Home » Posts tagged 'world energy outlook'

Tag Archives: world energy outlook

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

Many signs of peak oil and decline

February 23, 2020

Many signs of peak oil and decline

Preface.  Recently the IEA 2018 World Energy Outlook predicted an oil crunch could happen as soon as 2023.  Oil supermajors are expected to have 10 years of reserve life or more, Shell is down to just 8 years.

Political shortages are as big a problem as geological depletion. At least 90% of remaining global oil is in government hands, especially Saudi Arabia and other countries in the middle east that vulnerable to war, drought, and political instability.

And in 2018, the U.S. accounted for 98% of global oil production growth and since 2008, the U.S. accounted for 73.2% of the global increase in production (see Rapier below).   What really matters is peak diesel, which I explained in “When trucks stop running”, and fracked oil has very little diesel, much of it is only good for plastics, and yet America may well be the last gasp of the oil age if production isn’t going up elsewhere.

Related

2019. When will ‘peak oil’ hit global energy markets? dw.com.  Darren Woods, CEO of ExxonMobil predicts a 25% rise in global energy demand for the next two decades, due to “global demographic and macroeconomic growth trends. When you factor in depletion rates, the need for new oil grows at 8% a year,” he told analysts in March.

***

Clearly the depth of wells we need to drill show we are reaching peak oil production:  2019-11-19 The Truth About The World’s Deepest Oil Well

How deep into the ground do we have to go to tap the resources we need to keep the lights on? How deep into the ground are we able to go? 

The first oil well drilled in Texas in 1866 was a little over 100 feet deep: the No 1 Isaac C. Skillern struck oil at a depth that, from today’s perspective, is ridiculously shallow.

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

Many signs of peak oil and decline

November 1, 2019

Many signs of peak oil and decline

Preface.  Recently the IEA 2018 World Energy Outlook predicted an oil crunch could happen as soon as 2023.  Oil supermajors are expected to have 10 years of reserve life or more, Shell is down to just 8 years.

Political shortages are as big a problem as geological depletion. At least 90% of remaining global oil is in government hands, especially Saudi Arabia and other countries in the middle east that vulnerable to war, drought, and political instability.

And in 2018, the U.S. accounted for 98% of global oil production growth and since 2008, the U.S. accounted for 73.2% of the global increase in production (see Rapier below).   What really matters is peak diesel, which I explained in “When trucks stop running”, and fracked oil has very little diesel, much of it is only good for plastics, and yet America may well be the last gasp of the oil age if production isn’t going up elsewhere.

Related articles:

2019-6-10 World crude production outside US and Iraq is flat since 2005

***

Rapier, R. 2019. The U.S. accounted for 98% of global oil production growth in 2018. Forbes.

Earlier this month BP released its Statistical Review of World Energy 2019.   The U.S. extended its lead as the world’s top oil producer to a record 15.3 million BPD (my comment: minus 4.3 million BPD natural gas liquids, which really shouldn’t be included since they aren’t transportation fuels). In addition, the U.S. led all countries in increasing production over the previous year, with a gain of 2.18 million BPD (equal to 98% of the total of global additions),… which helped offset declines from Venezuela (-582,000 BPD), Iran (-308,000 BPD), Mexico (-156,000 BPD), Angola (-143,000 BPD), and Norway (-119,000 BPD).

Peak demand?  Hardly: “the world set a new oil production record of 94.7 million BPD, which is the ninth straight year global oil demand has increased.

Fickling, D. 2019. Sunset for Oil Is No Longer Just Talk. Bloomberg.

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

IEA 2018 World Energy Outlook: Peak oil is here, oil crunch by 2023

March 10, 2019

IEA 2018 World Energy Outlook: Peak oil is here, oil crunch by 2023

Preface. I’ve been working on a post about the latest IEA 2018 World Energy Outlook report, but the excerpts from the cleantechnica article below states most clearly why there is likely to be a supply crunch as soon as the early 2020s and the investment implications.

Meanwhile, here’s what I’ve gleaned from other summaries of the report.

