Crude Oil Peak

ASPO: 2020 crude oil production down by around 8 mb/d

If everything goes well, that is. Armed conflicts in oil producing countries, socio economic unrest and other unforeseen events impacting on oil supplies are not included in this estimate. The production curves shown here (whether ASPO or IEA) are upper (oil-geological) bounds.

In the Catalyst show “Oil crunch” the President of ASPO (Association for the Study of Peak Oil and Gas), Prof. Aleklett from the Uppsala University in Sweden, mentioned that the IEA’s extraction rates in their WEO 2010 are too high.

In a November 2010 lecture at Sydney Uni, he explained:

“In contrast [to the IEA], the Uppsala group has shown, using the same IEA data on existing reserves and expected future discoveries, that global oil production will fall, not rise. This is because the IEA has assumed unrealistically high rates of production from the oilfields remaining to be developed.”

http://sydney.edu.au/sydney_ideas/lectures/2010/professor_kjell_aleklett.shtml

Let’s have a look what that means for crude oil production from 3 types of oil fields: existing, new and yet-to-find.

We superimpose Prof. Aleklett’s Uppsala model (left) on the WEO 2010 – New Policies Scenario (right) for each type.

Aleklett_Uppsala_WEO_2008 IEA_WEO_2010_Crude_Oil_Plateau

In the following graphs, the solid fill areas are from the WEO 2010, the vertical columns from Aleklett’s projection (only available up to 2030).

(1) Crude oil from existing fields

Comparison_WEO_2010_Aleklett_fields_in_production

The decline in Aleklett’s estimate is initially steeper, 4% pa compared to the IEA’s 2% to 4% pa until 2020. The difference is around – 9 mb/d by 2015 and – 6 mb/d by 2020. Only after 2025 enhanced oil recovery (EOR) gives higher production figures than the IEA.

(2) New crude oil fields

Comparison_WEO_2010_Aleklett_new_fields

Up to 2020 the estimates are not much different but then diverge considerably.

(3) Oil fields yet to be found

Comparison_WEO_2010_Aleklett_fields_yet_to_be_found

Aleklett’s estimate for 2020 is 2 mb/d less and then trends towards half of the IEA WEO 2010 figure.

Subtotal crude oil:

Comparison_WEO_2010_Aleklett_crude_oil

The gap between the WEO 2010 and ASPO is shown in red: – 6.8 mb/d by 2015, -7.5 mb/d by 2020 and – 13.3 mb/d by 2030. As data have been taken from the graphs, the geometric accuracy would not be better than 0.5 mb/d.

An overall decline of around 8 mb/d by 2020 is equivalent to – 1.1% pa, although decline rates up to 2015 seem to be higher. This suggests we could approach the IMF scenario 2 in the next years with oil prices increasing by up to 200%. This would mean another recession and subsequent drop in oil prices as has happened already after the 2008 oil price shock.

For completeness:

(4) Natural gas liquids

Comparison_WEO_2010_Aleklett_NGLs

(5) Unconventional oil

Comparison_WEO_2010_Aleklett_Unconventional_Oil

All together now: crude oil and natural gas liquids

Comparison_WEO_2010_Aleklett

Conclusion: Previous ASPO warnings about a peak of oil production have materialized as confirmed by the IEA’s chief economist Fatih Birol in the Catalyst show “Oil crunch”. Therefore, get used to it: global crude oil production will decline. Global oil exports will go down even faster because oil demand in oil producing countries will increase. Business as usual with oil dependent infrastructure must be immediately stopped.

Previous related posts:

28/4/2011 IEA oil crunch warning: governments should have worked on it 10 years ago
http://www.crudeoilpeak.com/?p=3130

20/4/2011 IMF warns of oil scarcity and a 60% oil price increase within a year
http://www.crudeoilpeak.com/?p=3054

Australian 2011 budget allocation road/rail will not mitigate oil crunch

In general terms, the allocation in the Federal Budget 2011 for road and rail is NOT a portfolio of projects which will increase the economy’s productivity in the use of oil which is essential to offset declining local oil production and declining global oil exports.

Around 5 billion dollars are wasted on highway duplication projects. This is just a round figure without going into the details or merits of each individual project. Whenever reference is made in the project description that road safety on highways would be increased (but NOT blanket duplication) , expenditure is included under “Other roads” in the table below.

