101 thoughts to “Open Thread Petroleum,December 8, 2019”

    1. About your chart. We don’t count NGL’s, propane and butane. They are gasses, not oil. Also, under the “non-peak” scenario, the area “new fields” is grossly exaggerated.

      Note: World C+C will be down about one million barrels per day, 2019 vs. 2018.

      1. Ron, I think we are now so close to or even at peak, that any prediction of the future development is senseless. Any economical crisis, natural desaster or unrest (or the lack of all that) can advance or delay the final peak. So my best guess is that we entered the final undulating plateau. Your guess of a probability of 70% that 2018 was the peak is quite possible. Though I prefer the fifty-fifty chance of flipping a coin.

        1. Downslope from peak is also uncertain. Classic peak assumes reliable resource projections and economic extraction. OPEC reserve estimates aren’t reliable and we *know* US LTO extraction has not been driven by economics. If Gulf OPEC reserves are smaller than stated and plateau has been maintained only by aggressive practices, well, see Mexico and Daqing.

            1. My completely uneducated guess is “yes”. You want to sell an asset before it is known that perhaps it is less than is expected.
              They wouldn’t do an IPO if they had just discovered another Ghawar…..
              The fact that they are comfortable taking a (large) discount on the valuation by not having to stock listed in jurisdictions where you need much more disclosure tells you something. Why would you hide positive information?

    2. The chart supplied by Tony projects something like 30-40% drop in Conventional Crude (from existing fields) from 2018 to 2025.
      If this is anywhere close to what happens, it is very hard to imagine that oil prices won’t ‘enjoy’ a massive spike. If so, money will flood to the tight oil production sector (and other energy sectors).
      Still mystified about the huge ‘New Field’ projections!

  2. Has anybody here charted the history of oil production versus world population, past, present, and future estimated?

    1. If you can get the historical data I will do it. I can only go back to 1975 for crude oil + lease condensate production.
      So this isn’t nowhere near what you are looking for but it looks like this from 1975-2018, based on EIA data for world crude +lease condensate production and world population according to the world bank.

      2. Also of interest is Oil (tonnes) per unit of real GDP (in trillions of 2005$).
        Today we use about half as much oil per unit of GDP as in 1979.

        1. Denis, two dire observations regarding your graphs:
          There seems to be no possible gutting of oil, let alone fossil fuels, without slashing the economy. And efficiency gains seem to be petering out: While in the last 35 years oil’s contribution to GDP was reduced by half, extrapolating this graph it never seems to dip below, say, 50 tons of oil per unit of GDP.

        2. Lets keep a reality check in mind on energy vs GDP.
          GDP is not a very useful measure of ‘real’ economy.

          By ‘real’ I mean- the production of food, metal, concrete. manufactured goods, construction projects, infrastructure, etc.

          ‘Unreal’ or ethereal (intangible, dainty, flimsy, insubstantial) aspects of GDP include financial products and transactions, discretionary services (ex- haircut, advertising), sports and other entertainment, political campaign spending, etc.
          These are optional activities that are very poorly related to energy use or the overall well-being of a population, or the carrying capacity of a country or world.

          Unfortunately, we do not have a widely used measure of ‘real’ economy to base these analyses on (as far as I know).

          1. Hickory,

            As to what is “important”, is up to individual consumers.

            GDP as a measure is imperfect, can you suggest a better alternative that we actually have data for for the World.

            1. No, I don’t have a good alternative to GDP that would be a useful indicator of ‘real’ economy for the purposes of these kind of energy analyses and planning. It would be a great project for an economist to come up with, if there isn’t one existing already.

              And certainly ‘importance’ of economic activities varies by personal choice. But, for example, whether a company spends $1 million on advertising, or $50 million, is irrelevant to energy use. It highly skews the GDP vs energy analysis however.

              In 2018 in the USA Financial sector contribution to GDP was greater than Manufacturing, Construction, Wholesale Trade, and Transportation and Warehousing sectors combined.

              So it the economy has an improving GDP/oil consumption indicator, is it being more energy efficient, or is it just doing more financial paperwork rather than growing potatoes or building transmission towers? I’d say we don’t know, because the GDP is a failed indicator of such factors.

            2. Hickory,

              I agree the measure is imperfect. Finance can be useful as without it a modern economy will cease to function. Advertising can play an informational role, and lead to demand for new and improved products.

            3. Right, but you don’t need too much of either of these activities. And the GDP generated by these sectors is poorly indicative of a cultures staying power, its ability to adapt, or to sustain its population. Or its ability to get by with less energy.

            4. I’m with Dennis on this. Advertising is education vital for a free market to maximize production and make best decision regarding maximizing of utility of products.

