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In March 2022 Australia’s petroleum product imports have reached almost AU$ 4 bn per month, an increase of 70% compared to December 2019.

Fig 1: Petroleum product imports by volume (black lines) and value (brown line)

Fig 2: Australian dollar to US$ exchange rate

The Australian Dollar was also around 0.7 US$ in December 2019, just like in May 2022 so it was not the exchange rate which drove up the bill in that period. It is the closure of Australian refineries (caused by peak oil of international oil companies), the oil price and the competition for fuels on the Asian market.

The Morrison government’s election-opportunistic cut of fuel excise duty by 50% until Sep 2022 will of course not reduce this import burden on the balance of payments. Fuel imports are now 12% of goods and services imports:

Fig 3: Goods and services debits (imports)
https://www.abs.gov.au/statistics/economy/international-trade/international-trade-goods-and-services-australia/latest-release#goods-and-services-debits-imports-seasonally-adjusted

Fig 4: Diesel imports by volume and value

Fig 5: Diesel imports by country

Australia’s dependency on China and a brand-new Chinese refinery in Brunei in the last years is clearly visible.

Fig 6: Monthly diesel imports

Imports change from month to month depending on the arrival of tankers. Diesel from China has been replaced by Diesel from India.

Fig 7: Petrol imports by value and volume

Fig 8: Petrol imports by country. Singapore now dominates

Fig 9: Jet fuel imports by value and volume

If jet fuel imports go back to their pre-Covid levels of, say, 600 ML/month the jet fuel import bill will double to A$ 700/month.

Conclusion: Australia must reduce its thirst for transport fuels. No new projects should be started which increase fuel consumption.

Australian Oil Stocks Consumption Cover
22 Mar 2022
https://crudeoilpeak.info/australian-oil-stocks-consumption-cover

9/12/2021
Australia crude oil import vulnerabilities Sep 2021 data
http://crudeoilpeak.info/australia-crude-oil-import-vulnerabilities-sep-2021-data

15/2/2021
Exxon-Mobil’s refinery closure in Australia: peak oil context
https://crudeoilpeak.info/exxon-mobils-refinery-closure-in-australia-peak-oil-context

14/11/2020
Australia’s BP Kwinana refinery closure: peak oil context
https://crudeoilpeak.info/australias-bp-kwinana-refinery-closure-peak-oil-context

Will the world ever reach peak crude production of November 2018 again? (part 1)

May 6, 2022

Will the world ever reach peak crude production of November 2018 again? (part 1)

According to EIA data global crude & condensate production peaked in November 2018 at 84.5 mb/d. The peak was short-lived: 2 months above 83 mb/d plus 3 months above 84 mb/d while the average for the remaining months was 82.2 mb/d.

Fig 1: Graph showing additional unconventional and Iraqi crude production after 2008

US shale oil (incremental from 2011), Canadian tar sands (incremental from 2011) and Iraq’s oil (incremental from 2008) contributed to an increase in production above the Dec 2005 peak of 74.2 mb/d. The 2005 peak caused the 2008 oil price shock (Chinese demand for the Olympic games also played a role) and the 2009 financial crisis. The response in the US was quantitative easing QE1-QE3, copied and repeated by many countries, creating a gigantic asset bubble.

Fig 2: Current oil price path compared to 2007/08

Oil prices went up already before the war in Ukraine which is changing the whole world, including oil supply and demand. Lockdowns from Covid, as now again experienced in China, complicate matters.
https://oilprice.com/Energy/Energy-General/Demand-Destruction-Is-Delaying-An-Oil-Supply-Crisis.html

Fig 3: Crude oil production from the 3 big producers

Russia had been a steady producer over the last 15 years, slowly inching up production by 2 mb/d since 2005 but recently flattening out below 11 mb/d. A Rystad study predicted a peak in 2020. More details are in this previous post:

28 Feb 2022 Russian oil production update Nov 2021
https://crudeoilpeak.info/russian-oil-production-update-nov-2021

The Baker Institute for public policy did this analysis:

REROUTE, REDUCE, OR REPLACE?
HOW THE OIL MARKET MIGHT COPE WITH A LOSS OF RUSSIAN EXPORTS AFTER THE
INVASION OF UKRAINE
Mar 2022
https://www.bakerinstitute.org/media/files/files/3bf292f2/ces-pub-russian-oil-040822.pdf

Let’s have a look at the crude oil production changes in the last 5 years:

Fig 4: Countries with the largest changes are stacked on top

…click on the above link to read the rest of the article…

Russian oil production update Nov 2021

February 28, 2022

Russian oil production update Nov 2021

Pic 1: Druzhba oil pipeline, refineries supplied
https://fingfx.thomsonreuters.com/gfx/ce/7/4144/4136/Druzhba%20IEA.pngFig 2: Crude production peaked before Covid at around 10.6 mb/d

That this production level would be some kind of limit was known for a long time

April 2008
The IEA’s latest medium-term outlook, published in July, points to Russia as the third largest contributor to an expected 2.6m b/d increase in non-OPEC supply, just behind Brazil and biofuels. It said that Russia would increase its production to 10.5m b/d in 2012, about 600,000 b/d above last year’s level.
https://www.ft.com/content/967448f4-0b1e-11dd-8ccf-0000779fd2ac
.

Russian oil production might never recover to pre-coronavirus levels, the country’s Energy Ministry has forecast, according to the Kommersant business paper.
In a strategy document outlining prospects for Russia’s critical oil and gas industry, the government said its “base case” — or most likely — scenario, is that Russia’s oil production will never again hit the record levels recorded in 2019.
In the last full year before the pandemic, Russia produced 560 million tons of oil — equivalent to 11.3 million barrels a day. But output dropped for the first time in more than a decade in 2020 as Russia agreed significant production cuts with Saudi Arabia and other members of the OPEC cartel in a bid to support oil prices at the start of the pandemic — pushing production down 9% to 10.3 million barrels per day.
In the scenario labelled most probable, the Energy Ministry predicts Russia’s oil output will grow over the rest of the decade — but fail to hit the record output of 2019, with production hitting a post-coronavirus peak of 11.1 million barrels a day in 2029 before decreasing to 9.4 million barrels a day by 2035.
https://www.themoscowtimes.com/2021/04/12/russia-may-have-passed-peak-oil-output-government-a73558

The Norwegian energy consultant did this analysis:
Lack of field sanctioning drives long-term oil production decline in Russia
August 2019
https://www.rystadenergy.com/newsevents/news/newsletters/EandP/lack-of-field-sanctioning-drives-long-term-oil-production-decline-in-russia/
.

Fig 3: Rystad’s projection of Russian oil production to 2030

The red curve shows the impact of Covid with data from https://minenergo.gov.ru/en/activity/statistics

…click on the above link to read the rest of the article…

Australian fuel import dependencies Sep 2021 Data

December 29, 2021

Australian fuel import dependencies Sep 2021 Data

Diesel Imports

Fig 15: Diesel imports

Diesel imports increased from China since 2015 and also from a brand new Chinese refinery in Brunei. See Fig 18.

Fig 16: Diesel imports from China have been increasing but were nil in July/Aug 21

Fig 17: Australian diesel imports compared to China’s diesel exports

Fig 18: Diesel imports from Brunei

25/3/2021 Brunei peak oil – golden opportunity for China’s Belt and Road Initiative
https://crudeoilpeak.info/brunei-peak-oil-golden-opportunity-for-chinas-belt-and-road-initiative

Note that diesel imports from Taiwan increased as imports from China dropped in the last 3 months:

Fig 19: Monthly diesel imports in last 13 months

The recent diesel import dependency on North East Asia was 36%.

Petrol Imports

Fig 20: Petrol imports by country

Fig 21: Monthly petrol imports in last 13 months

Petrol imports from Singapore increased while those from South Korea decreased, thereby reducing the dependency on shipping lanes around Taiwan.

Fig 22: Covid impact of petrol consumption by State

Petrol consumption in all States dropped April 2020 but had recovered by November 2020. In the following period, NSW and Victoria were most impacted by consecutive Covid waves and lock-downs while other States closed their borders and carried on.

Fig 23: Petrol consumption in Victoria

Fig 24: NSW petrol consumption

NSW petrol consumption in NSW declined by 7% over the pre-Covid period 2010/11 – 2018/19 (= 0.9 % pa). That may be due to a switch to diesel SUVs and pick-ups.

…click on the above link to read the rest of the article…

China peak diesel

November 22, 2021

China peak diesel

Fig 1: Aljazeera video on truck lines October 2021. Shortages could last for months
https://www.youtube.com/watch?v=Sy_uiSlgbIA

BBC reporting:
China rations diesel amid fuel shortages
29/10/21
Petrol stations in many parts of China have begun rationing diesel amid rising costs and falling supplies.

Some truck drivers are having to wait entire days to refuel, according to posts on social media site Weibo.

China is currently in the midst of a massive power crunch, as coal and natural gas shortages have closed factories and left homes without power.

And this latest issue is only likely to contribute to an ongoing global supply chain crisis, say analysts.

“The current diesel shortages seem to be affecting long distance transportation businesses which could include goods meant for markets outside of China,” said Mattie Bekink, China Director at the Economist Intelligence Unit.
https://www.bbc.com/news/business-59059093

Fig 2: Comparison Chinese Diesel prices – Brent spot prices

Images of queuing trucks are in stark contrast to what we find when googling for truck sales:

Fig 3: Line-up of new trucks for the Chinatrucks website
https://www.chinatrucks.com/statistics/2020/0221/article_9181.html

Let’s have a look at statistics from JODI https://www.jodidata.org/oil/

Fig 4: China’s diesel demand, refinery output, imports and exports

China’s refinery output of diesel started to hit a ceiling of 3.5 – 3.6 mb/d in 2014. Diesel consumption is a pretty good indicator for economic activities.

Fig 5: China National Petroleum Company: Diesel, gasoline, kerosene production

CNPC’s annual reports show diesel production peaked between 2011 and 2014 at 60 million tons (1.23 mb/d), dropping thereafter to an average of 54 mt pa.

In 2018, Reuters reported:

China’s diesel demand has peaked, gasoline to peak 2025: CNPC research
18 Sep 2018
BEIJING (Reuters) – China’s diesel demand has peaked and gasoline will peak in 2025, while natural gas demand will increase over the next two decades to feed a massive gasification campaign, according to a forecast released on Tuesday by a research arm of a state energy group.
https://www.reuters.com/article/us-china-energy-forecast-cnpc-idUSKCN1LY0Z0

…click on the above link to read the rest of the article…

Australian Green House Gas emissions down in 2020 due to Covid

October 10, 2021

Australian Green House Gas emissions down in 2020 due to Covid

The Australian Prime Minister claimed emissions are down 20% from 2005 levels

Prime Minister: “…Australia is part of the solution. Our emissions have fallen by 20 per cent since 2005. We are the only country to our knowledge, that engages in the transparency of reporting our emissions reductions, every sector, every gas, every quarter”

The Hon. Angus Taylor MP, Minister for Energy and Emissions Reduction: “We’re seeing extraordinary changes in farming practices, in the deployment of soil testing technologies by farmers across this country bringing down emissions, contributing to Australia’s performance, whereby we met and beat our Kyoto targets, our 2020 targets, 459 million tonnes. We beat those targets, almost a year’s worth of emissions. We’re on track to meet and beat our 2030 targets as well.”

https://www.pm.gov.au/media/press-conference-canberra-act-14

2005 is of course the year in which the Kyoto protocol (adopted in December 1997) came into force https://unfccc.int/kyoto_protocol for which Australia negotiated an INCREASE of 108% on 1990 levels for the commitment period 2008-2012. Remember that PM Rudd ratified Kyoto in December 2007, shortly after coming to power.