Albury_Rail_Line Believe it or not: this is the MAIN rail line between Sydney and Melbourne north of Albury. Single tracked, not electrified. How will Australia survive the evolving oil crisis in the next 10 years? Why are rail projects not getting priority? (to the left is the duplicated Hume highway)

Albury_rail_Hiume_highway Duplicated Hume highway along single tracked rail line Sydney – Melbourne (centre)

All data are from the Transport Minister’s website

http://www.minister.infrastructure.gov.au/aa/releases/2011/May/index.htm

Budget_2011_Road_Rail_Table

The national ratio of highway to rail spending is 1.7, varying from 5.3 in Victoria, 2.4 in NSW to 0.7 in South Australia. The total ratio of road to rail spending is 2.4. These ratios indicate that this is NOT a portfolio of projects which will increase the economy’s productivity in the use of oil which is essential to offset declining local oil production and declining global oil exports.

It is unknown why this ratio of expenditure is biased towards highways, but possible reasons could include:

Lack of understanding peak oil and its consequences for the transport sector
State and Federal bureaucracies not being able to design rail projects
Consultants and Construction industry not geared and/or equipped to do rail projects
MPs in all Parliaments not trained in doing energy efficiency calculations

wallpaper_xpl_640 Concluding note to all Federal MPs and Senators for their travel arrangements between Sydney and Canberra: if there is a big bang in the Middle East, there will be petrol, diesel and jet fuel shortages within weeks and you will have to squeeze into buses and/or 3 daily rail services with just 3 cars each. It will take years just to order additional rolling stock and get it delivered. And when the global crunch arrives, all rail car manufacturing capacities will be booked out for a long time.

HAPPY MOTORING AND GOOD LUCK FOR YOUR RAIL TRAVEL IN YEAR X.

Sydney now beyond point of no return

Only days after the ABC TV broadcasted an interview with IEA chief economist Fatih Birol who warned that peak oil happened in 2006 and that the world should have prepared for peak oil already 10 years ago, the freshly elected NSW government has appointed the former NSW Premier Nick Greiner (1988-1992) as chairman of Infrastructure NSW. He proudly wants to be known as “Father of Sydney’s tollways”.

This decision of Premier O’Farrell will guarantee that

(1) Sydney’s vulnerability to oil shocks is increased

(2) The government will never ever prepare for declining oil production until physical fuel shortages arrive at filling stations

(3) Millions of tax-payer funded planning dollars will be lost on preparing expensive documentation for oil dependent transport infrastructure

(4) Super Annuation funds will waste billions of dollars for unnecessary toll-ways until more of the toll-way operators go into receivership and it is realized that the root cause was peak oil

(5) The public is not being told that our car culture cannot continue forever, supported by a continuing stream of media reports about green cars, electric cars and yellow cars

(6) All this will go on until the system crashes and those responsible for the resulting financial losses will be held to account

Sydney has now definitely passed the point of no return, the last moment in planning and implementation to put in place emergency projects to save the functionality of the city (long distance commuting) by replacing car traffic with public transport. A symbol of this critical juncture is this work on the M2:

M2_Foundation_work_Beecroft_Rd_bridge_7_May_2011

Foundation work for the Beecroft Rd bridge (7/5/2011) now permanently blocks any future public transport solution which connects to the rail hub in Epping (to the right in the picture at the end of the bus ramp which will be pulled down, a scandal of the 1^st order). The new Liberal Government failed to re-negotiate the Transurban contract to use the 3^rd lane for public transport.

8/5/2011 Professor Hensher [ITLS] wants a network of dedicated bus lanes, known as bus rapid transit (BRT). ”I recently calculated that if we were not to build the north-west and south-west railways, we could purchase 28,500 new buses, increasing bus service capacity 7.5 times.”

http://www.smh.com.au/nsw/the-transport-mess-to-be-unscrambled-20110507-1ed6z.html

In that case the ITLS should immediately contact the Premier and Transurban to recommend a stop work order for the above works.

Beecroft_Road_Bridge_Transurban_Feb_2011

http://www.hillsm2upgrade.com.au/files/Beecroft%20Road%20Bridge%20QA.pdf

At a recent public information evening in Epping Heights Public School on the progress of construction work Leighton engineers and Transurban staff had never heard of peak oil, not to mention they did not know we are already in year #7 of peak oil.

On the same day the above M2 picture was taken fuel tanks in Misurata, attacked by Gaddafi forces, went up in flames, part of the fight over oil.