              On the other hand with communism we could have the government decide productions and allocation.

              Free markets leave the consumer to make the choice of importance and advertising is part of that education.

            5. I think this discussion has drifted far, far off point. Almost funny. Soon it will transition to side effects of cholesterol medications.

            6. And in a free market it’s your choice how much of your cholesterol medications is important for you to spend your money on. Not some poster on an oil blog saying what’s important to you.

              Now we are talking about cholesterol medications. GDP isn’t perfect, but it includes the importance of our choices.

              🙂

            7. Dennis and Hickory,

              There is an economist, Tim Morgan, who is working on a model called Surplus Energy Economics, which attempts to do provide a better model for real world output, by removing debt-driven GDP and accounting for increasing energy cost of energy.

              Worth checking out: https://surplusenergyeconomics.wordpress.com

            8. Yes Niko. I found this guys writings compelling.

              Dennis- I don’t think of debt in an all-or-none context. I agree that debt financing is extremely useful. Where we may part paths is on the extent. Maybe like sugar. Too much is bad.
              I think debt should be a limited tool, rather than being used to maximize growth. Maximizing growth might feel good while its happening, but in a world without limitless resources, it just takes you faster to the brick wall.

            9. Like sugar to the human body, miss managed debt will be death to an economy. CNBC just had a hour long interview with Jeffery Gundlach. He talks a lot about debt and the coming election. He predicted Trumps win. He doesn’t think the dems currently have a winner and HRC would be their best opportunity. Some of it is already available online. Worthy of watching.

            10. Hickory,

              I tend to agree, it is up to individuals how much they consume, it is a bit of a conflict, I would rather that people freely choose what they consume and how much of it. As we reach limits, prices will tend to rise and may limit consumption of the scarce resources. In addition greater wealth tends to lead to better education and falling family sizes, that is likely the most important factor which might lead to reduced environmental degradation.

              I also agree their can be too much debt, as well as too little.

          2. Hickory,

            I totally agree with GDP being imperfect. For example, as a nation we can construct buildings, knock them down and rebuild, repeat ad nauseam. This will all count towards GDP. Such activity is rampant in China. Not to mention the lack of audit in their GDP figures.
            Or you can increase immigration to increase consumerism. As you can already see, the need for people to consume more and more because politicians can show better GDP figures is a symptom of a sick economic, political and social system.
            We might be able to use total energy usage per capita to see if that calculation makes any difference to GDP. Though that isn’t perfect either, but we do have the data for that i think.

        3. Dennis – this is a fascinating chart, and I’d like to add an observation.

          It was right around 1980 when financialization really took off.

          The way GDP is measured, a borrowed dollar spent and an earned or saved dollar spent are identical.

          Example: You and I each are an economy with a measured GDP. Each of us in year 1 is earning and spending $100k. Each of our GDP’s = $100k. In year 2 you decide to take on a loan for $100k and spend that too. I just hang back and do my boring thing of spending and earning $100k.

          When our year 2 GDP snapshots are taken, I logged a pathetic 0% rate of growth, but you logged a massive 100% increase in GDP! Wow! Good for you!

          But…not really. That was just future consumption taken today.

          A better GDP measure would be debt-adjusted to factor out the debt boosts.

          Bottom line is that “oil to GDP” is murked up with the heavy debt-binging of the past 50 years.

          Here’s the chart that tells the tale:

          1. Without a doubt if we eliminate credit the economy would be much smaller. I agree the financial should be well regulated. That helps to prevent financial crises.

            I think people should be free to lend and borrow within a specific regulatory framework.

            I also think the effect over the long term of a proper regulated financial system is more efficient allocation of capital.

            On balance a net positive. Imo.

            1. “On balance a net positive. Imo.”

              I’m not willing to be that broad in my assessment of the use of credit.

              I am a huge fan of credit that is used to expand production or has clear cash flow positive attributes for the future.

              Purely consumptive debt is just dumb. Examples include; (1) government debt that funds warfare (2) 90+% of all auto loans (3) 99.44% of all gender studies degrees

              The question then becomes, how much debt taken on has been “non self-liquidating” (as it’s called, or consumptive debt) and how much has been “self-liquidating?”

              The answer is that far too much has been stupid debt. The next question is who is going to eat those losses?

            2. Chris,

              As neither you nor I rule the World, their will be smart and dumb debt. In a free society that should be up to borrowers and lenders to decide within the regulatory framework.

              Main stream economics is far from perfect, but generally I think they have it right that a properly regulated free market economy leads to a relatively efficient allocation of resources compared to any other social system devised to date.

