World Oil Forecasts Summary - Crude Peak Still Holds In 2005, Total Liquids Static Until 2009

[hatrack]

Fig 1 - Total Liquids Supply & Demand to 2012 (bottom up forecast) - click to enlarge

EDIT

1. World Total Liquids Supply & Demand
Although crude oil & lease condensate (C&C) production is forecast to continue declining, the total liquids supply remains on a plateau until 2009 (Fig 1), due to offsetting production increases from natural gas plant liquids (NGPLs), ethanol and XTL (BTL - biomass to liquids, CTL - coal to liquids and GTL - gas to liquids). The main causes for the end of the total liquids plateau in 2009 (Fig 1) are that the C&C production decline rate changes from 1%/yr to 4%/yr in 2009 (Fig 3) and the production growth from natural gas plant liquids stalls (Fig 15).

Is future total liquids production likely to exceed the current peak of 86.13 mbd on July 2006? It might be possible but it appears unlikely. Maintenance in the North Sea would be mainly responsible for the big drop in Norway’s production. After the maintenance is finished, North Sea production should increase in the next few months but then North Sea production should resume its decline. Mexico's production is in decline now. Former USSR production might increase by a small amount. Canada's production should increase slowly but the oil sands are experiencing production constraints and despite claimed reserves of up to 315 Gb (billion barrels), the oil sands will probably produce, at best, a maximum of only 2.5 mbd (million barrels/day). Biofuels production should also continue increasing. Non OPEC total liquids production might increase slowly, assuming that no unexpected disruptions occur.

The challenges of increasing world production are highlighted by the former Saudi Aramco exploration and production head, Sadad Al-Husseini, who made this recent statement regarding the new sentiment of oil producers: "There has been a paradigm shift in the energy world whereby oil producers are no longer inclined to rapidly exhaust their resource for the sake of accelerating the misuse of a precious and finite commodity. This sentiment prevails inside and outside of OPEC countries but has yet to be appreciated among the major energy consuming countries of the world."

Al-Husseini also made this statement in 2005 about the physical ability of the world to increase production: "You look at the globe and ask, ‘Where are the big increments?’ and there’s hardly anything but Saudi Arabia,’’ he said. ‘‘The kingdom and Ghawar field are not the problem. That misses the whole point. The problem is that you go from 79 million barrels a day in 2002 to 82.5 in 2003 to 84.5 in 2004. You’re leaping by two million to three million a year, and if you have to cover declines, that’s another four to five million.’’ In other words, if demand and depletion patterns continue, every year the world will need to open enough fields or wells to pump an additional six to eight million barrels a day — at least two million new barrels a day to meet the rising demand and at least four million to compensate for the declining production of existing fields. ‘‘That’s like a whole new Saudi Arabia every couple of years,’’ Husseini said. ‘‘It can’t be done indefinitely. It’s not sustainable.’’

It is possible, but unlikely that world total liquids production will exceed the current peak of 86.13 mbd because this would require simultaneous and significant production increases from both OPEC and non-OPEC countries. As world total liquids production is forecast to decrease to 2012 (Fig 1), two important consequences are likely to occur. First, as demand is forecast to increase, prices are forecast to rise, using short and long run price elasticities, which will force demand downwards to equal supply. Second, the decreased available supply may invoke the IEA Response System for Oil Supply Emergencies. Unexpected supply reductions could trigger oil rationing among the 26 countries which are signatories to this IEA Response System, but unfortunately China, Russia, India and Brazil, which are not signatories, are highly unlikely to agree to the IEA’s rationing method. The resulting tensions, from oil supply shortages, among the signatory and non-signatory countries could lead not only to continued competitive oil bidding, but also to continued conflicts and violence in order to secure vital oil supplies.

EDIT

Much, much more at:

http://www.theoildrum.com/node/3064#more

[neverforget]

1. I really like the Oil Drum. It's a little too technical for me but it is an

interesting read.

[GliderGuider]

2. This is precesly why net oil exports are going to be the boojum

As you look at the demand curve rising above the supply curve, remember that the demand within exporting nations will be completely satisfied from their own production. That leaves the importing nations to absorb both the shortfall due to their own demand and the additional supply shortfall due to the behaviour of the producers.

Net oil exports are where all the action is going to happen over the next 5 years.

[XemaSab]

3. How does the United States fit in there?

I know we drill an enormous amount of oil, but we're still an importer partly due to quality and partly due to demand.

If you just were to look at the US supply/demand chart, what would that look like? And can we conserve our way down to some understanding between the two lines without a total collapse of the economy?

-Xema the Closet Isolationist ;)

[GliderGuider]

4. The USA imports two thirds of its oil consumption.

The US uses 20.6 million barrels of oil per day, of which it produces 6.9 and imports the other 13.7.

The net export problem is going to hit the USA harder than any country on Earth.

[Nihil]

5. And the point where the fan gets coated ...

... is when the right-hand axis starts to be calibrated in Euros ...
:evilgrin:

[Strelnikov_]

6. We fit right between the hammer and the

anvil.

If we were to begin a crash program, today, we probably could somewhat mitigate the worst effects of geologic peak, IMHO.

Problem is, we are already seeing the initial effects of geologic peak on geopolitics.

At some point, someone who did not prepare and is wedded to the past, is going to do something stupid in order to try to grab some of the diminishing resource.

This will result in a massive shock to the economy and social order, more than likely leading to collapse.

Sorry, but that the way I see this playing out.

In the end, the choice between these two alternatives — Grab the Oil or Energy Reconfiguration — this decision is much bigger than oil alone. It is a choice about the fundamental ethos and, in fact, the very nature of the country. Most immediately, it is about democracy versus empire. In economic terms, it is about prosperity or poverty. In engineering terms, it is a matter of efficiency over waste. In moral terms this is the choice of sufficiency or gluttony. From the standpoint of the environment, it is a preference for stewardship over continued predation. In the ways the US deals with other countries it is the choice of co-operation versus dominance. And in spiritual terms, it is the choice of hope, freedom and purpose over fear, dependency and despair. In this sense, this is truly the decision that will define the future of America and perhaps the world.

- Robert Freeman, “Will the End of Oil Mean the End of America?,” 2004

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http://www.eia.doe.gov/emeu/international/oiltrade.html

All in Mbbl/dy

Top World Oil Net Exporters, 2005

Saudi Arabia 9.1
Russia 6.7
Norway 2.7
Iran 2.6
United Arab Emirates 2.4
Nigeria 2.3
Kuwait 2.3
Venezuela 2.2
Algeria 1.8
Mexico 1.7
Libya 1.5
Iraq 1.3
Angola 1.2
Kazakhstan 1.1
Qatar 1.0

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Above represents 39.9 Mbbl/dy of 42 Mbbl/dy world export market
18.7 Mbbl/dy of above in Persian Gulf region


Top World Oil Net Importers, 2005

United States 12.4
Japan 5.2
China 3.1
Germany 2.4
South Korea 2.2
France 1.9
India 1.7
Italy 1.6
Spain 1.6
Taiwan 1.0


Top World Oil Consumers, 2005 (Domestic production in parans.)

United States 20.7 (8.3 - 40%)
China 6.9 (3.8 - 55%)
Japan 5.4 (0.2 - 4%)
Russia 2.8
Germany 2.6
India 2.6
Canada 2.3
Brazil 2.2
Korea, South 2.2
Mexico 2.1
France 2.0
Saudi Arabia 2.0