Although many hope that oil companies will drill for oil when prices go up and close the supply gap looming within the next few years, very little oil has been found to drill for for several years now. The IEA 2018 report also says that shale oil will not rescue us, and likely to peak in the mid-2020s.

Oil companies do have money, but they haven’t been drilling because there’s no cheap oil to be found, so instead they’ve been spending their money buying their shares back.

From  crashoil.blogspot.com: World Energy Outlook 2018: Someone shouted “peak oil”

This excerpt is in Spanish translated to English by google.  It shows a civilization crashing 8% decline rate that the IEA hopes will be brought to an also civilization crashing 4% rate with new oil drilling projects.

“How is this alarming graph interpreted? According to the text, the red is what they call “natural decline” and corresponds to how oil production would decrease if the companies did not even invest in maintaining the current wells; As explained in the report, it is 8% per year. The pink area corresponds to the “observed decline” and is what the IEA inferred how production will actually decline if companies invest what is needed for the correct maintenance of the current deposits. This decline corresponds to 4% per year.

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

Is An Oil Supply Crunch Inevitable?

November 14, 2018

Is An Oil Supply Crunch Inevitable?

Petrotrin

Global oil demand will peak by 2040, according to a new report, although oil supply shortages could emerge before then.

The International Energy Agency (IEA) published its highly-anticipated World Energy Outlook 2018 on Tuesday, one of the most important energy forecasting reports published each year. In this year’s Outlook, the IEA noted that global oil demand is set to rise by 1 million barrels per day (mb/d) each year through 2025, before slowing dramatically to 0.25 mb/d thereafter.

Electric vehicles are already making inroads in the transportation sector, and that is expected to accelerate in the years ahead. By the mid-2020s, the IEA says that oil demand peaks in the market for passenger vehicles, even as vehicle sales rise by 80 percent through 2040. The agency sees 300 million EVs on the roads by 2040, which should displace about 3.3 million barrels of oil demand.

Still, demand continues to grow and doesn’t peak until 2040, which, at this point, is a pretty conservative estimate in the universe of peak demand forecasts.

The reason for this is that the IEA believes that other sectors start to take on a growing importance in driving oil demand. Everyone thinks of cars and trucks as the main source of oil demand, but over the next two decades, petrochemicals, aviation and heavy trucking account for the lion’s share of demand growth. Here are a few key figures in the IEA’s main forecast:

• Petrochemicals see 5 mb/d of demand growth, the largest of any sector.

• Heavy trucks account for 4 mb/d of demand growth through 2040, even though vehicle and logistical efficiencies avoid nearly 5.5 mb/d of additional demand growth.

• Developing economies see more than 5 mb/d of demand growth for passenger vehicles, but that is just about entirely offset by declining demand (largely due to EVs) in advanced economies.

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

The Rapid Acceleration Towards Peak Oil Demand

November 6, 2018

The Rapid Acceleration Towards Peak Oil Demand

crude oil

The drumbeat towards peak oil demand is accelerating, but since much of the acceleration is happening outside of the United States, its cadence is muted.

To be clear, the developed world passed peak oil demand a decade ago and has for years been forecast to continue reducing its demand. Increasing demand in industrializing countries, particularly China and India, each with a population tantamount to that of the OECD, slightly overpowers declines in the developed world, and as a result, global demand continues to increase. In its 2015 World Energy Outlook, the IEA forecast 1.5% y/y increase outside the OECD, -1.2% y/y in the OECD, and an overall growth of 0.5%. Global peak demand will likely occur while developing world demand is still growing. Increased decline in the first world could crest demand, but merely slowing the growth in the rest of the world is the more likely to tip the global balance to plateau then decline.

Demand for oil is dominated by transportation (cars, trucks/trains, planes and boats) and industry (plastics, fertilizers, steam/heat). Passenger vehicles comprise about 25% of global oil demand and thus are the number one target for major emissions reductions. When the IEA released its 2015 World Energy Outlook mentioned above, not a country on the planet had stated plans to ban new sales of oil-fueled cars. Only Japan and Portugal had even created incentives for electric vehicles. In 2016, three European countries outlined plans to end sales of new gasoline and diesel engines. Before the year was over, IEA revised its OECD forecast downward to -1.3% per year.