              Can you point to a viable alternative in a democratic society somewhere in the World?

              In short we do not live in a perfect World, and I am doubtful we ever will.

          2. “Bottom line is that “oil to GDP” is murked up with the heavy debt-binging of the past 50 years.”

            Yes, and ‘murked up’ with all sorts of other irrelevant factors.

            When taking this into account, we are still left with the clear and strong conclusion that economic and population growth are heavily dependent on energy supply growth.
            Energy growth has been from oil, and several other sources over the past century. Near peak now. Population peak and ‘real’ economic peak won’t be lagging too far behind, despite [critically needed] innovations.

          3. >But…not really. That was just future consumption taken today.

            You look at things from the borrower’s point of view, but not the lender’s. Say I lend you money. If I have money to lend it is because I have saved it — or my dad did. Saving means not consuming something with money available for consumption. So when you borrow money from me, you are borrowing my past consumption, as much as your future consumption. The money I didn’t spend yesterday is the money I can profitably lend (or directly invest) today.

            For the individual borrowing looks like borrowing from the future, but lending looks like lending the past. From an overall viewpoint, the transaction just the present.

            People often decry capitalism as a “consumer” society, but capital is money NOT spent in the past on consumer goods. What differentiates , modern “consumerist” societies from hunter gatherers is the vast savings, aka capital, we accumulate. We accumulate it by spending less than we produce.

            1. This is not at all how lending works in our economy. When a bank creates a loan, they create that money, out if thin air, at the time the loan is granted.

              That is the “debt” we are talking about.

            2. Niko,

              Banks have reserve requirements and are the lenders.

              I am quite familiar with how lending works. Do you think it would be better if their was no lending?

              How does a 25% unemployment rate like 1933, their was not a lot of borrowing or lending then. 😉

              As long as there is not any interplanetary lending. The net balance of borrowing and lending at the World level is zero.

              As Krugman often says, it is money we owe to ourselves.

              Debt is not the boogie man, up to 300% of World GDP is likely to be ok for total credit to nonfinancial sector for public and private debt combined.

            3. “In today’s modern economy most money takes the form of deposits, but rather than being created by a group of savers entrusting the bank withholding their money, deposits are actually created when banks extend credit (i.e., create new loans). As Joseph Schumpeter once wrote, “It is much more realistic to say that the banks ‘create credit,’ that is, that they create deposits in their act of lending than to say that they lend the deposits that have been entrusted to them.”

              When a bank makes a loan, there are two corresponding entries that are made on its balance sheet, one on the assets side and one on the liabilities side. The loan counts as an asset to the bank and it is simultaneously offset by a newly created deposit, which is a liability of the bank to the depositor holder. Contrary to the story described above, loans actually create deposits.

              Now, this may seem a bit shocking since, if loans create deposits, private banks are creators of money. But you might be asking, “Isn’t the creation of money the central banks’ sole right and responsibility?” Well, if you believe that the reserve requirement is a binding constraint on banks’ ability to lend then yes, in a certain way banks cannot create money without the central bank either relaxing the reserve requirement or increasing the number of reserves in the banking system.

              The truth, however, is that the reserve requirement does not act as a binding constraint on banks’ ability to lend and consequently their ability to create money. The reality is that banks first extend loans and then look for the required reserves later. Perhaps a few statements from some notable sources will help to convince you of that fact.”

              Source: https://www.investopedia.com/articles/investing/022416/why-banks-dont-need-your-money-make-loans.asp

              As to your other points, I never said lending was evil – I was simply correcting alimbiquated, who is under the illusion that banks act as intermediaries of funds, which is not the case.

            4. Niko,

              Yes that is correct. There do need to be some reserves as the system is currently run, but it is not the simple story of one person’s savings are lent to a borrower.

              My point was simply that the “creation of loans” out of thin air is also an oversimplification. That implies the money multiplier would be infinite, that is not the case. Their are limits to how much a bank can lend, and it mostly depends on their reserves (or the amount they can “find”). For the system as a whole in a situation where all banks have issued the maximum dollar amount of loans they are allowed, any further lending would require someone to deposit money in a bank (to increase the reserves in the system).

          4. Chris,

            I posted this in reply to Dennis, but it fits so perfectly what you are talking about I thought I would share with you as well. Good chance you are already aware, but there is an economist, Tim Morgan, who is working on an economic model called Surplus Energy Economics, which attempts to do provide a better model for real world output, by removing debt-driven GDP and accounting for increasing energy cost of energy.

