What’s happened to Peak Oil since Peak Oil….

2 10 2018

The latest news that Mexico has this month switched from being a net oil exporter to a net oil importer prompted me to do some more research on what stage we all are with Peak Oil…….  and as expected, the news are not good. Since the peak of conventional oil in 2005, ALL the major producing nations except for Iraq and the US have been producing less and less in real terms, and let’s face it, half the US’ production is unviable shale oil which since the GFC has lost the oil industry $280 billion and counting…..

Meanwhile, pundits on TV are expressing disbelief at how the price of fuel is skyrocketing in Australia (with our dollar struggling to remain above $US0.70) while oil is simultaneously surging under all sorts of pressures.

Crude_prod_changes_2005-May_2018Fig 2: Crude production changes between 2005 and 2018 by country

Group A
Countries where average oil production Jan-May 2018 was lower than the average in 2005. At the bottom is Mexico with the highest rate of decline. This group started to peak in 1997, entering a long bumpy production plateau at around 25 mb/d, ending – you guessed it – in 2005. This is down now to 16 mb/d, a decline of 700 kb/d pa (-2.8% pa).

Decline-group_1994-May2018Fig 3: Group A countries

Group B

Countries where average oil production Jan-May 2018 was higher than the average in 2005. At the top of the stack are Iraq and the US, where growth was highest. Group B compensated for the decline in group A and provided for growth above the red dashed line in Fig 1.
The 2018 data have not been seasonally adjusted.
In group B we have a subgroup of countries which peaked after 2005

Crude_post-2005-peaking_1994-May2018Fig 4: Countries peaking after 2005

A production plateau above 7 mb/d lasted for 6 years between 2010 and 2016. The average was 7.1 mb/d, around +1.8 mb/d higher than in 2005. Another country in this subgroup is China, here shown separately because of its importance and consequences.

Cumulative_crude_prod_changes_2005-May_2018Fig 13: Cumulative crude production changes since 2005

This is a cumulative curve of Fig 2 with changes in ascending order (from negative to positive). On the left, declining production from group A adds up to -9 mb/d (column at Ecuador). Then moving to the right, countries with growing production reduce the cumulative (still negative) until the system is in balance (column at Canada). Only Iraq and the US provide for growth.

According to Crude Oil Peak, where all the above charts came from, the only viable conclusion is…..:

Assuming that the balancing act between declining and growing countries continues (from Mexico through to Canada) the whole system will peak when the US shale oil peaks (in the Permian) as a result of geology or other factors and/or lack of finance in the next credit crunch and when Iraq peaks due to social unrest or other military confrontation in the oil producing Basra region. There are added risks from continuing disruptions in Nigeria and Libya, steeper declines in Venezuela and the impact of sanctions on Iran.

Assuming that the balancing act between declining and growing countries continues (from Mexico through to Canada) the whole system will peak when the US shale oil peaks (in the Permian) as a result of geology or other factors and/or lack of finance in the next credit crunch and when Iraq peaks due to social unrest or other military confrontation in the oil producing Basra region. There are added risks from continuing disruptions in Nigeria and Libya, steeper declines in Venezuela and the impact of sanctions on Iran.

To top it off, here’s a video clip of this guy I’ve never heard of before but which, whilst not peak oil specific, seems on the money to me…….

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