So let’s have a look at the latest quarterly report (December 2020) current at the time of the above media release:

Fig 1: Australia’s emissions from the quarterly December 2020 report
https://www.industry.gov.au/data-and-publications/national-greenhouse-gas-inventory-quarterly-update-december-2020

An archive of all quarterly reports since March 2009 can be found here:
https://www.industry.gov.au/data-and-publications/national-greenhouse-gas-inventory-quarterly-updates
Note that the above graph is not zero scaled, so the decline looks impressive. The next graph with the same data gives the right perspective:

Fig 2: Quarterly emissions zero scaled with 2005 (trend) level

We use the data sources XLS file (Figure P1 sheet) and add the 2005 emissions level of 155.7 Mt (sum of quarterly emissions) as a horizontal red line which gives us a decrease of 20.3% by December 2019, the last month before Covid19 hit. The actual quarterly peak was in September 2008.

…click on the above link to read the rest of the article…

Australia’s diesel imports on record high Update June 2021

October 10, 2021

Australia’s diesel imports on record high Update June 2021

Australia’s monthly diesel imports reached a record of 2,360 ML (495 kb/d) in June 2021. While it is common for imports to vary from month to month there is a long term increasing trend. This is caused by diesel consumption on a continuing growth path while Australian refineries are shutting down.

Fig 1: Diesel imports timeline – by country

We see that under the increasing trend there are other structural changes taking place. Imports from Japan went down.

Fig 2: Diesel imports from Japan dropped by 75%

Japan’s refining capacity and throughput is on a long-term decline

Fig 3: Japan’s refining sector (sixth largest in world)

The reasons for the reduction in oil demand are Japan’s declining and aging population, high energy efficiency measures and an expanding fleet of hybrid and electric vehicles. Refinery throughput dropped by 550 kb/d in 2020 due to Covid.

In February 2021 there was an earthquake which hit 20% of Japan’s refining capacity
https://www.reuters.com/article/us-refinery-operations-fuji-oil-co-idUSKBN2AF0YZ

Fig 4: Diesel imports from North East Asian countries and China’s refinery in Brunei

Australia’s declining diesel imports from Japan and to a certain extend from South Korea have been replaced by imports from China, Taiwan and a brand new Chinese refinery in Brunei, thereby creating new dependencies in a concerning context:

7/9/2021 Taiwanese air force responds to incursion by 19 Chinese warplanes as Beijing stays silent
https://www.abc.net.au/news/2021-09-07/chinese-warplanes-enter-taiwanese-air-space/100439132

Fig 5: Diesel imports from China

Fig 6: Diesel imports from Brunei

New South Wales’ coal fired power plants operating at close to rated capacity: winter 2021

July 31, 2021

New South Wales’ coal fired power plants operating at close to rated capacity: winter 2021

This article follows 2 earlier posts on power price spikes in May 2021 (Tomago alu smelter load shedding and Callide C4 explosion)

It is easy enough to click on the following link of the National Electricity Market (NEM) to get the percentage of coal used by power plants:

https://opennem.org.au/energy/nsw1/?range=7d&interval=30m

Fig 1: NSW power generation by source of primary energy for 7 days in July 2021

Note there was a lot of wind on 17/18th and 20th July. The afternoon peaks need gas and (pumped) hydro.
The dependency on coal was around 70% over 7 days (even higher as power imports from Queensland and Victoria also contain coal; pumped hydro may also be powered by off-peak coal). Let’s go through the list of NSW coal plants from AEMO (Australian Energy Market Operator)

Fig 2: AEMO’s generation information for NSW coal plants (dated 13/7/21)
https://aemo.com.au/en/energy-systems/electricity/national-electricity-market-nem/nem-forecasting-and-planning/forecasting-and-planning-data/generation-information

Note that 3 days later on 16/7/21 the Australian Energy Regulator (AER) granted AGL’s application of 30/4/2021 to swap the closure of Liddell units 4 and 3:
Under the exemption, LD03 will close on 1 April 2022. AGL will then delay the closure of LD04 to 1 April 2023.
https://www.aer.gov.au/communication/agl-provided-exemption-from-notice-of-closure-requirements-to-improve-reliability

Compared to the May 2021 version of the above table, Bayswater upgrades (3×25 MW committed) were added. The Redbank power plant has shut down in August 2014 (change log, line 447). There are controversial plans of the current owner of the site to use 1 mt pa of woodchips as fuel source.
https://www.verdantearthtechnologieslimited.com/wp-content/uploads/2021/02/Redbank.pdf

NEM also publishes data on individual power plants and their units:

Fig 3: Bayswater: BW02 was not in operation
https://opennem.org.au/facility/au/NEM/BAYSW/?range=7d&interval=5m

BW01 stopped on the 19th in the middle of the night. That was the beginning of the week. When writing this article, it had not come back. The following graph shows the daily generation over the day.

Fig 4: BW01 stopped on the 19th in the middle of the night

…click on the above link to read the rest of the article…

BP peak oil (UK decline, asset sales and decommissioning Part 1)

May 11, 2021

BP peak oil (UK decline, asset sales and decommissioning Part 1)

West of the Shetland Islands, the battle against oil decline is over for BP. SPGlobal reports:

BP halts production at oldest West of Shetland oil facility Foinaven on asset decline

15 Apr 2021

London — BP has halted production at its oldest West of Shetland oil facility, Foinaven, citing the age of the facility [Petrojarl] and operational challenges, as several BP facilities in the region suffer output setbacks.

Fig 1: FPSO (Floating Production Storage Offloading) Petrojarl Foinhaven, 250 m long, 280 kb storage

https://www.teekay.com/petrojarl-foinaven/

Production from the deepwater field dropped sharply again last year, to 12,000 b/d, far off its 2002 peak of 113,000 b/d.
BP said the field could still contain up to 200 million barrels of resources, which could still be extracted with further investment in alternative facilities, but the current facilities were no longer viable.
“Work had been underway to consider options to extend the life of the vessel out to 2025,” BP said. “However, it has now been concluded that, due to its age and the demands of operating West of Shetland, even with material further investment the Petrojarl Foinaven is not the right vehicle to recover the remaining resources from the Foinaven fields.”
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/041521-bp-halts-production-at-oldest-west-of-shetland-oil-facility-foinaven-on-asset-decline

Let’s have a look at the Foinhaven production, using data from the UK Oil and Gas Authority (OGA):

Fig 2: Foinhaven oil production history
Underlying image: https://www.offshore-technology.com/projects/foinaven/
Off the continental shelf at 400-600 m water depth

Using above OGA data, 393 mb have been produced until January 2021. In BP’s 1998 Form 20-F, Foinhaven’s BP share of reserves(72%) were given as 193 mb, i.e. a total of 268 mb. That oil was extracted by 2007 when production had dropped to half its peak. The reserve growth was therefore 125 mb, but at a much lower and still declining production level.
Foinhaven is located 190 kms west of the Shetland Islands as shown on this map:

…click on the above link to read the rest of the article…

Exxon Mobil’s refinery closure in Australia: peak oil context

February 17, 2021

Exxon Mobil’s refinery closure in Australia: peak oil context

Exxon Mobil’s Melbourne refinery is closing and will be converted into a fuel import terminal. The Australian public broadcaster has found the right title for its article:

Australia loses another oil refinery, leaving our fuel supply vulnerable to regional crises
11/2/2021
https://www.abc.net.au/news/2021-02-11/australia-loses-another-oil-refinery-risking-fuel-supply/13139648

Fig 1: Exxon-Mobil Altona refinery in Melbourne

The refinery has a capacity of 86 kb/d, around 10% of Exxon Mobil’s Asia Pacific capacity.

Fig 2: Exxon Mobil’s refineries in Asia Pacific

“The Altona refinery produces up to 14.5 million litres of refined products per day.
Petrol represents approximately 60 percent of production [8.7 ML/d], with diesel representing a further 30 percent [4.35 ML/d] and jet fuel around 10 percent [1.45 ML/d]. The percentage of each product depends on the type of feedstock used – different types of crude oil, for example, will produce more or less LPG from the refining process.

Around 90 percent of products are transported by pipeline from the refinery to Mobil’s Yarraville terminal and other industry terminals for distribution by road.

The refinery supplies feedstock for the nearby Altona chemical complex, which in turn supplies feedstocks to a number of petrochemical manufacturing plants at Altona. These plants produce the raw material from which a multitude of consumer products are made.”

https://www.exxonmobil.com.au/Energy-and-environment/Energy-resources/Downstream-operations/Altona-Refinery#AltonaRefineryfacts

How much is that compared to Victoria’s fuel sales?

Fig 3: Victoria’s petroleum sales by product

Between 2010 and December 2019 Victoria gasoline sales were practically flat at 400 ML/month or 13.2 ML/day. In contrast, Diesel sales increased by a whopping 5.5% pa from a trend average of 290 ML/month in July 2010 to 440 ML/month or 14.4 ML/day by end 2019. Jet fuel sales increased from 100 ML/month in 2010/11 to 200 ML/month or 6.5 ML/day in 2018/19 (jump due to international flights)

Let’s stack it all up:

Fig 4: Total Victoria fuel sales

…click on the above link to read the rest of the article…

Peak Oil in South & Central America

December 28, 2020

Peak Oil in South & Central America

(1) Pre-Covid

..Fig 1: Oil production and peak years

Production peaked 2015 due to Venezuela’s production collapse. Brazil’s production has not yet peaked but is unlikely to offset Venezuela’s decline. All other countries together are on a bumpy production plateau for the last 20 years.

Fig 2: Oil consumption peaked 2014

Production vs. consumption

Sorted by net exports (difference between production and consumption)

Fig 3: Venezuela last peak was in 2006, since then net exports are down to 560 kb/d

The US imposed sanctions on Venezuela since 2006 but the oil sector was most hit by E.O. 13808 (Aug 2017) and 13850 (Jan 2019) in which PdVSA properties under US jurisdiction were blocked and transactions prohibited. https://fas.org/sgp/crs/row/IF10715.pdf

Fig 4: Venezuela’s oil passing through the Indian Ocean?

7 months after leaving the JOSE terminal in Venezuela, crude oil tanker SAINT MARCELLA appeared at anchorage outside PORT LOUIS Mauritius, for servicing/rebunkering by TRESTA STAR. The destination shown by Vesselfinder was S.LINGGI in Malaysia (Straits of Malacca)

This Reuters article reports:
27 Nov 2020

Exclusive: Venezuela resumes direct oil shipments to China despite U.S. sanctions

Venezuela has resumed direct shipments of oil to China after U.S. sanctions sent the trade underground for more than a year, according to Refinitiv Eikon vessel-tracking data and internal documents from state company Petroleos de Venezuela (PDVSA).

Chinese state companies China National Petroleum Corp (CNPC) and its listed subsidiary PetroChina – long among PDVSA’s top customers – stopped loading crude and fuel at Venezuelan ports in August 2019 after Washington extended its sanctions on PDVSA to include any companies trading with the Venezuelan state firm.

The imposition of the sanctions was part of a push by the Trump administration to oust Venezuelan President Nicolas Maduro, but they failed to completely halt the South American nation’s oil exports or to loosen Maduro’s grip on power.

…click on the above link to read the rest of the article…

ASIA, AUSTRALIA, BP STATISTICAL REVIEW, SOUTH EAST ASIA, VIETNAM

August 17, 2020

Peak oil in Asia Update June 2020 (part 3)

Fig 22: The peak of the largest producer China determined the Asian peak

From the countries in Fig 22 the 3rd and 4th largest oil importers are Thailand and Indonesia with approximately 1 mb/d each.

Fig 23: Thailand is the 3rd largest net importer in Asia …

Fig 24: … closely followed by Indonesia

Fig 25: Indonesia had higher oil consumption growth rates

Number 5 net importer is Australia with half million barrels/day

Fig 26: Australia’s net imports have dropped by 150 kb/d in 2019 due to a production increase

Fig 27: Vietnam experienced a tripling of net oil imports in the last 4 years
Fig 28: Malaysia is net importer since 2011

Fig 29: Other Asian countries have doubled net imports since 2015

Fig 30: By 2010 all these countries had become net oil importers

Previous links:

Peak oil in Asia Update June 2020 (part 2)
https://crudeoilpeak.info/peak-oil-in-asia-update-june-2020-part-2

Peak oil in Asia Update June 2020 (part 1)
https://crudeoilpeak.info/peak-oil-in-asia-update-june-2020-part-1

Peak oil in Asia Update June 2020 (part 1)

July 13, 2020

Peak oil in Asia Update June 2020 (part 1)

Fig 1: Asian oil consumption is around 5 times higher than production

The production decline after the peak in 2015 is very modest. The size of the gap between consumption and production is mainly determined by consumption growth rather than by production decline. Will the Corona virus stop the gap growing?
Let’s have a look at which Asian countries consumed how much oil over the years

Fig 2: Asian oil consumption by country

Total Asia-Pacific oil consumption grew from 26.2 mb/d in 2009 to 36.2 mb/d in 2019 or by 10 mb/d This is net growth consisting of 11.6 mb/d gross growth (out of which 5.8 mb/d in China and 2 mb/d in India) and 1.6 mb/d gross decline (600 kb/d in Japan).

Fig 3: Subgroup with different trends

The subgroup in Fig 3 grew oil consumption at 330 kb/d pa after 2009 until 2017. Then countries above the dotted line (7.2 mb/d in 2019) peaked while the other countries below the dotted line (5.8 mb/d in 2019) continued to grow at 160 kb/d. The net effect was a flat oil consumption for 3 years.

Fig 4: Asia Pacific consumption by fuel

We see how important Diesel is. Fuel oil use is much lower than before the 2nd oil crisis in 1979. Naphta and other fuels are mainly used in the chemical industry.

Asian oil consumption growth is dominated by China and India.

Fig 5: Peak oil in China

Fig 6: China fuel consumption by type

While recent consumption curves in the above graphs look quite smooth, annual changes reveal a more complex picture with varying growth and even decline rates over time and in different countries.

Fig 7: Asian oil consumption growth and decline (gross)

In the last 5 years gross growth came down from 1.6 mb/d to 950 kb/d, dominated by China and India.

China’s oil consumption grew by a whopping 1.1 mb/d in 2010 as a result of a 2009/10 stimulus package amounting to almost 6% of GDP (estimated at RMB 2 Tr). https://treasury.gov.au/publication/chinese-macroeconomic-management-through-the-crisis-and-beyond/2011-01-chinese-macroeconomic-management-through-the-crisis-and-beyond/4-chinas-stimulus-package

…click on the above link to read the rest of the article…

Australia outsources its oil reserve problem to the US

June 6, 2020

Australia outsources its oil reserve problem to the US

From the Energy Minister’s media release:

Australia to boost fuel security and establish national oil reserve

The Australian Government is boosting the nation’s long-term fuel security by taking advantage of dramatic falls in global oil prices and building on our historic agreement with the United States to access their Strategic Petroleum Reserve (SPR).

Australia has been negotiating access to the SPR since 2018, with Minister Taylor and US Energy Secretary Dan Brouillette signing the first arrangement of its kind to facilitate this deal in March of this year.

Australia will spend $94 million to buy oil at the current low global prices. Australia has access to hold oil in the US SPR for an initial period of 10 years.

https://www.minister.industry.gov.au/ministers/taylor/media-releases/australia-boost-fuel-security-and-establish-national-oil-reserve

Fig 1: Location of SPR caverns

https://www.energy.gov/sites/prod/files/2019/02/f59/EXEC-2018-001277%20-%202017%20SPR%20Report.pdf

Bryan Mound: Freeport, 19 caverns, 247 MMbbl

Big Hill: 14 caverns, 170 MMbbl

West Hackberry: 21 caverns, 220 MMbbl

Bayou Choctaw: Mississippi, 9 caverns, 76 MMbbl

Drawdown rates and type of oil see Fig 12

Australia boosts oil reserves, but how many barrels does $94 million get?

24/4/2020

Federal Minister for Energy Angus Taylor told ABC News Breakfast on Thursday the country would go through about 1 million barrels — roughly 159 million litres — a day. This figure has been consistent for at least the past five years according to the Australian Petroleum Statistics.

On Thursday, crude oil was trading at roughly $22 per barrel in Australia, which resulted in roughly 4.2 million barrels for a $94 million purchase. So, Australia has purchased roughly four to five days’ worth of crude oil from the United States.

https://www.abc.net.au/news/2020-04-24/explainer3a-australia27s-oil-purchase/12177060

In fact, consumption of petroleum products has been increasing (before Corona virus):

Fig 2: Fuel consumption

But the SPR is about replacing lost crude oil imports, not product imports.

Fig 3: Australia’s crude imports by country

Crude imports from neighbouring Asian countries have been in decline for 10 years because production in these countries has peaked as shown in this graph:

…click on the above link to read the rest of the article…

Impact of Corona Virus similar to some earlier peak oil scenarios

May 10, 2020

Impact of Corona Virus similar to some earlier peak oil scenarios

Empty roads, grounded aircraft, falling tourist and international student numbers, plunging car sales, empty super market shelves, disrupted supply chains…

Fig 1: Empty roads in Wuhan in February 2020

China Car Sales Slump 92% in First Half of February on Virus

21 Feb 2020

Fig 2: Chinese car sales were down since June 2018

https://www.bloomberg.com/news/articles/2020-02-21/china-car-sales-tumble-92-in-first-half-of-february-on-virus

That all sounds like peak oil has hit except that oil prices are low now. Which may change of course as low oil prices may mean that US shale oil is likely to peak earlier than otherwise would have been the case.

Fig 3: US tight oil production

https://www.eia.gov/petroleum/drilling/

The graph shows that tight oil production took off when oil prices were around $100/barrel but peaked in March 2015 and then declined as oil prices dropped to $50/barrel. Production started to recover in September 2016 but almost half of the production (mainly from Bakken, Eagle Ford, Niobrara and Aanadako) has already peaked again in October 2019 and in March 2020 is estimated to be just 240 kb/d higher than the 2015 peak. The other half of the production, from the Permian (Texas) is still growing but monthly growth rates have declined from 180 kb/d in mid 2018 to 40 kb/d now. Recent data are preliminary.

Coronavirus Delivers Another Blow to Embattled Shale Drillers

29 Feb 2020

Frackers already faced financial woes in 2020, even before the virus threatened oil demand

Shale drillers were already braced for a tough year. Now the new coronavirus is putting them under even greater financial pressure.

Exploration and production companies are straining to slow growth—amid an oversupply of oil and gas—and cut spending to appease investors angry over poor returns. Now the virus has further weakened global demand for their products, posing a greater challenge to a sector where many companies are saddled with debt.

https://www.wsj.com/articles/coronavirus-delivers-another-blow-to-embattled-shale-drillers-11582990892

Fig 4: Breakeven oil prices in the US

…click on the above link to read the rest of the article…

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