            Here’s a post of his explaining what he is doing: https://surplusenergyeconomics.wordpress.com/professional-area/

            1. Thanks. But Tim Morgan left a very bad taste in my mouth some years ago.

              He watched the Crash Course which I produced, we emailed back and forth for a while, and then he produced an extended pamphlet/book that literally was the Crash Course in its design, but without any attribution. He lifted images, ideas, etc.

              Okay, imitation is sincere flattery and all that. I let it go and didn’t make much of a fuss.

              A few years later a book of his was coming out, I think it actually came out, and I was contacted by Dave Murphy (then a recent graduate of Charlie Hall) who was all in a bother about his own work having been lifted by Mr. Morgan and used without any attribution at all. My work too, as well as others.

              Dave led an effort to force a recall by the publisher, it was that serious of a breach.

              I’ve not spent any time following or promoting Mr Morgan ever since.

              It’s not to say his ideas are bad, but I really cannot abide his loose methods.

            3. Chris, just be glad Tim’s nonsense isn’t tied to your name. Money isn’t anymore of a claim to future energy than a future cup of coffee. Money is not a physical asset and is only worth it’s value at the time of an exchange. If you want a claim on energy. Buy a solar panel or stripper well.

              I will give you the Tverberg award of fear and exaggeration promoting the fossil fuel industry.

      3. Mike, you shortly posted the same graph with a longer timeframe and then deleted it again, probably because you doubted of the sense of that post (I would agree to disagree ;-)), while I already was commenting it:

        “Mike, replace Oil with fossil fuels and the two lines on your graph will probably be exactly on par.”

    2. OFM,

      I did this chart back in 2008. The correlation between C&C oil and population from 1930 to 2007 was a high 0.96. Using my oil reserve assumptions in 2008, I forecast that world population would peak at 7.5 billion in 2025. Instead, population is now 7.75 billion.
      https://www.worldometers.info/world-population/

      The theory is that energy production including oil has enabled world population to grow by almost 6 billion since 1930. I assume that if energy production growth slows down then so will world population growth.

      Many countries are already in population decline. Some larger countries in decline include Japan, Italy, Ukraine, Poland and Romania. Syria and Venezuela have also had declines but this is due emigration. Russia is only slightly increasing, as is Spain.
      https://en.wikipedia.org/wiki/Population_decline

      1. The most important factor for future energy.demand is the fact that development Countries are getting industrialized, billions off pepole could for the first time in life buy a car even used. As a result of automatation in the industry cars , engines are getting cheaper. All needs gazolin, diesel. Than in the other end in developed Countries pepole change the way they live, like they dont wont to use time for cutting gras, take away snow they use machines powered by energy. I still believe the population in Asia, Africa where most pepole lives is increasing, they need energy also more pepole on the globe beed food, clothes, houses that add a higher energy demand. How much will be covered by fosil fuel compared to renewable energy will depend on price, who controlling the interest in coal plants . Many pepole eighter want to chage their ways of living as they trust what they have. If it is possible it will be very difficult to get a decrease in oil demand as long as oil price are low and there is enough oil.

        1. It’s true that developing countries will increase demand for finished goods and services, but it is a mistake to assume they will follow the exact same development path as their predecessors.

          For example, when I was taking classes in development policy (my minor at the University of Bonn) back in the 80s, it was considered certain that Africa would never gt a modern telephone system. Why? The continent is just too big, there isn’t enough copper around to lay all those land lines.

          A few decades later there are nearly 900m mobile phones in Africa, as many as in the EU and the United States put together.

      2. I completely agree with the big point of your chart Tony-
        “The theory is that energy production including oil has enabled world population to grow by almost 6 billion since 1930. I assume that if energy production growth slows down then so will world population growth. ”
        Population will roughly track energy available (supply and efficiency of use).
        And as pointed out by many in different ways (Baggen and Ron, for example, on just this post), attempts to maintain energy availability after coal/nat gas/crude oil combined peak, will be a rearguard action. A desperate one perhaps.

        [this reality should not prevent an all out attempt to innovate and adapt, in my opinion. In fact just the opposite. Without going ‘gangbusters, all out, gung ho, war footing, we are collectively on the fast path to a rapid shrivel in this coming century]

  4. To OFM:
    I managed to get the data, after along arduous search on the web. The further back we go the higher the error margin.
    Source:
    World population growth: https://www.worldometers.info/world-population/world-population-by-year/
    World crude production: https://www.tsp-data-portal.org/Energy-Production-Statistics#tspQvChart (great site)

    I can plot projections, based on whatever you or others think the population growth rate and or crude production growth rate will be. A more interesting correlation and chart would be the world population growth rate vs world crude consumption rate. I might do that when i get time.

      1. That population spike, in the last 100 years was primarily enabled by oil. The population gain in the 200 years prior to that was enabled by coal. Notice I say enabled by and not caused by. The cause was human nature. All animals produce far more offspring than nature can possibly support. All species multiply to the very limit of their existence. That includes the human species.

        1. So, will the ongoing growth in population be enabled primarily by natural gas?

          1. I doubt it. Natural gas is part of what is enabling the population growth right now, as well as coal. When the energy from fossil fuel starts to decline, the population will start to decline, probably with some slight delay.

            Fossil fuels provide food and shelter. They also fuel industry which gives people their livelihood. The very idea that we can just keep the economy cruising right along when fossil fuels are gone is really preposterous.

            1. Ron,

              The economy and population might keep growing if fusion reactors can become large scale.

              https://www.dhakatribune.com/asia-pacific/2019/12/06/china-builds-artificial-sun-to-source-clean-energy
              China has recently developed a nuclear fusion reactor to generate clean energy, whose production capacity is as much as 10 times what the actual sun generates.
              The construction of the reactor finished recently, and it is set to start operating in 2020, according to Xinhua News.
              Although named HL-2M, the reactor is now being called China’s “artificial sun.” China National Nuclear Corporation, in collaboration with Southwestern Institute of Physics, built the reactor, which has been installed at Leshan in Sichuan province.
              When active to its full capacity, the reactor can reach 200 million degrees Celsius – 13 times hotter than the Sun’s maximum temperature, which is 15 million degrees Celsius.
              The reactor will generate energy through nuclear fusion, which forces atoms to fuse together, which generates high levels of heat. It is the same reaction that happens on the Sun as well.
              The HL-2M has a doughnut-shaped chamber which is called Experimental Advanced Superconducting Tokamak (EAST). The reactor will use hydrogen and deuterium gases as fuel to start the fusion reaction, and recreate what happens on the sun.
              HL-2M is a part of China’s participation in the International Thermonuclear Experimental Reactor (ITER) based in France. ITER is, as of now, the world’s largest nuclear fusion project amounting to a whopping 20 billion euros.
              Along with China, 34 countries have also participated in the project, which is expected to be complete by 2025.

              Also Tokamak fusion reactor in UK
              http://nuclearstreet.com/nuclear_power_industry_news/b/nuclear_power_news/archive/2019/11/27/uk_2700_s-frazer_2d00_nash-to-work-on-tokamak-reactor-112702#.Xe7MNXduIRA

            2. My brother, now retired, worked on the NIF project for years. He says fusion will never be more than a physicist’s toy.

              Even if fusion ever turns out to be more than a physicist’s toy, it probably won’t ever be a great source of energy. It is just another Rube Goldberg machine for boiling water, and boiling water in itself is the worst way to generate electricity. The economics just don’t make sense.

            3. Fusion will always be energy of the future. However, countries are spending billions of $ on fusion.

            4. Ron,

              The idea is that fossil fuels gradually provide less energy (smaller percentage of total) as other forms of energy gradually provide more. Much of this is simply a matter of cost, alternatives will provide more energy per dollar spent in the future as fossil fuels become scarce and expensive.

              Not sure anyone envisions a smooth easy transition, not me in any case. The transition to non-fossil fuel energy will be difficult, but not impossible imo.

            5. The transition to non-fossil fuel energy will be difficult, but not impossible imo.

              Dennis, of course, it is not impossible. It is inevitable. The question is, just how difficult will it be? What will be the cost to human welfare? What will be the cost to the human population? What will be the cost to the wild animal population as if we descend to eating the songbirds out of the trees?

              You are trying to answer the wrong question, Dennis. The question is not will happen, but what will be the cost of what will inevitably happen?

              I know, I know, you imagine non-fossil energy equal to fossil energy. I will not comment on that other than to say I find that scenario hilarious. I am astonished that anyone can believe it.

            6. I agree with your overall assessment Ron. What is often overlooked on these discussions of global oil and other energy sources, is the big variation in local repercussions.
              Some places will have plenty of oil for decades still, and others will run very short in this coming decade.
              Even here in the USA there is big regional variability. Indiana gets 73% of electricity from coal, whereas Idaho gets 76% from hydro and wind, for example.
              The tension between energy haves and have-nots will be a huge story of the next couple decades. How will China react to running short, for example?

              How does your state make electricity?-
              https://www.nytimes.com/interactive/2018/12/24/climate/how-electricity-generation-changed-in-your-state.html

            7. Ron

              I am astonished at your lack of imagination.

              Note that exergy is what is needed. For fossil fuels exergy is about 35% of energy content on average. For wind and solar more like 90% exergy to energy.

              In short I expect energy needs will be reduced due to the transition by nearly 60%.

              In addition population is likely to peak as TFR continues to fall. Probably around 2075. In the meantime the growth rate of World population will slow down.

            8. Dennis, I am not astonished by your ability to rationalize. It’s just human nature to do that. And… it only takes a vivid imagination to do that. (A vivid imagination is far more often a handicap rather than an asset.)

              The world has seven or eight times the long term population carrying capacity and about twice the short term carrying capacity. By short term, I mean 100 years or less. And we are over halfway through that short term. No, hell no, there is no way over 7 billion people can make it to 2075.

              I have posted, many times in the past, what we are doing to the world. And we are still doing it. It is getting worse, not better. But I will not bore you with those details again.

              rationalize VERB
              attempt to explain or justify (one’s own or another’s behavior or attitude) with logical, plausible reasons, even if these are not true or appropriate.

            9. Ron

              Not sure the carrying capacity is as well defined as you believe.

              Perhaps we never reach the population levels many predict.

              The future is not written.

              You are very sure about what the future will look like, I am far less certain. Perhaps 40 years ago you were certain of what the World would look like and all of your predictions were precisely correct.

              Clairvoyance has never been my strong suit. 😉

            10. Not sure the carrying capacity is as well defined as you believe.

              Oh crap, you have to be joking. The human carrying capacity is the population the earth can carry without destroying the earth. That is without drawing down the water tables, without destroying the rain forest and boreal forest, without driving virtually all the earth’s megafauna into extinction, without causing rivers to run dry, without causing inland lakes and seas to dry up, without causing the ocean edible fish population to disappear, without causing coral reef to die, without causing almost half the earth’s insect population to disappear, without poisoning the atmosphere with smog, without causing the earth’s topsoil to blow and wash away, without causing the earth’s atmosphere to heat up, without…. oh hell, you get the message.

              And these problems are getting worse Dennis, not better. And the sad part is these problems cannot get better because the human population must be fed, clothed, and sheltered. The human population must have a means of survival.

              Dennis, we are in competition with every other species of megafauna on earth for food and territory. And we are winning, winning big time. And we will keep on winning until they are all gone and every acre of arable land is turned into human habitat. It will continue because that is just what we do. It is just in our nature. Evolution has not molded us to be good stewards of the earth, evolution has molded us to fight for food and territory because that is, or was, what we had to do to survive.

              Dennis, yes, yes, hell yes, I know what the future looks like. It looks just like it looks right now except I know it will get worse, a lot worse.

            12. Baggen- “What about this guy?”
              He completely avoids going into the implications of the points he is making.
              Perhaps they [The Manhattan Institute for Policy Research is a conservative 501 non-profit American think tank] would fire him for saying that all the energy math just doesn’t add up for much longer.
              Its not a pro-growth narrative.

            13. Hickory,

              “Baggen- “What about this guy?”
              He completely avoids going into the implications of the points he is making.
              Perhaps they [The Manhattan Institute for Policy Research is a conservative 501 non-profit American think tank] would fire him for saying that all the energy math just doesn’t add up for much longer.
              Its not a pro-growth narrative.”

              Im sorry you lost me, can you try rephrase this one for me i just dont understand what you are trying to point out for me.

              I really dont care if he is politically biased in one way or another im more interested in is his calculations correct, and is his assumptions correct. Im sure some of his points can be picked at, but is it something to just dismiss, all of it, or is there a degree of harsh reality in this?

              Ok google translated this

              “He completely avoids going into the implications of the points he is making”

              But does he have to, isnt this more of a summary of what he sees as problems in a transition to wind/solar/battery society on global scale. Does he really need to offer a solution? Or if he is correct in pointing out it wont work, then isnt the implication on what will happen up to us to think about also?

            14. Ron
              Carrying capacity is defined well. I used a poor word choice.
              The population level the World can support is dependent in part on technology. Technological development is difficult to predict. Total Fertility Ratio for the World is currently 2.5 down from 5 in 1965. If it falls below 2.1 World population will fall. We cannot predict what th Future TFR will be in several East Asian nations TFR is under 1.7. If the world reaches that level pupulation falls pretty quickly to under 2 billion in 150 years.

              As population peaks and declines environmental damage is reduced. The sooner this point is reached the better.

            15. The population level the World can support is dependent in part on technology.

              No, no, no Dennis. That is the wrong way to look at it. Technology will determine how high the population will reach before it collapses. But technology, powered by fossil fuel, is what is driving the population to new highs. Technology to produce more food per acre, technology to catch more fish, technology to employ more people and technology to make us live longer. Technology is what is causing the population explosion.

              I understand where you are coming from with fertility rates. But you are talking about reaching 9 billion people perhaps by 2050 then declining back to 7 or 8 billion people in 100 to 150 years or so. Dennis, we were destroying the earth at 4 billion people. At almost 8 billion today the earth cannot possibly last another 50 years.

            16. Ron,

              Population could fall pretty fast as TFR falls, technology can have negative effects and positive effects, such as reducing TFR, carbon pollution, and pollution in general.

            17. Dennis, your chart is fertility rate, not population. China had a one-child policy rate for decades and their population kept rising. That was because of population momentum. Older people kept hanging around instead of dying.

              However, I have no doubt that the population will decline very fast. The death rate will skyrocket.

            18. Ron,

              Look at vertical axis label and tell me what it says.

              Japan’s population is falling.

              Yes there is population momentum, it becomes less important over time.

              Perhaps death rates will increase, but only if your vision of the future proves correct.

              Your vision is speculative, just like mine.

              We do not know the future, and I am doubtful you saw clearly 40 years ago what the future would look like.

              The population bomb certainly did not prove correct.

              https://en.m.wikipedia.org/wiki/The_Population_Bomb#Predictions

            19. Dennis, yes, yes, hell yes, I know what the future looks like. It looks just like it looks right now except I know it will get worse, a lot worse.

              No,no, the E.U. is the first part of the world that comes to rescue. They are planning to become climate-neutral in the year 2050….but all countries of the E.U must co-operate. Other parts of the world will follow that plan soon ?

            20. No,no, the E.U. is the first part of the world that comes to rescue. They are planning to become climate-neutral in the year 2050…

              Oh good gravy, as if climate problems were our only problem. Hell no, that’s not even in the top ten.

            21. I know, I know, you imagine non-fossil energy equal to fossil energy. I will not comment on that other than to say I find that scenario hilarious. I am astonished that anyone can believe it.

              The good people of Qatar agree with you, and are now attempting to cool the great outdoors, pitting fossil fuel against the sun.

              https://www.independent.co.uk/news/world/middle-east/qatar-air-conditioning-temperature-weather-heat-climate-change-athletics-world-cup-a9160751.html

              I predict the sun will win.

            22. It’s not uncommon for the temperature in Qatar to go up by 10C between sunrise and noon. Sometimes a lot more.

              Qatar is a small country, ca 12K square km. How much energy is needed to heat say 100m of air 10C?

              A cubic meter of air weighs about 1.2 kg, and the specific heat of air is about 1. there are about 100*12*1,000,000,000,000 cubic meters of air in the bottom 100 meters over the country. That is 1.2*10^16 cubic meters, or about 1.44*10^20 grams.

              Heating that 10C requires about 1.44*10^20 joules, or 1.44*10^17 Megajoules. A Kwh is 3.6 Megajoules, so that is about 4*10^16 KWh. Divided by the six hours between sunrise and noon, that is 6.66 *10^15 KW.

              Qatar’s current electricity capacity is 8.8 GW, or 8.8*10^6 KW. So they are about 9 orders of magnitude too small to get ‘er done.

              I guess they are like the little train that could: I think I can, I think I can.

              Fossil fuel is a joke compared to solar. Not even worth a footnote.

            23. There has been a lot of burning down of rainforests for agricultural space that”s been occurring also. Might prove worse for the earth than any fuel use.

    2. Lets also keep in mind that much energy since 1940 also was contributed by other sources- hydro, coal, nat gas, nuclear- all growing by huge leaps and bounds.

        1. Over that timeframe, population grew by a factor of 2.3 x’s, while primary energy increased by a factor of 3.5 x’s.
          In other words, energy use has outpaced population growth considerably.
          Are we ready for a big reversal in that equation? If not
          Its either going to be-
          1) contraction of the population,
          2) less energy use per person, or
          3) increase in energy production

          We make the choice and get to work on it, or the choice will be made by the universe for us. I suspect the latter default option will be the path for us.

          1. Hickory,

            There have been several periods where primary energy per capita was flat, potentially other forms of energy will increase as fossil fuel energy decreases after reaching a peak, in addition the economy may use less energy as fossil fuel output winds down and the 30 to 40% efficiency of fossil fuel power, gets replaced by energy sources that have fewer thermal losses.

            In short, energy use may become considerably more efficient.

            1. True, that is what the option #2 I indicated includes- use less energy/person. That can come voluntarily through deliberate acts and innovation. Or it can be be enacted against the will- as in use less because you can’t afford it, or it is simply not available to purchase.

  5. Thanks everybody who has posted anything about population versus energy consumption.
    This data will come in handy indeed for me, later on.

    I can’t see the production of oil growing or even holding steady much longer.

    1. “I can’t see the production of oil growing or even holding steady much longer.”

      What about gas? In 2018, global natural gas production hit a new record of 3 937 Billion cubic metres (Bcm). This is a 4.0% (+152.0 Bcm) increase compared to 2017. This trend has been observed since the financial crisis, with global production of annual gas increasing at an annually compounded growth rate of 2.8% since 2009.

      And, U.S. natural gas production hit a new record high in 2018. U.S. natural gas production grew by 10.0 billion cubic feet per day (Bcf/d) in 2018, an 11% increase from 2017. The growth was the largest annual increase in production on record, reaching a record high for the second consecutive year.

      And, in Australia, LNG production grew 25% to reach 19.3Mt in the 2019 second quarter and is “set to rise significantly” in the third quarter. This is partly due to Shell’s Prelude floating LNG facility offshore Western Australia commencing shipment of about one LNG cargo each week since June, and the Inpex-operated Ichthys project in northern Australia almost reaching full capacity.

      https://smallcaps.com.au/australia-oil-gas-production-record-over-billion-barrels/

      1. Doug,

        Eventually Natural Gas will peak as well, possibly not until 2035 (though URR is even more uncertain than oil, so anywhere 2030 to 2040 is my very speculative estimate for the peak in natural gas output, with perhaps a 50% probability the peak falls in the range I have suggested.) Perhaps as the peak approaches and natural gas prices rise (perhaps around 2030) we might see slower natural gas growth as wind and solar may be considerably cheaper by 2030.

      2. I would argue natural gas is a not so much exploited resource in an environment with high energy prices to allow a LNG market to thrive (not pipeline dependent that is). Shale gas is also not widely adopted.

        But if the perspective is only western based (OECD) countries the peak is near both for oil and gas. I am pretty sure an energy transition is possible in some form without extortion level prices for transported energy from outside OECD; and that could be achieved with a bit of competition. The focus of peak oil/gas can often be too narrow, just focusing on 30% of the geological world (the industrialised developed world).

  6. North Dakota output up in Oct according to shaleprofile 1472 kb/d. Bakken/three forks about 1439 kb/d an increase of about 69 kb/d from Sept.

  8. Saudi Government Spent $2.3B On Aramco’s IPO

    Saudi Arabia’s government itself sank nearly US$2.3 billion in the record-beating initial public offering of the Kingdom’s oil giant Aramco, according to one of the lead managers of the deal, which was aimed at attracting fresh funds into the Saudi economic diversification.

    Saudi Arabia’s government institutions represented 13.2 percent of the institutional investors, according to lead manager Samba Capital, as quoted by Bloomberg.

    The Saudi government actually bought some of the shares that it itself issued. So the claim that this IPO was oversubscribed must be false.

  9. For several months the oil price has been very stable. A little below where we would like to see it, but not by that much. The price has almost climbed to $60 WTI, which is the midpoint of the $55-65 price band.

    Maybe the traders have moved on to other markets?

    1. Traders might possibly be waiting to see whether a trade deal materialises or not, before a big move down or upside.

    2. Shallow sand,

      Tight oil may grow by less than major agencies expect and OPEC+ cuts may finally start to bite.

      If I am correct oil prices may continue to rise to the top of your preferred range by this time next year.

  10. Chevron
    On Tuesday, Chevron said that the write-down of between $10 billion and $11 billion would be for the current quarter as the company revalues some of its assets, including shale gas production sites in Appalachia and deep-water projects in the Gulf of Mexico.
    The nation’s second-largest oil company also announced a $20 billion capital spending budget for 2020, and said it was considering offloading some of its natural gas projects as prices continue to falter.

    1. Hickory,

      Chevron is pulling out of the Kitimat LNG-export project it shares with Woodside Petroleum. Woodside is looking to sell a share of the project too.

      This is from Bloomberg via Rigzone today.

      In other news, Harold Hamm is stepping down as Continental’s CEO.

  11. https://www.eia.gov/outlooks/steo/
    From the EIA December STEO releaced they predict Gaz price down 14 Cents / 5,7% from 2019 level in 2020, oil price brent down by 3 usd or 4,7%. . They Ekspect US oil production wil be average 13.2 million barrels pr. day in 2020 up 900k bpd from 2019 level. respective increase 2018 / 1.6 mbpd , 2019/1.3 mbpd. They also exspect the Shale operators will be able to offset reduced rigg activity by increased productivity. The big question will be are they underestimating the challanges many of thoose Companies have to deliver free cash flow at WTI 55 usd. 3 dollar lower WTI price will have high impact espesialy when DUCs levels became low and the most productive wells are taken.

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