In 2017 a rash of targets to constrain fossil fuels for cars led Forbes to declare it to be “The Year Europe Got Serious about Killing the Internal Combustion Engine.”

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

Does the IEA try to hide the conventional crude oil peak in its 2017 World Energy Outlook?

December 4, 2017

Does the IEA try to hide the conventional crude oil peak in its 2017 World Energy Outlook?

In this post we look at crude oil production in the World Energy Outlook released in November 2017

WEO-2017-Table_4-5

Fig 1: WEO 2017 oil supply

Note that the 5 year interval table omits 2005 and 2010. Is this to conceal the 2005 conventional peak (see Fig 6)? The immediately important year 2020 also isn’t there.

Let’s put the crude oil related data of the above table 4.5 into a graph, thereby interpolating between 2016 and 2025 for 2020.

IEA_WEO_2017_crude_oil_table_4-5

Fig 2: WEO 2017 crude oil

Production from existing conventional fields declines by around 4% pa to just 23.5 mb/d in 2040. Enhanced oil discovery, fields yet-to-be-approved and yet-to-be found are calculated in such a way that total conventional production does not decline much. The important message here is that it won’t grow. Only unconventional oil is assumed to bring growth in production.

Traditionally, the IEA calculated the “call on OPEC” as a balancing item between demand and Non-OPEC production. Maybe that call is no longer heard.

In Fig 2, the underlying methodology is more complex:

  • Show perpetual production growth to match assumed demand growth
  • Determine decline in existing fields
  • Add enhanced oil recovery
  • Add yet-to-be developed
  • Add yet-to-be found so that conventional production declines only marginally or looks rather flat
  • Stack on top growing tight oil and heavy oil to show overall growth

Let’s compare WEO 2017 with WEO 2016

IEA_WEO-2016_crude_oil_table_3-11

Fig 3: Crude production forecast in the WEO 2016

We can see that the WEO 2016 was more detailed on existing fields. It showed post peak oil fields (70%), legacy fields (10 %) and ramp-up fields (20 %).

IEA_WEO_2017_existing-field_EOR_comparison_2016

Fig 4: Comparison existing fields WEO 2017 -2016

In the above stacked clustered graph we see that “existing fields” in the WEO 2017 are lower and therefore decline is higher (up to 2025) than the 4 categories of the WEO 2016 report: post peak, legacy, ramp-up and approved-not producing plus enhanced oil recovery (EOR).

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

IEA: US$ 40 oil means 3 mp/d less oil by 2020

November 16, 2015

IEA: US$ 40 oil means 3 mp/d less oil by 2020

You want $40 oil? Yes, please. But according to the World Energy Outlook 2015 of the International Energy Agency, recently released in London, that would mean 3 mb/d less US tight (shale) oil by 2020.  That’s about 4% of global crude production.

Fly less and drive less.

Fig 1: Slide from the WEO 2015 presentation

http://www.worldenergyoutlook.org/media/weowebsite/2015/151110_WEO2015_presentation.pdf

 Let’s put that into a graph for the $50 scenario:

Fig 2: US monthly crude production

The graph shows a 4 mb/d increase in US crude oil production, mainly tight oil from Texas (Eagle Ford, Permian), North Dakota (Bakken) and Niobrara (Colorado, Wyoming) between 2011 and 2015. The other States plus the Gulf of Mexico and Alaska remained on an undulating production plateau. The red production line descends by 2.5 mb/d over 5 years to 2020,  with an oil price of $50 a barrel (dashed black line)

The EIA data for the above graph are from here:

US crude oil
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

WTI oil price
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rwtc&f=m

The latest drilling productivity report from here
http://www.eia.gov/petroleum/drilling/
shows some details about peaking tight oil production

Bakken

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

IEA Sees No Oil Price Rebound For Years

November 11, 2015

IEA Sees No Oil Price Rebound For Years

Oil prices are likely to stay below $80 per barrel for another five years, according to a closely watched energy report.

