A refutation of the Peak Oil kool-aid.

[jimsonweed]

http://lewrockwell.com/orig9/deming9.1.1.html

Bottom-line: if you are long natural resources, you are short human ingenuity. I am long human ingenuity, and always will be. Peak-oil predictions are wrong because they neglect to account for energy prices and new technology.

[roger7]

Calling Ghost Ryder, are you there OBG? R7

[Ghost Ryder]

http://lewrockwell.com/orig9/deming9.1.1.html

Bottom-line: if you are long natural resources, you are short human ingenuity. I am long human ingenuity, and always will be. Peak-oil predictions are wrong because they neglect to account for energy prices and new technology.

There is only a singular way to refute a Peak in oil production.... you gotta set a new production record. The EIA data for Dec 2011 for global crude oil production came out last week. Thus we have the EIA data for all 12 months of 2011 and what do they average?

http://www.eia.gov/cfapps/ipdbprojec...eq=M&unit=TBPD

As you can see from the EIA link above, the 2011 crude oil and lease condensate global production was 73.965 MBPD.


Here's the EIA numbers on crude plus condensate;

2002 world produced 67.158 MBPD at $21.68/barrel

2003 world produced 69.433 MBPD at $35.76/barrel

2004 world produced 72.476 MBPD at $43.82/barrel

2005 world produced 73.718 MBPD at $56.27/barrel (despite Hurricanes Katrina and Rita knocking out US GOM production)

2006 world produced 73.430 MBPD at $63.74/barrel (why the production drop despite higher prices?)

2007 world produced 72.988 MBPD at $77.19/barrel (why the production drop despite higher price?)

2008 world produced 73.671 MBPD at $100.28/barrel (How come doubling the 2005 price with double the 2005 rigs resulted in less oil?)

2009 world produced 72.314 MBPD at $45/barrel

2010 world produced 73.642 MBPD at $78/barrel

2011 world produced 73.965 MBPD at almost $100/barrel.


As you can see from the above data, 2011 finally took out (barely) the 2005 record. The scary thing is that drill technology improved by leaps and bounds and the Rig Count is twice as high. So not only do we operate thousands more rigs, but those rigs are dramatically faster.

The USA operates more drilling rigs than every other country in the world COMBINED because nobody else subsidizes oil production nearly as much. Take away the government handouts and USA petro production collapses. It's another Zombie Industry existing on taxpayer benevolence.

The first Trillion barrels humanity produced came easy. The second trillion will require a perpetual bull market to prevent production collapses.

Can humans achieve infinite growth from a finite fossil fuel base? Time will tell....

[NE sandhiller]

I'll just throw this in here, probably apropros of nothing.

Or could the fact that we're refining the lower-quality oil mean something?

***

http://money.cnn.com/2012/04/10/news....htm?iid=HP_LN

Refinery closures risk Northeast gas price spike
By Steve Hargreaves @CNNMoney April 10, 2012: 5:36 AM ET

NEW YORK (CNNMoney) -- While gas prices soar to record levels, many U.S. refineries that make and sell gasoline are going broke.

Nearly 50% of the refining capacity on the East Coast has either shut down or may shut down within the next few months.

If gas shortages develop due to the closed refineries, East Coast drivers could face higher prices than they otherwise would later this year.

Sunoco (SUN, Fortune 500), which closed its Philadelphia-area Marcus Hook refinery in December and is trying to sell another facility nearby, said its refining businesses has been losing $1 million dollars a day for three years running.

Last fall, ConocoPhillips (COP, Fortune 500) closed its Trainer refinery, also in the Philadelphia area.

If all three refineries were closed, that would leave just six operating refineries in the Northeast.

The refineries are losing money because they are old and cannot process the cheaper, heavier types of oil that are increasingly in supply from Canada's oil sands, Saudi Arabia, Venezuela and elsewhere.

The Sunoco refineries can process only the types of "light, sweet" crude imported from West Africa or the North Sea. The lightness refers to the oil's density, the sweetness to its sulfur content.

Light, sweet oil is the easiest to turn into gasoline -- but also costs about $20 more per barrel.

Refineries that have been upgraded and expanded along the U.S. Gulf Coast are capable of turning the heavier, cheaper oil into gasoline.

East Coast gasoline shortages are a real possibility -- but not because there isn't enough gasoline in the United States. The real problem lies in transporting that gasoline to the Northeast.

Analysts worry there won't be enough barge, tanker or pipeline capacity to bring the gasoline to market.

"There are going to be logistical problems getting product into New York," said Ben Brockwell, an analyst at the Oil Price Information Service. "The people I talk to are expecting shortages from August through the rest of the year."

The supply shortages would occur at gasoline terminals, often identified by those giant, white, round tanks seen near ports and refineries.

And that could drive up gas prices, though the impact should be temporary -- eventually, refiners in the Gulf Coast, Europe or Newfoundland would seek to take advantage of the higher prices by shipping gas to needed areas.

The worst of the supply crunch would come after the peak summer driving season when prices won't likely be as high as they are now.

The U.S. Energy Information Administration has been monitoring the situation. While it isn't quite as alarmed as Brockwell, it does see possible trouble.

"The potential loss of the Sunoco Philadelphia refinery presents a complex supply challenge," the agency said in a recent report.

First Published: April 10, 2012: 5:33 AM ET

[Ghost Ryder]

Wow Sandman! That's quite the post! As I started reading it, "Enter Sandman" by Mettallica started playing on my Country station which is especially odd seeing as how it's Sunday AM and all. Odd but fitting.


The numbers I quoted above were for all crude oil including unconventional tar oil. The light sweet stuff is doing a nose dive.... Anyway it matters because while the Gulf Coast refiners can crack tar oil, it takes a lot of energy. In the past few years oil production and refining got worse than corn ethanol on EROEI. In a few more it will require more Treasury graft.

[Ghost Ryder]

Since I first read Sandman's post above and considered how out of reach the price of petrol is gonna get for folks without scooters, I figured, "What the hell." and bought a 7.3 F250 just to trick-out with giant tires and winches and flames and smokestacks and everything. It's like in "Lonesome Dove " when Gus and Deets chased the last of the buffalo, "Cuz they ain't gonna be no more chances". Might as well partake in the orgy before its over for good.

Thinking hard about going to the 150th of Gettysburg as a Reenactment rider in Rebel Cavalry, it would be something to tell great grandkids about while real Civil Wars fought on horseback are the norm in their lives.