Why we are at Peak Oil Right Now

In this life nothing is certain. Therefore I am not declaring, absolutely, that we are at peak oil, only that it is a near certainty. But I am putting my reputation on the line in making the claim that the period, September 2014 through August 2015 will be the year of Peak Oil. Below are my reasons for making this claim.

First of all, Peak Oil is not a theory. The claim that Peak Oil is a theory is more than a little absurd. Fossil hydrocarbons were created from buried alga millions of years ago and they are finite in quantity. And as long as we keep extracting them in the millions of barrels per day, it is only common sense that one day we will reach a point where their extraction starts to decline. In fact most countries where oil is extracted are already in decline. So obviously if individual countries can experience peak oil then the world as a whole can also experience peak oil.

All charts below are in thousand barrels per day of Crude + Condensate with the last data point September 2014.

World Less USA & Canada

First I want to deal with the portion of the world that reached peak oil about four years ago, in January 2011. That is everywhere else in the world except the US and Canada. I am not saying that every country outside the US and Canada has reached peak oil, but combined they have reached peak oil

The world outside the United States and Canada has been on a bumpy plateau for ten years now and now, even with that last September 2014 surge, is still 1,670,000 barrels below the peak of January 2011. However only a few countries is responsible for this plateau.

The bumpy plateau actually began back in 2005 where the peak was in July. Since them, outside the USA and Canada, there have been 15 countries with production increases and 21 countries with production declines. Here is a look at the 15 winners outside the US and Canada.

Winners

Dealing with the winners one at a time:

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World Oil Production, September Numbers

The EIA has published International Energy Statistics with Crude + Condensate numbers for September 2014. As most of you know I only follow Crude + Condensate because I believe that biofuels and natural gas liquids should not be part of the peak oil equation.

The data in all charts is thousand barrels per day with the last data point September 2014.

World

World oil production was up 1,270,000 barrels per day in September. This was somewhat of a shocker. I had expected production to be up about .9 mbd but not this much.

Non-OPEC

Non-OPEC nations accounted for 833,000 bp/d of the increase.

OPEC C+C

And OPEC nations accounted for 438,000 bpd of the increase. The EIA said OPEC produced 32,734,000 barrels per day of C+C in September. OPEC’s “secondary sources” said OPEC produced 30,560,000 barrels of Crude Only in September. OPEC’s crude only production had dropped to 30,053,000 bpd in November, or over half a million barrels per day lower.

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Bakken, A Tale of Two Counties

North Dakota publishes their Historical Barrels of Oil Production by County which gives county by county production back to 1951. The data here does not include confidential wells but they publish the last couple of months production data that does include confidential wells here: Oil and Gas Production Report. Looking over this data I found something very strange. In October Bakken production was down by 1,598 barrels per day and all North Dakota was down by 5,4054 barrels per day.

All data is in barrels per day with the last data point October 2014.

McKenzieMcKenzie County was up 19,609 barrels per day or 4.88 percent. In October McKenzie was up even more than it was in September when the Bakken was up 52.5 thousand barrels per day.

Mountrail

Mountrail Countywas down 18,728 barrels per day or 6.42 percent. There is  more on this story below.

Dunn

Dunn County was down 3,527 barrels per day or 1.83 percent.
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The EIA’s World Oil Production Numbers

The EIA has recently published their International Energy Statistics. Their stats include all liquids such as NGLs, biofuels and even refinery process gain. But I only track actual oil. The EIA does not track “Crude Only” so we are forced to track what they do track which is Crude + Condensate.

The EIA is about four months behind with their world petroleum data. All data in this report has data through August, 2014 and is in thousand barrels per day.

World

World C+C production was down 124,000 barrels per day in August. But according to the IEA it will be up considerably more in September.

Non-OPEC

Non OPEC production shot up in November, 2013 but has made no progress since. Though US production has continued to climb, declines in the rest of the world have kept it from increasing.
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World Proved Oil Reserves, Fact or Fiction

The EIA publishes Annually a list of World Proved Reserves of Crude Oil. Though all charts in this post use the EIA data, BP, the IEA and virtually every other reporting agency in the world uses basically the same data. It is my contention that this data is misleading and totally meaningless. This is especially true of OPEC Middle East Reserves. However because this data is taken as gospel by the media and perhaps 90% of energy analysts in the world, this misinformation becomes a serious problem.

But first let’s look at the data. It dates to 2014 in most cases but some data only goes to 2013. All data is billion barrels of reserves.

EIA World Proved Reserves The EIA said we had 1,646 billion barrels of proved reserves in 2013. Other agencies put that figure a bit higher but we will go with this. And just where are these reserves located?

World Oil Reserves by Reigon

Almost half of the world’s proved reserves are supposed to be located in the Middle East. Actually it would be well over 60% if it were not for the recent additions to world reserves by the Venezuela Bitumen and the Canadian Tar sands.

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