08libya-articleLarge

Fuel tanks burning in Misurata, Libya

http://www.nytimes.com/2011/05/08/world/middleeast/08libya.html?_r=1&hp

So these two pictures are symbols of two seemingly different worlds, connected by a fragile line of just-in-time oil tankers.

No one in government seems to have noticed that the war in Libya signals the beginning of the next phase of peak oil in which armed conflicts about the 2^nd half of oil will dominate oil markets and limit oil supplies. These wars converge in complicated, not easily recognisable ways with the Arab uprising.

This website will deliberately contrast M2 widening work with peak oil related events in MENA countries to demonstrate that our decision makers are unable or unwilling to connect the dots.

Greiner himself was of course the initiator of the M2 in the late 80s. Although peak oil was not publicly known at the time the M2 created uncontrollable urban sprawl in the North West of Sydney in the last 15 years and a city structure wholly dependent on long distance commuting by car. This will have far-reaching consequences and costs for decades to come. In addition to these problems many environmental sins were committed including destruction of bushland for the M2 and a dramatic increase of air pollution and smog over the Sydney basin. All these impacts are perpetuated with the M2 widening. It seems only peak oil can stop this.

Let’s put events into a table:

Table_M2_History

Specific IEA warnings ignored during planning process of M2 widening

It was the duty of care of governments to have checked these warnings, as late as June 2010.

WEO 2008 “Current trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially – they can and must be altered” http://www.iea.org/weo/2008.asp

WEO 2009 “The time has come to make the hard choices needed to combat climate change and enhance global energy security”

http://www.iea.org/press/pressdetail.asp?PRESS_REL_ID=294

IEA_Fatih_Birol_June_2010

http://www.iiea.com/events/iea-2010–world-energy-outlook

WEO 2010 “We need to use energy more efficiently and we need to wean ourselves off fossil fuels by adopting technologies that leave a much smaller carbon footprint” http://www.iea.org/weo/docs/weo2010/press_release.pdf

List of failures of duty of care

Apparently the RTA bureaucracy and the new government

(1) Do not realize that for the current car fleet using petrol and diesel the only determining factor during the life span of that fleet is oil supplies

(2) Cannot or do not want to study oil statistics, including assessing the root causes of the 2008 oil shock and the underlying accumulated debt crisis

(3) Do not watch TV and see that Arab unrest permanently impacts on oil supplies from MENA countries

(4) Fail to understand that we have entered a period of armed conflicts about what ever oil remains in the Middle East

(5) Do not care that Sydney’s oil vulnerability is increased

(6) Do not read IMF reports warning that steep rises of oil prices are ahead which are needed to bring rising world demand for oil down to stagnating or even declining oil supplies

(7) Ignore advice from Saudi Arabia that their oil exports will decline over the coming decade

(8) Cannot make primary energy calculations which would reveal that there is nothing which can replace oil in a carbon constrained future in quantities allowing business-as-usual

(9) Live on the untested assumption that the car fleet can be transitioned to electric cars (or any other “green” cars) at the speed required to offset oil decline resulting from oil-geology and above ground factors

(10) Allow their own love affair with the car to stop them from critically reviewing the above

(11) Cannot develop bar charts which would relate oil decline to the lead times for oil-proofing Sydney (electric public transport)

Ultimately all decision makers will have to go through the painful process to correct their own failings. Circumstances will dictate whether this will be fast (quick deterioration of events in Middle East) or agonisingly slow.

The new world of Public Greiner Partnerships

We read:

2/5/2011 Greiner outlines vision for NSW

Mr Greiner declined to nominate the first projects Infrastructure NSW will back but said it’s clear the government will have to get more private sector money, and go further into debt to fund projects like the M4 East and M5 duplication.

http://news.smh.com.au/breaking-news-national/greiner-outlines-vision-for-nsw-20110502-1e3ku.html

“In NSW, under the previous government, we went to a spectrum where the private sector took 100 per cent of the risk (for projects such as the Cross City Tunnel).

“The availability model is probably at the other end. “I think there are various places in between, and it might vary from project to project.”

http://au.news.yahoo.com/latest/a/-/latest/9291867/greiner-outlines-his-infrastructure-vision/

So this means that the taxpayer is supposed to provide the risk money for tollways.

Welcome to the new world of PGPs = Public Greiner Partnerships.

Conclusion: Even before Greiner’s appointment car-pooling was pre-programmed. Much more so now. Sydney has to wait for physical oil shortages and/or very high pump prices which would prompt the public to demand a fundamental change in policy towards public transport.

19/6/2010 M2 widening: Primary Energy Dilemma for cars
http://www.crudeoilpeak.com/?p=1631

4/4/2011 Sydney’s RTA builds M2 exit lanes for $200 oil
http://www.crudeoilpeak.com/?p=2872

11/2/2011 Money in Transurban’s cash box not enough to complete M2 widening
http://www.crudeoilpeak.com/?p=2578

Libya oil field battle lines

This is a classical example of a negative feed back loop of peak oil. Armed conflicts about the 2nd half of oil reduce oil production more than oil-geology.

In its April 2011 oil market report the IEA assessed the battle lines between Gadaffi and opposition forces on this map:

Libya_oil_field_pipeline_map_10_April_2011

Attacks by Colonel Gaddafi’s forces on oil producing fields and infrastructure in the rebel‐held eastern region

in early April has raised the spectre that the country’s oil production will be offline indefinitely while the civil

war rages on.

These are excerpts:

“Attacks by Colonel Gaddafi’s forces on oil producing fields and infrastructure in the rebel‐held eastern region in early April has raised the spectre that the country’s oil production will be offline indefinitely while the civil war rages on….

Libya’s output plummeted by an average 935 kb/d to only 450 kb/d in March, but production is now thought to be completely shut‐in following three separate attacks by government forces on rebel‐controlled oilfields in the eastern region of the country. Previously, only Libya’s ports and storage tanks in the oil towns of Es Sider and Ras Lanuf had been damaged during the two‐month long conflict. A spokesman for the Gaddafi regime refuted the claims, saying the damage had been inflicted by NATO forces. The opposition group meanwhile said the strikes targeted production in a bid to halt further exports from the eastern region.

The attacks targeted oil infrastructure at the country’s largest field, Sarir, in the Sirte Basin, as well as oilfields in the Waha and Messla areas. The three fields were producing around 100 kb/d, down sharply from the 420 kb/d seen before hostilities erupted in late‐February….

The attacks were likely in retaliation for the opposition’s first export of crude to international markets. The rebel‐led Transitional National Council appeared to have navigated around the three different sets of sanctions imposed by the UN, EU and the US. It was hoped that crude exports would provide a steady flow of funding for the rebels. The vessel Equator left Tobruk on 6 April carrying around 1.0 mb of Sarir/Messla crude and was believed to be destined for China, though it is still unclear who the buyer was….

The complete production shut‐in has temporarily stalled hopes of further exports from rebel‐held territories until security can be improved to encompass a much broader area. Damage to storage and other terminal infrastructure can usually be repaired in short order but restarting more complex and aging oil fields and related infrastructure could take many months, depending on the extent of the damage. Agoco, which early on in the conflict formally split off from the overnment‐controlled parent company in Tripoli, said it planned to move forces to the desert region to protect the fields, but it is a vast area to cover with limited resources, and has sparked fears that the Gaddafi regime will employ a scorched‐earth strategy similar to the one Saddam Hussein implemented on his retreat from Kuwait.”

http://omrpublic.iea.org/omrarchive/12apr11full.pdf

The BBC reports (excerpts):

Tripoli witness: rioting, fighting and dying for fuel

28/4/2011

Tales of tension and gang-fights are common in Tripoli’s long queues for fuel. One resident in the Libyan capital – who does not want his name to be used for security reasons – explains.

State television announced that as of today – Thursday – we may only have fuel for the amount of 5 dinars ($4), no more, no less.

It has instructed stations to stamp car registration papers with the date of purchase because we can now only refuel every three days or more.

The only official explanation for the shortage has been that, while there is a surplus of petrol, some people are panic buying and others want everyone else to think there is a fuel shortage and are creating long queues to trigger chaos.

My friend successfully re-fuelled his car on Tuesday after three long days and nights in a queue at the petrol station in his area. Resilience and planning are key. He and his brother queued in shifts – they would alternate every three hours during the day and every five hours at night.

“One night a massive fight broke out. People took out knives and others phoned their relatives telling them to come help with the fight. It quickly spiralled out of control. At least three people were stabbed and we heard that one of them later died from his wounds. There have been similar incidents at many other stations.”

“On one day some cars tried to create a second queue. The brigade forces threatened them, shot into the air and shouted. Some left and others stayed.

“Twenty minutes later several cars arrived filled with civilians resembling criminals. They had chains and metal bars and immediately attacked the cars that had refused to leave

“They smashed the windshields, mirrors and hoods and then got into their cars and disappeared as quickly as they appeared. The security forces just watched.”

On Tuesday morning at a petrol station in Abu Nawas on Gergaresh road, “there was a drive-by shooting targeting the queue. Two people were killed. The cars were white Chevrolets”, another friend tells me.

Tripoli_filling_station

On Saturday night a friend witnessed a shooting on Sidi Masri road.

“A fuel tanker, parked on the side of the road, was illegally filling a few cars with petrol. There were a few brigade men securing the perimeter as this took place.

“A car carrying two men pulled over close by, on the opposite side. One man got out, crossed over and started video-recording with his phone. The security forces saw him and called out: “You! What are you doing?”

“He started running away and they shot him. We saw him fall. Immediately the car he came in drove off. There was a taxi near them – the driver was probably working for internal security because they told him to follow the car and he sped off in pursuit. The man who was shot was picked up and thrown into the brigade force truck. They drove off with him.”

http://www.bbc.co.uk/news/world-africa-13222425

A glimpse into the future of Mad Max?

Previous posts on Libya:

12/4/2011 Libyans fight over oil field at depletion mid point while African crude oil exports decline
http://www.crudeoilpeak.com/?p=2947

24/3/2011 Libya: yet another (peak) oil war
http://www.crudeoilpeak.com/?p=2759

24/2/2011 Libya exports 7% of crude from Mediterranean and Middle East
http://www.crudeoilpeak.com/?p=2633

23/2/2011 Quick primer on Libyan oil
http://www.crudeoilpeak.com/?p=2621

EIA terminates updates to International Energy Statistics

In a press release dated 28/4/2011 the Energy Information Administration of the US Department of Energy announced they will terminate updates to International Energy Statistics due to FY 2011 budget cuts. This follows the discontinuation in January of the International Petroleum Monthly.

Houston_we_have_a_problem_bubbles

This web site has relied on these EIA data.

Those who like conspiracy theories might now speculate that this is the latest attempt to cover up peak oil. We note that in 2010 EIA data for Saudi Arabia started to take off from the rest of the pack (IEA, OPEC and JODI).

Saudi_crude_production_2010_by_data_source In April, just 2 weeks before this notice of termination, EIA’s data for Saudi crude production went completely off-charts compared to other data providers, when 2010 figures were revised upwards by up to 700 Kb/d. While EIA’s revisions were quite common, often many months and even years back, the magnitude of this revision was unusually high. Whether the budget cuts are related to this revision is unknown.

And this is the original text of the press release:

Consumption, Efficiency, and International Energy Information

Suspend work on EIA’s 2011 Commercial Buildings Energy Consumption Survey (CBECS), the Nation’s only source of statistical data for energy consumption and related characteristics of commercial buildings.
Terminate updates to EIA’s International Energy Statistics.

Many other data services are cut:

Energy Analysis Capacity

Halt preparation of the 2012 edition of EIA’s International Energy Outlook.

Suspend further upgrades to the National Energy Modeling System (NEMS). NEMS is the

country’s preeminent tool for developing projections of U.S. energy production, consumption,

prices, and technologies and its results are widely used by policymakers, industry, and others

in making energy-related decisions. A multiyear project to replace aging NEMS components will

be halted.

Eliminate annual published inventory of Emissions of Greenhouse Gases in the United States.

Limit responses to requests from policymakers for special analyses.

Energy Analysis Capacity

Halt preparation of the 2012 edition of EIA’s International Energy Outlook.
Suspend further upgrades to the National Energy Modeling System (NEMS). NEMS is the country’s preeminent tool for developing projections of U.S. energy production, consumption, prices, and technologies and its results are widely used by policymakers, industry, and others in making energy-related decisions. A multi-year project to replace aging NEMS components will be halted.
Eliminate annual published inventory of Emissions of Greenhouse Gases in the United States.
Limit responses to requests from policymakers for special analyses.

http://gregor.us/wp-content/uploads/2011/04/Full-EIA-Press-Release.pdf

This means that this website can no longer provide updates to the monthly crude oil graphs using EIA data. The astute reader of this post is advised to save the latest set of files (up to December 2010) as a historic document.

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ASPO: 2020 crude oil production down by around 8 mb/d

Australian 2011 budget allocation road/rail will not mitigate oil crunch

Sydney now beyond point of no return

Libya oil field battle lines

EIA terminates updates to International Energy Statistics

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