The International Energy Agency released its 2015 World Energy Outlook (WEO), with predictions for energy markets out to 2040. Although there are no shortage of caveats, the IEA projects that oil prices will only rebound slowly and intermittently, and the supply overhang will slowly ease through the rest of the decade. In its “central” scenario, it sees oil prices rebalancing in 2020 at $80 per barrel, with increases in the years following.

At issue, as always, is supply and demand dynamics. The IEA estimates that the oil industry will slash upstream investment by 20 percent in 2015, which will cut into long-term supply figures. Non-OPEC supply will peak before 2020 as a result of much lower investment, topping off at 55 million barrels per day.

Related: Venezuela Liquidating Assets As Economic Crisis Worsens

U.S. shale will recover as prices rebound, but the IEA still sees it as a passing fad. As the sweet spots get played out in the U.S., and costs remain elevated compared to other sources of production from around the world, shale will not be around for the long haul. The IEA sees U.S. shale output plateauing in the early 2020s at 5 million barrels per day. Thereafter, it declines.

The IEA weighs a scenario in which oil prices don’t actually rebound in the medium to long-term, however. In this scenario, OPEC continues to pursue market share, U.S. shale remains resilient, and the global economy doesn’t perform as well as expected. All of that adds up to oil prices remaining at $50 per barrel through the remainder of the decade and only rising to $85 per barrel by 2040.

Of course, there is a flip side to that coin. Persistently low prices gut investment in new sources of supply, which sow the seeds for a supply shortage in the years ahead. As a result, prices could spike.

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

IEA Says Oil Supplies May Not Keep Up With Demand

November 13, 2014

IEA Says Oil Supplies May Not Keep Up With Demand.

Despite what appears to be a saturated oil market in 2014, oil producers around the world will struggle to meet rising demand over the next few decades.

In its latest annual World Energy Outlook, the International Energy Agency (IEA) warned that the current period of oil abundance may be fleeting, and in fact, without heroic levels of production increases, oil markets will grow dangerously tight in the coming years.

Global oil demand is expected to increase by 37 percent by 2040, with a dominant proportion of that coming from developing countries – i.e. China and India. In fact, the IEA says that for every barrel of oil the industrialized world expects to eliminate from demand through efficiency or other ways of reducing demand, developing countries will burn through two additional barrels.

The IEA predicts that the world will need to extract an additional 14 million barrels of oil per day (bpd) by 2040, which comes on top of today’s production levels of about 90 million bpd. While there is a lot of triumphalism in the United States about shale oil production and how places like the Bakken and the Eagle Ford have ushered in an era of abundance, the IEA says that tight oil production in the U.S. – along with Canadian oil sands – will only last until the mid-2020’s.

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

 

Watching the Watchdogs: 10 Years of the IEA World Energy Outlook « integral permaculture

November 13, 2014

Watching the Watchdogs: 10 Years of the IEA World Energy Outlook « integral permaculture.

The International Energy Agency (IEA) is the energy watchdog of the industrial world. The developed nations of the world were caught off guard by the oil crisis of 1973. They then realized energy resources are so fundamental to all of civilization, and recognized how vulnerable we are to supply disruptions. Forty years ago in 1974, the International Energy Agency was formed, tasked with keeping an eye on these precious resources, and providing policy makers around the world with information to make better informed planning decisions.

The primary deliverable from the IEA is the massive World Energy Outlook (WEO) report that is released annually in November. Concerned about peak oil, I began reading the Executive Summary to this report 10 years ago. Five years ago I wrote a summary of what the report has been telling us from 2005 – 2009, concerning issues related to peak oil: The IEA and World Oil Supply Projections. Given that another 5 years have passed, I offer an update, which will bring us to today’s release of the 2014 World Energy Outlook.

The short version is this: The IEA World Energy Outlook has gradually moved from rosy to pessimistic reports over the last ten years, or what Stuart Staniford called “increasingly reality-based.” Over the last decade, the report’s projected oil demand has gradually decreased by 20 million barrels per day (mb/d), and the projected costs have continued to rise. Yet even their most pessimistic reports, I believe, fail to capture true reality. It seems that politics plays a strong role in what is allowed to be published. It also must be stated that predicting the future “is a fool’s errand,” as Kurt Cobb reminds us in his review of the 2013 report.

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

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress