.1 mbd figure. Would previous numbers be higher, compared to the most current number?
Lads, the EIA does publish numbers for conventional. It is called Crude + Condensate. The reason they include condensate, I think, is that it is just mixed in with the crude and shipped out. At any rate we can use that figure and leave out all the propane, butane, refinery process gain, ethanol, biodiesel or whatever.

The only measure of what is really happening in the oil patch, is crude + condensate. Everyone would do well to ignore the ethanol, biodiesel or whatever input because that is just a fudge factor.

So Lads, if you really want to know what is happening, just build graphs using crude + condensate. That will give you the true trend.

"The only measure of what is really happening in the oil patch, is crude + condensate."

I agree.  I suggest that we define "oil" as substances which refiners buy to convert into refined petroleum products.

According to the recent LA Times story, Mexico's oil production has been falling for three months--coincidentally when Mexico hit the 50% of Qt mark, based on Khebab's plot.  

Petrologistics said that Saudi oil production will probably be below 9 mbpd this month, down about 5% since December--conincidentally when Saudi Arabia hit the same (HL) point at which Texas started declining.

World crude + condensate production is down about 1% since December--coincidentally when the world hit the 50% of Qt mark, based on Deffeyes' work.

Notice a pattern?

However, what continues to baffle me is that people are seriously suggesting rising oil production when the four largest producing oil fields are almost certainly all declining.

Never underestimate the ability of the technotopians to miss the Forest for the few more hopeful Trees.  As you mention, "the four largest producing oil fields are almost certainly all declining" - now any reasonable person must see this, and the fact that so many of the world's countries have already peaked, as much stronger evidence overall than the bogus numbers spouted by the status quo seeking international agencies.  Anyone who doesn't see the peak right in front of our faces needs to stop the wishful thinking and start with the big picture.  Or did I miss a whole slew of enormous oil fields that are suddenly ramping up for production?  
"Anyone who doesn't see the peak right in front of our faces needs to stop the wishful thinking and start with the big picture."

I am reminded of the Tim Allen Movie, "The Santa Clause," where he kept asking "What happens if I fall off the roof?"  No one would answer.

Every time that I bring up the four oil fields point to the "Oil production will grow crowd," (OPWGC) they invariably refuse to answer, claim no knowledge of the subject or change the subject altogether--this happened  most recently at the Peak Oil debate on PBS.

We know that the world's second largest oil field is not declining--it's crashing.  

We can make a pretty informed guess that world's largest producing field is doing something between declining and crashing.  

But the fact that the world's largest two producing fields--representing 10% of recent crude + condensate production--are almost certianly declining is met by the OPWGC with a pretty good imitation of "See no evil; hear no evil; speak no evil."

Petrologistics said that Saudi oil production will probably be below 9 mbpd this month, down about 5% since December...

Folks, this is big news. A drop of below 9 mb/d would likely mean that Saudi could no longer claim that it is just holding back oil because of no buyers. It means that they are declining and declining pretty fast. Their desperate new drilling program is just not holding back the decline.

The next shoe to drop will be the Kuwaiti "official" announcement of its reserves. The new opposition party, which was swept into power in the last election, has promised to publish the actual true numbers "within days".

West Texas hits the nail on the head.

The cornucopians like Hutter are using the republican's big lie technique of repeating misinformation in order to prevent action.

Because we know oil is finite, the time to act is not when Hutter decides that the seven sisters have made enough money, but immediately in order to use the cheap energy we do have in order to rationally guided the power down.

Cherenkov, it's really not necessary to turn into an asshole to make your point.  My Scenarios are a compilation of other good people's work.  We added Koppelaar and Srebowski to balance the overall outlook.  Four of the outlook are ASPO Peakists.  You may find it humourous to shoot the messengers, but i do not find it amusing when u attribute your paranoia based agenda on my stuff and myself.  Please tone down the cheap shots or publish here and now what "misinformation" that i espouse.
"Cherenkov, it's really not necessary to turn into an asshole to make your point."

I suggest you heed your own advice if you expect the rest of us to treat you decently. And don't play ignorant. Or if you really are that dense, go read your own posting history to understand why people don't like you. You are the asshole, Freddy. You can stop being one any time you choose.

Cherenkov has got his style. It's good to hear him vent.
With all due respect, Grey Zone,

I was one of the first to call Freddy an asshole. I take all credit for setting the tone. I now retract that point of view, and wish others would as well.

One of the main problems, in my view, previously was that Freddy posted very infrequently. In fact, evidence that this irked many others as well can be seen in posts months ago.

This is no longer the case. Freddy posts quite regularly now and responds to his critics in numerous comments and responses. This is all I can ask for. Debate him.

Debate him. Try to get the attention you get from Freddy, from smekhovo or even Alpha Monkey. You won't. These guys can't handle any criticism. Though, I will submit it is because they have nothing important to say.

In fact, the only person I can think of who gets as much criticism and actually responds is Bob Shaw. Bob is superb at countering. Most run away. Freddy doesn't run away. He also doesn't call you an asshole on a regular basis, but has to put up with it from several people whenever he opens his mouth - they don't even read what he writes. Give him another chance. What would be sad is if he made some of us here look like fools. I'd like to avoid that. Pay closer attention to the subtleties of what he says.

I don't expect you to agree with me. That's OK. I'm just glad you read what I had to say.

I wonder what Deffeyes thinks about all of this.  This is the first time since his December prediction that we've really been up.  On the other hand, I believe that his prediction was for only conventional oil so without heavy, off-shore, ethanol, etc, he could still be vindicated.
I think Deffeyes is defining peak as 1/2 the oil produced (50% of Qt), not maximum produced, so I would guess he could care less.  We won't really know if he's right till we're all long dead, although we could guess with revised URRs.
Cynus, there is no conclusive evidence yet that we are up from December. I would bet that we are not. At any rate we will not know for another five to six weeks when the EIA publishes its June data. Remember we are not counting ethanol, biodiesel, or even propane or butane, all of which are included in "all liquids".

We know world natural gas has not yet peaked and probably will not peak for another decade, possibly two decades. Therefore counting propane and butane is not part of the peak oil game.

Crude + Condensate is what we are counting and I will bet you my next months social secuerity check that June 06 will not top December 05.

One more very important point. Offshore oil is included in Crude + Condensate. Heavy oil is also included in crude + condensate. The oil from the tar sands is included in crude plus condensate. All crude oil is included in crude + condensate. All these are already included in Deffeyes prediction. Other liquids are not.

Propane, butane, ethanol, biodiesel, methanol are not included in crude + condensate and have nothing to do with Deffeyes prediction, or my caculations into peak oil.

Everyone would do well to ignore the ethanol, biodiesel or whatever input because that is just a fudge factor.

I believe it's a mistake to ignore any production of economically relevant liquid fuel.  

Hypothetically, if I create a solar device that converts sunlight directly into premium unleaded, should I ignore that in my analysis?

JCK, we are not ignoring ethanol and biodiesel as being economically relevant, I am saying that they have nothing to do with peak oil. Of course they are economically relevant but they should not be used when caculating the peak in fossil petroleum.

After all, it is just plain common sense that ethanol and biodiesel are not fossil fuels!

If you are analyzing production tied to geological sources, yes - especially if you want to apply Hubbert-like methodology on it.

It's not the output, but the input that matters.

Could you please give a link to that?
An academic exercise that nobody cares about. It's like suggesting we make global warming look worse, by not counting the cooling going on in the Antarctic anymore...
Hi Freddy, I'm counting with the polar cooling and with the Mobile Polar Anticyclones.

Could you just link me to that EIA data on Conventional + Condensate? I fail to find it, I doubt it exists.

Go back up about 12 posts.  it was Darwinian that said this was available from EIA ... not me.
You want Table 1.1c of the EIA's International Petroleum Monthly (  It doesn't make much difference to the shape of the curve (it shows about the same plateau as the all liquids graph, just at 73mbpd+ versus 84mbpd+).  I'll post the graph next week when the EIA comes out with May numbers.
This "All Liquids" is a very loose definition to me.

But it's also the more important number.  Nobody cares, at the consumer level, where the liquid fuel (e.g., gasoline) product comes from.  I believe that it is important to consider all commercially relevant sources of liquid fuels, otherwise we're merely debating a purely academic issue.

Not exactly.  If the the consumer is angry that the price at the gas station is up because conventional oil is declining and we have to realy on ever more expensive heavy, deep water, oil sands, etc., then that is what they are angry about.  They don't know that that is what they are angry at, but it is.
If the the consumer is angry that the price at the gas station is up because conventional oil is declining and we have to realy on ever more expensive heavy, deep water, oil sands, etc., then that is what they are angry about.

Prices can be high for a variety of reasons.  Any increase in demand will drive prices higher (China, India) as will any increased risk of supply problems (Iran, hurricanes).  Increased reliance on more expensive forms of oil is only one of many possible sources for prices increases.

True, but as the supply mix changes the cost of fuel will continue rising -a continually rising floor or minimum is being placed under the price of fuel.
From where I'm sitting, both numbers are important and should be tracked. If "all liquids" stay high it is crucial to know if it's due to strong crude+condensate production or a ramp-up in alternative fuels. I would say it makes all the difference.
Can you please tell me what "Biofuels Reserves" means?
Hey folks, as far as I know the only entity publishing data on Conventional is O&GJ.

Ok IHS also, but you have to pay a lot of €$€$€$€ for it, O&GJ costs 50$/year.

The data from EIA has been discussed previously here at TOD, but has I quoted above it's close to those 'All Liquids' definitions from IEA and BP.


I wonder what "other liquids" exactly means. Does it include CTL? And GTL?

Lads: see this oil drum story
Very good, exactly my point. I didn't remember your post, sorry.

Can you please confirm to the folks above that EIA does not publish data on Conventional Oil?

In this July 2006 Oil Market Report, Saudi Arabia was  producing  9.06 mb/d in June, it was 9.22 mb/d a year ago. Since December 2004 (9.15 mb/d), we had Qatif (+500 kb/d), Abu Sa'fah (+150 kb/d) and Ghawar Haradh3 (300 kb/d). Therefore, basically 1 mb/d gone into offsetting decline. All data from table 3.
Thought I should point out to others the irony involved in the mountain in your graph background - it is called "Table Mountain", and local folklore has that it is the Devil's pipe smoke is obscuring the plateau. Not visible in the picure is Devils Peak!
:-) I'm rather pleased with it...
I thought it was agreed months ago that there was some double counting in volumetric terms for ethanol because of oil based inputs. Admittedly there may be a time lag and inputs such as fertiliser could be NG derived, not liquids. If that fraction (volume, not energy) was 80% without time lags then 0.5 mbpd of ethanol sucked up 0.4 mbpd of oil. The latter figure would have to be deducted from all liquids.

If peak postponers are right I guess we can expect petrol prices to drop any day now.

Ethanol derived from sugar cane returns 8 - 10 times that energy that goes into it, not all of which is oil. Some biodiesel is not far behind.

So while there is an element of double counting, in the case of sugar derived ethanol it is less than 10%.

To echo comments above, the Crude + Condensate number is the one to watch if you are interested in understanding petroleum supply dynamics. However, from a consumer perspective, useable energy is what matters, be it ethanol, electricity or whatever moves their wheels.

Jack, Are you talking about ethanol production from Brazil with high manual labor or from Hawaii/ Louisiana, high tractor inputs? Where is the 8-10 return  data from?
whether or not the supply is creeping up, isn't the issue whether this additional supply is of a quality of crude that can be handled by existing refinery capacity. if it isn't then that supply might as well not exist for now.
I'm giving a talk at a BP breakfast tomorrow here in Australia that the key issue is that we have two peaks (ie Twin Peaks the movie :)). The first is plain old oil as the man/women in the street know it (ie Beverley hillbilly oil that gushes under its own pressure) and then 'all liquids'. I'm sure that REAL oil has peaked given price premium gap widening between sweet/light crude and the heavy stuff, but all-liquids is still a few years away because of the IEA's 'oil' "...non-conventional oils include other hydrocarbons and alcohols (including Brazilian alcohol fuel and those used in gasoline blending elsewhere), Canadian synthetic oil production, Venezuelan Orinoco extra-heavy oil and orimulsion (bitumen), oil shales, South African coal-based and natural gas-based oil substitutes and methane-based blending components such as MTBE". We have Chris S coming to visit in 4 weeks from UK, so hopefully can explore futher with him. cheers from downunder.
There have actually been two tropical storms.  Beryl formed off of the North Carolina coast and moved north towards New England before curving off to the east, skirting Nantucket.
Right, and some people count last year's Zeta, which crossed over into early January. See Wikipedia for up to date info:

Here is a message board post from a hurricane board I lurk on:

This time last season we were up to the "F" storm,as of now we are 4 off the pace & soon to be 5. ALso @ this same time last season we allready had 3 hurricanes develop 2 of which were CAT 4's! & that was just the beginning. Just goes to show that last year we witnessed a historical event that we may not ever see again in our lifetime. No doubt that we will see some very busy seasons in the future & I am sure that this season will have a few memorable moments,but you'll never see a season like last season again...With or without global warming.

There was also commentary that this year's tornado season has been extremely light as well. Apparently global warming does not automatically lead to worsening storms every year. That's what the climatologists have said all along, but their message got drowned out by the alarmists last year. And no, this year's heat wave is not caused by global warming either. There have been plenty of heat waves in the past. The influence of global warming is subtle and no single event can be blamed on it.

The Gulf of Mexico is still hot. No hurricanes to cool it down. Now the hot water is moving up the coast. New York could get it this year.
I think I will bet that the insurance companies know more about this than I do, and they are raising their rates or fleeing the business.

Eventually the heat built up now will be released.
I suspect a Cat 4-5 hurricane in December.

Basically its not going anywhere and when conditions are favorable we will have our hurricanes this year and strong ones it just its starting to look like it will probably be later in the season. The number of hurricanes is related to variable local conditions its the strength thats related to global warming. I think you will find that from now on out when condition are favorable for hurrican formation we will get Cat 4-5 hurricanes.

Remember that the "Gulf Stream" is constantly taking heat from from the Gulf and moving it east and north where it has a warming effect on England and Northern Europe.
That heat won't just sit there, it will be disapated. It takes a series of just right metrological conditions for a hurricane to form. Warm water is just one of them.
A little historical knowledge is a good thing. Let's go back to the OMR of almost precisely one year ago (July 13) as reported by Green Car Congress.
Demand in the fourth quarter of 2005 should spike to 85.9 million barrels a day, according to the report. The agency also forecast a drop in supply of 155,000 barrels per day.

In its first projection for 2006, however, the IEA forecasts that growth in demand will rebound, with average consumption hitting 85.7 million barrels per day for the year.

Stuart's graphs are starting to look even more beautiful. But let us continue. Here's Adam Porter writing for the BBC (July 15, 2005).
The oil industry calls the problem 'data transparency'.

As an example this week is a 'revision' to oil demand growth in the United States in 2004.

Previously the growth in oil demand was thought to be 2.4%, about 484,000 barrels per day. In fact it was 697,000 barrels per day or 3.5%.

That is in fact 46% more than was previously stated - a huge revision.

"Oil market data is generally a black art like using a set of chicken bones," says Paul Horsnell of Barclays Capital. "If Columbus had thought he'd hit India when in fact he was in the Caribbean, that's about the level of oil market data."

Chicken Bones. Now the beauty of the graphs is fully apparent. I didn't mention voodoo, Horsnell did. Don't shoot the messenger.

If next month's figures were to show production figures up, say, another 500K bbl/day, wouldn't that suddenly push Stuart's projected peak out past 2010?

If that happens, shouldn't the  rational PO investor try to finesse the resulting short-term futures correction by immediately taking  profits on his /her oil-based positions?  

Not necessarily. China's future growth is the wild card. Even if production increases substantially, China could suck it all up (and support prices) if they can maintain 10-11% growth for 10-15 years (unlikely but certainly not impossible).
Good point, but wouldn't projected supply, not just demand, determine  futures prices?
Well, both supply and demand matter, of course. In one of my first posts here, last year, I argued that supply projections were inherently uncertain, but that demand projections were also inherently uncertain. Whether we have a surplus or a shortage requires subtracting demand from supply and looking at whether it is positive or negative. But as anyone who has studied statistics knows, when you have two data series of approximately equal magnitudes with given uncertainty levels, and subtract them, the uncertainty goes through the roof! You can't even tell the sign of the result. That is the situation we are in with regard to oil forecasts for the next few years.

And indeed, market prices reflect this uncertainty. Jim Hamilton used options to calculate the 95% confidence interval for oil prices a few years out, and the range was from $15 to $250! The truth is that we really have very little knowledge about whether demand will outpace supply or vice versa over the next few years.

Your argument doesn't quite compute.  If there is a new piece of information, then, all things being equal, there should be an advantage to the futures trader who possesses that information over the one  who doesn't.  

In this case, if we believe in Stuart's methodology and that methodology suddenly moves its projected peak out three or four years, then we might rationally choose to act on that information (take profits) before that info is generally arbitraged.

Of course, there's no guarantee that we would make money on our decision to sell now.  But it seems to me that doing so might be a reasonable play given the relative probabilities of outcomes if we strongly believe our (temporarily) privileged information to be  sound.

Halfin, I shouldn't have said your argument doesn't compute.  I should have said it doesn't answer my original post.  Anyway, your post is more interesting than mine, so thank you for your response.
Wow! A lot of good stuff covered today.    I'm going home to work in my garden, can some pickles and stare at my chickens over a bottle of red.
THAT sounds like a very high Happiness Returned on Energy Invested. (and good for the planet to boot)
Today I increased the flowage on my well by a factor of two. Day well spent. Well dug entirely by hand, with help of shovels and post-hole digger. The Big Secret:

I used my garden hose and a nozzle for some very inefficient but highly effective hydraulic drilling.

Efficiency never has impressed me much.

Now effectiveness . . . . Effectiveness is a "whole 'nother breed of animal."

Not just Alberto! How could you forget the menace of Beryl, wandering up the coast with her threat of moderately strong wings & an inch or so of rain, while the weather service debated the important issue : Was it pronounced Barrel or Burl?
Nevermind - duplicate.

"EIA issued a Federal Register notice announcing its plan to discontinue the collection of data on Forms EIA-182, Domestic Crude Oil First Purchase Report, and EIA-856, Monthly Foreign Crude Oil Acquisition Report, after the July 2006 data collection."

Stuart, as one of the ones asking for a production graph going back further than 2002, thank you for providing this in your plateau background thread. Even better that you overlaid price information on the same graph.
Don't forget the error bars!

The figures are not that accurate, so why argue as if they were. If the figures are even 1% accurate I would be amazed - that kind of accuracy is unknown in world data even if many of the sources didn't have reason to lie. That's about to 850,000 barrels a day or twice the month-by-month standard deviation.

The EIA has made an attempt to estimate the sampling error (see ) but they can do almost nothing about straight out lies. Since many of these figures come from countries which do not allow independent audits, and who have every incentive to hide bad news from their own populace, let alone the rest of the world.

I have pointed out before that Venuzuala one its own seems to have production figures of between 2.1 and 3.3 million barrels a day, according to the source. Arguing exactly when the peak will be is like trying to estimate angels on the head of a pin - at the bottom pointless No pun intended.

BTW. Remember also that Peak Oil is not a football team with us cheering on the sideline. It matters and an early Peak is actually very bad news, unless you are insane and your name is Max.

Actually, an early peak means less fossil junk in the air, and that's a good thing. A late peak means that the decline rate will be faster, and there will be more people who suffer from it, and we are more dependent on cheap energy. No, I prefer an early peak.