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The 2005 Peak Falls

Today the Energy Information Administration released the December 2008 oil production numbers. Peak Oil 2005 is now history. 2008 has officially eclipsed the previous 2005 peak for the all-time annual oil production record, albeit just barely over 2005. Average daily production in 2005 was 73.737 million barrels per day (crude oil plus condensate) and average daily production in 2008 was 73.791 million barrels per day. For the year, 93.6 million more barrels were produced in 2008 than in 2005. Had prices not collapsed in the 2nd half of 2008 – causing many producers to dial production back – the record would have likely been much higher.

Just in case you are keeping score, the monthly record also now resides in 2008. July 2008 checked in at 74.8 million barrels per day. One wonders what that makes Ken Deffeyes, who after calling the peak in December 2005 (at 74.2 million bpd), said “I can now refer to the world oil peak in the past tense. My career as a prophet is over. I’m now an historian.”

The numbers may be found here: Crude Oil Including Lease Condensate

I have been saying since 2006 that I didn’t think the 2005 peak would stand (and sometimes getting into heated arguments with dogmatic believers as a result). But due to the economic collapse, I expect 2008 will stand as the record for a while – and quite possibly forever. It all hinges on how long it takes for demand to recover. OPEC has shaved about 2 million barrels a day off of production since summer, and I suspect they will be very slow to open the taps back up if prices head higher. If we don’t eclipse the 2008 production numbers within 3 years or so, I don’t think we ever will.

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March 11, 2009 - Posted by | EIA, Peak Oil

91 Comments

  1. The EIA also issued a report today once again lowering projections for demand.
    One thing I don’t understand: Why does BP refer to 82 mbd for global production, and EIA 73.7? What happened to the 9 mbd? And then some pubs refer to 87 mbd. A few mbd here, and a few mbd there, and it starts to add up.

    Comment by benny "centipede glut" cole | March 11, 2009

  2. The EIA also issued a report today once again lowering projections for demand.
    One thing I don’t understand: Why does BP refer to 82 mbd for global production, and EIA 73.7? What happened to the 9 mbd? And then some pubs refer to 87 mbd. A few mbd here, and a few mbd there, and it starts to add up.

    Comment by benny "centipede glut" cole | March 11, 2009

  3. The EIA also issued a report today once again lowering projections for demand.One thing I don’t understand: Why does BP refer to 82 mbd for global production, and EIA 73.7? What happened to the 9 mbd? And then some pubs refer to 87 mbd. A few mbd here, and a few mbd there, and it starts to add up.

    Comment by benny "centipede glut" cole | March 11, 2009

  4. Why does BP refer to 82 mbd for global production, and EIA 73.7?

    It’s the difference between ‘all liquids’, which ends up double-counting some fuels and just crude oil production. In the all-liquids category you may have diesel counted that was then used in the process of making ethanol (for example) and both are counted. This category also includes things like orimulsion, which is an emulsion of 70 percent bitumen and water.

    RR

    Comment by Robert Rapier | March 11, 2009

  5. Why does BP refer to 82 mbd for global production, and EIA 73.7?

    It’s the difference between ‘all liquids’, which ends up double-counting some fuels and just crude oil production. In the all-liquids category you may have diesel counted that was then used in the process of making ethanol (for example) and both are counted. This category also includes things like orimulsion, which is an emulsion of 70 percent bitumen and water.

    RR

    Comment by Robert Rapier | March 11, 2009

  6. Why does BP refer to 82 mbd for global production, and EIA 73.7?It’s the difference between ‘all liquids’, which ends up double-counting some fuels and just crude oil production. In the all-liquids category you may have diesel counted that was then used in the process of making ethanol (for example) and both are counted. This category also includes things like orimulsion, which is an emulsion of 70 percent bitumen and water.RR

    Comment by Robert Rapier | March 11, 2009

  7. Thanks RR

    I wonder how much energy it took to get the 73.7 for 2008 vs like amount in 2005? We will never know, but I would wager a good deal more.

    Comment by Nate | March 11, 2009

  8. Thanks RR

    I wonder how much energy it took to get the 73.7 for 2008 vs like amount in 2005? We will never know, but I would wager a good deal more.

    Comment by Nate | March 11, 2009

  9. Thanks RRI wonder how much energy it took to get the 73.7 for 2008 vs like amount in 2005? We will never know, but I would wager a good deal more.

    Comment by Nate | March 11, 2009

  10. We’ll never produce more than we do right now if Ghawar tanks. You’ve got to wonder why Saudi production was declining while oil prices were tripling.

    Comment by Maury | March 11, 2009

  11. We’ll never produce more than we do right now if Ghawar tanks. You’ve got to wonder why Saudi production was declining while oil prices were tripling.

    Comment by Maury | March 11, 2009

  12. Just to complicate matters, BP says the world produces a few mbd less than it consumes, and consistently for decades. Of course, this is impossible. BP explains the difference as “Note: Differences between these world consumption figures and world production statistics on page 9 are accounted for by stock changes; consumption of non-petroleum additives
    and substitute fuels; and unavoidable disparities in the definition, measurement or conversion of oil supply and demand data.”
    Long stpry short: We do not have very accurate figures for global production and consumption of oil, or other liquid productions, such as GTL, condensate, or biofuels.
    And we especially do not have real time figures, Let alone good quarterly or monthly data.
    Adding to the mess, the price signal has become a speculative yo-yo.
    Anybody who authoritatively tells you something about peak production, or oil market tightness is just blowing smoke out his rear end. The stats are not there. It is guesswork.
    Makes for excellent arguments, however. Nobody is truly wrong in real time. The facts are borne out over years or decades.

    Comment by benny "centipede glut" cole | March 11, 2009

  13. Just to complicate matters, BP says the world produces a few mbd less than it consumes, and consistently for decades. Of course, this is impossible. BP explains the difference as “Note: Differences between these world consumption figures and world production statistics on page 9 are accounted for by stock changes; consumption of non-petroleum additives and substitute fuels; and unavoidable disparities in the definition, measurement or conversion of oil supply and demand data.”Long stpry short: We do not have very accurate figures for global production and consumption of oil, or other liquid productions, such as GTL, condensate, or biofuels. And we especially do not have real time figures, Let alone good quarterly or monthly data.Adding to the mess, the price signal has become a speculative yo-yo.Anybody who authoritatively tells you something about peak production, or oil market tightness is just blowing smoke out his rear end. The stats are not there. It is guesswork. Makes for excellent arguments, however. Nobody is truly wrong in real time. The facts are borne out over years or decades.

    Comment by benny "centipede glut" cole | March 11, 2009

  14. I have a question: How come we have a new peak since we are in the middle of a global financial crisis, with oil demand and OPEC production reduced? Can someone plz explain?

    Comment by Anonymous | March 11, 2009

  15. I have a question: How come we have a new peak since we are in the middle of a global financial crisis, with oil demand and OPEC production reduced? Can someone plz explain?

    Comment by Anonymous | March 11, 2009

  16. How come we have a new peak since we are in the middle of a global financial crisis, with oil demand and OPEC production reduced? Can someone plz explain?

    This is for the entire year of 2008, and recall that prices got very high during the year. Had they not collapsed in the 2nd half of the year, I think the previous record would have been shattered instead of barely eclipsed.

    RR

    Comment by Robert Rapier | March 11, 2009

  17. How come we have a new peak since we are in the middle of a global financial crisis, with oil demand and OPEC production reduced? Can someone plz explain?This is for the entire year of 2008, and recall that prices got very high during the year. Had they not collapsed in the 2nd half of the year, I think the previous record would have been shattered instead of barely eclipsed.RR

    Comment by Robert Rapier | March 11, 2009

  18. I think we’re about to have the mother of all oil shocks. Why are the Saudi’s producing well below their quota? Out of goodness of their tiny hearts for other OPEC members? Highly doubtful. Much more likely that Ghawar is depleting rapidly,just like Cantarell.

    Comment by Maury | March 11, 2009

  19. I think we’re about to have the mother of all oil shocks. Why are the Saudi’s producing well below their quota? Out of goodness of their tiny hearts for other OPEC members? Highly doubtful. Much more likely that Ghawar is depleting rapidly,just like Cantarell.

    Comment by Maury | March 11, 2009

  20. Bottom line is that it doesn’t matter much as long as prices and the economy stay down. That will delay new production long enough that declines will win in the end. I agree with Robert that if production doesn’t exceed 2008 levels within two years, it never will. And with all the delays and mothballed projects, I just don’t see how it can. Deffeyes was close enough. Peak is history. The economic crunch has guaranteed it.

    Comment by Tom Atkins | March 11, 2009

  21. Bottom line is that it doesn’t matter much as long as prices and the economy stay down. That will delay new production long enough that declines will win in the end. I agree with Robert that if production doesn’t exceed 2008 levels within two years, it never will. And with all the delays and mothballed projects, I just don’t see how it can. Deffeyes was close enough. Peak is history. The economic crunch has guaranteed it.

    Comment by Tom Atkins | March 11, 2009

  22. We may have seen peak oil production (although the the examples of Libya, Iran, Iraq, Nigeria, Mexico, and Venezuela suggest there is plenty oil not being tapped due to political, not geological, reasons. Add to that the volitional decreases by OPEC nations, and one could suggest that geologically speaking, we are flooded with oil right. Actually, we are flooded right now anyway, even with all these cutbacks).
    I wonder if demand will ever come back. After each previous oil shock, demand did come back, but more faintly each time.
    Even with the global economy going great guns 2004-2008, oil demand was rising in the 1 percent range annually.
    Sadly, the current recession actually looks like a depression lite (a recession is when your neighbor loses his job, a depression is when you lose your job). The World Bank is forecasting a 15 percent drop in industrial output in 2009 over 2008.
    Friends, there is untold misery in those simple numbers, and I don’t wish economic hard times on anybody.
    But it means oil demand will be soft for years and years. I wonder if 2007 was the all-time Peak Demand year.
    With PHEVs becoming commercialized, even with an economic recovery, we will move into a new era, a post-fossil era. The oil sector will become a backwater business, dominated by unreliable Third World buffoons and thug states. Being unreliable, we use less and less and less oil. Biofuels boom, CTL booms, GTL grows, natural gas vehicles boom, etc.
    And more and more and more money stays in our own economies. Not a bad outlook.

    Comment by benny "centipede glut" cole | March 11, 2009

  23. We may have seen peak oil production (although the the examples of Libya, Iran, Iraq, Nigeria, Mexico, and Venezuela suggest there is plenty oil not being tapped due to political, not geological, reasons. Add to that the volitional decreases by OPEC nations, and one could suggest that geologically speaking, we are flooded with oil right. Actually, we are flooded right now anyway, even with all these cutbacks). I wonder if demand will ever come back. After each previous oil shock, demand did come back, but more faintly each time. Even with the global economy going great guns 2004-2008, oil demand was rising in the 1 percent range annually. Sadly, the current recession actually looks like a depression lite (a recession is when your neighbor loses his job, a depression is when you lose your job). The World Bank is forecasting a 15 percent drop in industrial output in 2009 over 2008. Friends, there is untold misery in those simple numbers, and I don’t wish economic hard times on anybody.But it means oil demand will be soft for years and years. I wonder if 2007 was the all-time Peak Demand year.With PHEVs becoming commercialized, even with an economic recovery, we will move into a new era, a post-fossil era. The oil sector will become a backwater business, dominated by unreliable Third World buffoons and thug states. Being unreliable, we use less and less and less oil. Biofuels boom, CTL booms, GTL grows, natural gas vehicles boom, etc. And more and more and more money stays in our own economies. Not a bad outlook.

    Comment by benny "centipede glut" cole | March 11, 2009

  24. benny cole: Just to complicate matters, BP says the world produces a few mbd less than it consumes, and consistently for decades. Of course, this is impossible.
    As I understand it, refined petroleum products are less dense on average than the crude they’re made from.

    Maury: Why are the Saudi’s producing well below their quota?
    Uh, because demand is way down, and storage is filling up? If they don’t absolutely need the money, why pull it out of the ground now, when they can hope to sell it later for ~twice as much?

    Comment by Bill | March 11, 2009

  25. benny cole: Just to complicate matters, BP says the world produces a few mbd less than it consumes, and consistently for decades. Of course, this is impossible.As I understand it, refined petroleum products are less dense on average than the crude they’re made from.Maury: Why are the Saudi’s producing well below their quota?Uh, because demand is way down, and storage is filling up? If they don’t absolutely need the money, why pull it out of the ground now, when they can hope to sell it later for ~twice as much?

    Comment by Bill | March 11, 2009

  26. If we don’t eclipse the 2008 production numbers within 3 years or so, I don’t think we ever will.
    I think you are spoiling a good write-up with an extremely questionable prediction, RR! Who knows what the future holds? Five (or fifteen) years from now, a confluence of events (oil prices at $500/bbl?) may push oil production to new records, even if it is just for 30 days. Your prediction will be in the shredder, along with much of your credibility. Even if (hypothetically speaking), broadly speaking you are spot on…

    Comment by Optimist | March 11, 2009

  27. If we don’t eclipse the 2008 production numbers within 3 years or so, I don’t think we ever will.I think you are spoiling a good write-up with an extremely questionable prediction, RR! Who knows what the future holds? Five (or fifteen) years from now, a confluence of events (oil prices at $500/bbl?) may push oil production to new records, even if it is just for 30 days. Your prediction will be in the shredder, along with much of your credibility. Even if (hypothetically speaking), broadly speaking you are spot on…

    Comment by Optimist | March 11, 2009

  28. With PHEVs becoming commercialized…
    You mean like pigs are learning to fly?

    Come on Benny, face the facts: PHEVs are so far just a dream. We’re a long way from seeing their effect (if any) on oil demand. Same with the rest of it: Biofuels boom, CTL booms, GTL grows, natural gas vehicles boom, etc.

    Comment by Optimist | March 11, 2009

  29. With PHEVs becoming commercialized…You mean like pigs are learning to fly?Come on Benny, face the facts: PHEVs are so far just a dream. We’re a long way from seeing their effect (if any) on oil demand. Same with the rest of it: Biofuels boom, CTL booms, GTL grows, natural gas vehicles boom, etc.

    Comment by Optimist | March 11, 2009

  30. “Uh, because demand is way down, and storage is filling up?”

    Then explain why Saudi production was dropping while oil prices went through the roof and the world was begging for oil Bill. Did the Saudi’s not want the money then either? We assume the world has 5M barrels of spare capacity. That’s only true if the Saudi’s are being honest about their capability to pump more. If Ghawar goes,there’s not only no spare capacity,but a looming supply crunch instead. I don’t trust Wahhabi’s. They’re good at sneaky stuff….like flying into skyscrapers. Not so good at telling the truth.

    Comment by Maury | March 11, 2009

  31. “Uh, because demand is way down, and storage is filling up?”Then explain why Saudi production was dropping while oil prices went through the roof and the world was begging for oil Bill. Did the Saudi’s not want the money then either? We assume the world has 5M barrels of spare capacity. That’s only true if the Saudi’s are being honest about their capability to pump more. If Ghawar goes,there’s not only no spare capacity,but a looming supply crunch instead. I don’t trust Wahhabi’s. They’re good at sneaky stuff….like flying into skyscrapers. Not so good at telling the truth.

    Comment by Maury | March 11, 2009

  32. Thanks Robert! That’s an interesting point but I am not quite sure how it would work that way. If oil is expensive therefore profitable for Opec et al. then yes they want to sell, more but on the other hand demand is reduced because of such high price (+ economic crisis) so then my question is, who the heck was buying all that extra oil?

    Another (perhaps silly question)- is it possible this extra oil came from storage instead of the ground? I mean this new peak was not that great of a spike was it?

    Comment by Anonymous | March 11, 2009

  33. Thanks Robert! That’s an interesting point but I am not quite sure how it would work that way. If oil is expensive therefore profitable for Opec et al. then yes they want to sell, more but on the other hand demand is reduced because of such high price (+ economic crisis) so then my question is, who the heck was buying all that extra oil? Another (perhaps silly question)- is it possible this extra oil came from storage instead of the ground? I mean this new peak was not that great of a spike was it?

    Comment by Anonymous | March 11, 2009

  34. I think you are spoiling a good write-up with an extremely questionable prediction, RR!

    That’s not really a prediction so much as it just reflects my current thinking based on what’s going on right now with all of the project cancellations. It takes time to bring these projects online, so if demand recovers in 2 or 3 years the production won’t be there.

    So I am not predicting peak within 3 years. There are too many other variables at play be to be able to see it that clearly. If the economy recovered tomorrow and prices went back up, then I think we would continue to climb for a few years. So maybe I would have been better off to leave out that bit, but it’s just a scenario that I can see playing out.

    RR

    Comment by Robert Rapier | March 11, 2009

  35. I think you are spoiling a good write-up with an extremely questionable prediction, RR!That’s not really a prediction so much as it just reflects my current thinking based on what’s going on right now with all of the project cancellations. It takes time to bring these projects online, so if demand recovers in 2 or 3 years the production won’t be there.So I am not predicting peak within 3 years. There are too many other variables at play be to be able to see it that clearly. If the economy recovered tomorrow and prices went back up, then I think we would continue to climb for a few years. So maybe I would have been better off to leave out that bit, but it’s just a scenario that I can see playing out.RR

    Comment by Robert Rapier | March 11, 2009

  36. Optimist:
    Every major auto maker in the world is bringing PHEVs, or even BEVs, to market. I concede that low oil prices will stymie such introductions for several years–but not forever. And these are first-gen efforst. On hybrids, we are seeing the new Priuses are much better than the first-gen.
    If oil ever stays above $100 a barrel for five years in a row (maybe next time). you will see many PHEVs on the road. Each one a dagger pointed at the heart of oil thugland.
    Given the inanities of oil thug and baboon-states, I think they are relegating themselves to backwater status in 20 years.
    The world is going to pass the oil buffoons by.
    You want to cut a deal with Chavez?

    Comment by benny "centipede glut" cole | March 11, 2009

  37. Optimist:Every major auto maker in the world is bringing PHEVs, or even BEVs, to market. I concede that low oil prices will stymie such introductions for several years–but not forever. And these are first-gen efforst. On hybrids, we are seeing the new Priuses are much better than the first-gen. If oil ever stays above $100 a barrel for five years in a row (maybe next time). you will see many PHEVs on the road. Each one a dagger pointed at the heart of oil thugland.Given the inanities of oil thug and baboon-states, I think they are relegating themselves to backwater status in 20 years. The world is going to pass the oil buffoons by. You want to cut a deal with Chavez?

    Comment by benny "centipede glut" cole | March 11, 2009

  38. Another (perhaps silly question)- is it possible this extra oil came from storage instead of the ground? I mean this new peak was not that great of a spike was it?

    But one could make the same argument about 2005.

    As I said, I think the only reason the race was tight is because of the collapse in oil prices. Otherwise, we wouldn’t be discussing the fact that the 2005 peak was barely eclipsed. Production only fell off when oil prices did.

    RR

    Comment by Robert Rapier | March 11, 2009

  39. Another (perhaps silly question)- is it possible this extra oil came from storage instead of the ground? I mean this new peak was not that great of a spike was it?But one could make the same argument about 2005.As I said, I think the only reason the race was tight is because of the collapse in oil prices. Otherwise, we wouldn’t be discussing the fact that the 2005 peak was barely eclipsed. Production only fell off when oil prices did.RR

    Comment by Robert Rapier | March 11, 2009

  40. “Why does BP refer to 82 mbd for global production, and EIA 73.7?”

    In addition to the factors already mentioned, there is "refinery gain on processing". When oil molecules are cracked in processing & hydrogen is added, the density goes down and so the volume goes up.

    Here's an interesting accounting question — when Saudi oil is processed in a European refinery, should the refinery gain be added to Saudi or to European oil production figures? Just one of dozens of ways to distort the perception of the real energy situation.

    The basic situation is that most energy-related figures are approximate; some are merely inaccurate, and some are plain biased. OPEC holds solemn meetings setting production quotas — but OPEC members do not report actual production to OPEC HQ. Not much of a cartel, heh?

    To pass on an unverified (unverifiable?) comment — a well-connected Kuwaiti recently told me he thinks official Saudi oil export figures are understated. Individual princes send tankers along to the terminals to get unofficial uncounted fill-ups.

    We know less than we think we do about energy production & consumption. But we can still be completely sure that windmills & solar cells are not going to drive oil producers out of business. On the other hand, Obama and his buddies just might — and then we can all freeze in the dark together, hoping for change.

    Comment by Kinuachdrach | March 12, 2009

  41. “Why does BP refer to 82 mbd for global production, and EIA 73.7?”In addition to the factors already mentioned, there is "refinery gain on processing". When oil molecules are cracked in processing & hydrogen is added, the density goes down and so the volume goes up.Here's an interesting accounting question — when Saudi oil is processed in a European refinery, should the refinery gain be added to Saudi or to European oil production figures? Just one of dozens of ways to distort the perception of the real energy situation.The basic situation is that most energy-related figures are approximate; some are merely inaccurate, and some are plain biased. OPEC holds solemn meetings setting production quotas — but OPEC members do not report actual production to OPEC HQ. Not much of a cartel, heh?To pass on an unverified (unverifiable?) comment — a well-connected Kuwaiti recently told me he thinks official Saudi oil export figures are understated. Individual princes send tankers along to the terminals to get unofficial uncounted fill-ups.We know less than we think we do about energy production & consumption. But we can still be completely sure that windmills & solar cells are not going to drive oil producers out of business. On the other hand, Obama and his buddies just might — and then we can all freeze in the dark together, hoping for change.

    Comment by Kinuachdrach | March 12, 2009

  42. Every major auto maker in the world is bringing PHEVs, or even BEVs, to market.
    You mean like GM was bringing the EV to market in the late 90s?

    More correctly: Every major auto maker in the world is pretending to be bringing PHEVs to market, because they can’t afford the perception that they aren’t doing something. Just like they are all working on hydrogen cars. Nice for green show-boating. But hardly enough to change the underlying physics.

    If oil ever stays above $100 a barrel for five years in a row (maybe next time). you will see many PHEVs on the road. Each one a dagger pointed at the heart of oil thugland.
    It’s a nice dream, Benny. Nothing more.

    And if oil stays above $100/bbl, that nice Mr. Chavez may agree to buy your house, your job, your state. He might even bail out Uncle Sam, if we’all agree to behave…

    You want to cut a deal with Chavez?
    Not specifically. But since he has oil that we need, it seems both parties continue to deal with each other. Neither can afford to walk away.

    You can hope for change. But there is no reason to expect change, just yet.

    Comment by Optimist | March 12, 2009

  43. Every major auto maker in the world is bringing PHEVs, or even BEVs, to market.You mean like GM was bringing the EV to market in the late 90s?More correctly: Every major auto maker in the world is pretending to be bringing PHEVs to market, because they can’t afford the perception that they aren’t doing something. Just like they are all working on hydrogen cars. Nice for green show-boating. But hardly enough to change the underlying physics.If oil ever stays above $100 a barrel for five years in a row (maybe next time). you will see many PHEVs on the road. Each one a dagger pointed at the heart of oil thugland.It’s a nice dream, Benny. Nothing more.And if oil stays above $100/bbl, that nice Mr. Chavez may agree to buy your house, your job, your state. He might even bail out Uncle Sam, if we’all agree to behave…You want to cut a deal with Chavez?Not specifically. But since he has oil that we need, it seems both parties continue to deal with each other. Neither can afford to walk away.You can hope for change. But there is no reason to expect change, just yet.

    Comment by Optimist | March 12, 2009

  44. Obama is going to kill Big Oil? Yeah, right! Not even a very popular prostitutian is that powerful. Or that stupid.

    Comment by Optimist | March 12, 2009

  45. Obama is going to kill Big Oil? Yeah, right! Not even a very popular prostitutian is that powerful. Or that stupid.

    Comment by Optimist | March 12, 2009

  46. When The Oil Drum asked its readers (a few months ago) when they thought the peak would be, I chose 2008.

    But, wow, a difference of less than 0.05 percent from 2005 to 2008. I’d guess that’s probably within the margin of error for the EIA’s accounting methods. We may never know when the “true” peak was.

    Comment by jagged ben | March 12, 2009

  47. When The Oil Drum asked its readers (a few months ago) when they thought the peak would be, I chose 2008.But, wow, a difference of less than 0.05 percent from 2005 to 2008. I’d guess that’s probably within the margin of error for the EIA’s accounting methods. We may never know when the “true” peak was.

    Comment by jagged ben | March 12, 2009

  48. Correction, about 0.07 percent. Point still stands.

    Comment by jagged ben | March 12, 2009

  49. Correction, about 0.07 percent. Point still stands.

    Comment by jagged ben | March 12, 2009

  50. When people refer to global output of nearly 88 mbd (an even higher figure than BPs’0 what are they including in this number? There is chart today in Peak Oil Debunked, which they say they got from Oil Drum, showing a peak near 88 mbd.

    Optimist; The Ford Fusion is here. And gets great gas mileage. And people say it is a nifty car all around. Maybe the best hybrid going. You can’t say the auto companies never change. But they do need market demand to validate production.

    Comment by benny "centipede glut" cole | March 12, 2009

  51. When people refer to global output of nearly 88 mbd (an even higher figure than BPs’0 what are they including in this number? There is chart today in Peak Oil Debunked, which they say they got from Oil Drum, showing a peak near 88 mbd. Optimist; The Ford Fusion is here. And gets great gas mileage. And people say it is a nifty car all around. Maybe the best hybrid going. You can’t say the auto companies never change. But they do need market demand to validate production.

    Comment by benny "centipede glut" cole | March 12, 2009

  52. I’ve been reading PO.com, TOD, and various other sites for years.

    Well thought out, for the most part.

    But why, oh why, when the data from KSA are so very ambiguous, does anybody try to state anything with any exactitude?

    Think about it. As goes the KSA, so we all go. If KSA can produce 5-8 MBD more over the next 10 years, then the PO point of no return is well off in the distance. If, however, they are already in terminal decline, with Ghawar and other old fields approaching Cantarell-like depletion rates, then it is already game over and by 2015 there will be worldwide panic and expansion of resource wars.

    So tell me. Given that the KSA tells us virtually NOTHING about their fields, why on earth is anybody comfortable making any predictions?

    My opinion on this is simple – the KSA and other PTB have every reason to lie and exaggerate their capacity.

    So, like a man bragging about his female conquests, I can only assume that what is being said is hyperbolic.

    The only question left is, how much is the KSA exaggerating.

    My best guess, and it’s as good as guess as any’s, is A HUGE AMOUNT.

    I think they’re in crisis mode right now.

    If they could have easily ramped up production, they already would have.

    Gideon

    Comment by Anonymous | March 12, 2009

  53. I’ve been reading PO.com, TOD, and various other sites for years.Well thought out, for the most part.But why, oh why, when the data from KSA are so very ambiguous, does anybody try to state anything with any exactitude?Think about it. As goes the KSA, so we all go. If KSA can produce 5-8 MBD more over the next 10 years, then the PO point of no return is well off in the distance. If, however, they are already in terminal decline, with Ghawar and other old fields approaching Cantarell-like depletion rates, then it is already game over and by 2015 there will be worldwide panic and expansion of resource wars.So tell me. Given that the KSA tells us virtually NOTHING about their fields, why on earth is anybody comfortable making any predictions?My opinion on this is simple – the KSA and other PTB have every reason to lie and exaggerate their capacity. So, like a man bragging about his female conquests, I can only assume that what is being said is hyperbolic.The only question left is, how much is the KSA exaggerating.My best guess, and it’s as good as guess as any’s, is A HUGE AMOUNT.I think they’re in crisis mode right now.If they could have easily ramped up production, they already would have. Gideon

    Comment by Anonymous | March 12, 2009

  54. There is no peak. There’s a plateau, with a pimple on its backside.

    Deffeyes was right in that we reached this plateau in 2005.

    RR is right in that the all-time annual average exceeded 2005 by a miniscule percentage.

    The gods must be laughing at us, making mountains out of molehills, before the Great Slide into darkness. How preoccupied we our with our ape contests and chest-thumping.

    Saying what “would” have happened (i.e. an even higher peak) if the economy hadn’t crashed–due in part to high oil prices–is only a tad bit more absurd than trying to pinpoint the exact date of a phenomenon that most observers have acknowledged can only be verified in the rear-view mirror.

    The universe is composed of “is,” not “would.”

    Is the new EIA date something to celebrate, or mourn?

    Comment by Menachem | March 12, 2009

  55. There is no peak. There’s a plateau, with a pimple on its backside.Deffeyes was right in that we reached this plateau in 2005.RR is right in that the all-time annual average exceeded 2005 by a miniscule percentage.The gods must be laughing at us, making mountains out of molehills, before the Great Slide into darkness. How preoccupied we our with our ape contests and chest-thumping.Saying what “would” have happened (i.e. an even higher peak) if the economy hadn’t crashed–due in part to high oil prices–is only a tad bit more absurd than trying to pinpoint the exact date of a phenomenon that most observers have acknowledged can only be verified in the rear-view mirror.The universe is composed of “is,” not “would.”Is the new EIA date something to celebrate, or mourn?

    Comment by Menachem | March 12, 2009

  56. Deffeyes was right in that we reached this plateau in 2005.

    That’s a far cry from what Deffeyes actually said. And that’s what I have a problem with. Go back to the archives at TOD and see some of the dire predictions following the ‘2005 peak.’ There was a Nosedive in the Desert that never happened. There were people making predictions of a huge fall-off from the 2005 peak. The plateau theory didn’t start to become popular until it became clear in 2006 and 2007 that this steep fall was not taking place.

    Saying what “would” have happened (i.e. an even higher peak) if the economy hadn’t crashed–due in part to high oil prices–is only a tad bit more absurd…

    Not at all, when production clearly fell when prices fell. It doesn’t take a genius to recognize that some production was dialed back because it no longer made sense at lower prices. Thus, I don’t think there is any doubt that the record would have been much higher had the demand been there (keeping prices high).

    Is the new EIA date something to celebrate, or mourn?

    It is neither. It is what it is. But what it should be is a lesson in making dead certain predictions based on incomplete data. What I have found, though, is that it just tests the rationalizing skills of those who made the wrong peak call. They will say “but, but, but….” What they won’t say is “Maybe I don’t know what the future holds with certainty.”

    RR

    Comment by Robert Rapier | March 12, 2009

  57. Deffeyes was right in that we reached this plateau in 2005.That’s a far cry from what Deffeyes actually said. And that’s what I have a problem with. Go back to the archives at TOD and see some of the dire predictions following the ‘2005 peak.’ There was a Nosedive in the Desert that never happened. There were people making predictions of a huge fall-off from the 2005 peak. The plateau theory didn’t start to become popular until it became clear in 2006 and 2007 that this steep fall was not taking place.Saying what “would” have happened (i.e. an even higher peak) if the economy hadn’t crashed–due in part to high oil prices–is only a tad bit more absurd…Not at all, when production clearly fell when prices fell. It doesn’t take a genius to recognize that some production was dialed back because it no longer made sense at lower prices. Thus, I don’t think there is any doubt that the record would have been much higher had the demand been there (keeping prices high).Is the new EIA date something to celebrate, or mourn?It is neither. It is what it is. But what it should be is a lesson in making dead certain predictions based on incomplete data. What I have found, though, is that it just tests the rationalizing skills of those who made the wrong peak call. They will say “but, but, but….” What they won’t say is “Maybe I don’t know what the future holds with certainty.”RR

    Comment by Robert Rapier | March 12, 2009

  58. But why, oh why, when the data from KSA are so very ambiguous, does anybody try to state anything with any exactitude?

    That’s been more or less my point since 2005, when a lot of people began to state peak with exactitude.

    If they could have easily ramped up production, they already would have.

    As prices rise, you bring on more marginal prospects. But it isn’t like turning on a switch. People don’t seem to understand that. New projects can take 5-10 years to come online, and 5 years ago oil companies were still basing projects on an assumption of $30 oil.

    RR

    Comment by Robert Rapier | March 12, 2009

  59. But why, oh why, when the data from KSA are so very ambiguous, does anybody try to state anything with any exactitude?That’s been more or less my point since 2005, when a lot of people began to state peak with exactitude.If they could have easily ramped up production, they already would have.As prices rise, you bring on more marginal prospects. But it isn’t like turning on a switch. People don’t seem to understand that. New projects can take 5-10 years to come online, and 5 years ago oil companies were still basing projects on an assumption of $30 oil.RR

    Comment by Robert Rapier | March 12, 2009

  60. “You’ve got to wonder why Saudi production was declining while oil prices were tripling.”

    Maury, I looked at the MEES site. Saudi Arabia began 2007 at 8.7 mmbopd. The January 2008 figure was 9.22 mmbopd. The Saudis peaked at 9.7 mmbopd in July, the same month when oil prices peaked.

    So Saudi Arabia’s production climbed by 11% during the 2007-2008 price surge. The same source shows an 8% increase in OPEC 10 production over the same period.

    Where do you get your information that Saudi production was declining while oil prices rose?

    Comment by armchair261 | March 12, 2009

  61. “You’ve got to wonder why Saudi production was declining while oil prices were tripling.”Maury, I looked at the MEES site. Saudi Arabia began 2007 at 8.7 mmbopd. The January 2008 figure was 9.22 mmbopd. The Saudis peaked at 9.7 mmbopd in July, the same month when oil prices peaked. So Saudi Arabia’s production climbed by 11% during the 2007-2008 price surge. The same source shows an 8% increase in OPEC 10 production over the same period.Where do you get your information that Saudi production was declining while oil prices rose?

    Comment by armchair261 | March 12, 2009

  62. Hi. I think this chart illustrates what everyone is getting their panties twisted in a knot over:

    http://www.theoildrum.com/files/crude_oil_oilwatch_feb_1.png

    One can look at that flattish line for oneself and decide whether Deffeyes, et al., are cranks or prophets.

    For what it’s worth, my belief is that oil production could not have exceeded its max in the period 2005-2008 for the simple reason that the breaking point in price had been reached. With the easy oil diminishing, the difficult oil is simply not economically feasible.

    2008 brought the greatest oil price spike in history–right on the heels of that inflection in production. And the economy is now crashing, just as “the wackos” said it would. And suburbia is becoming abandoned, just as Kunstler, et al., said it would. And credit is being destroyed, just as Colin Campbell said it would.

    My fear of what would happen at peak oil is coming true: “the market” is going to delegate who gets the rest of the oil, not human reason.

    Comment by MikeB | March 12, 2009

  63. Hi. I think this chart illustrates what everyone is getting their panties twisted in a knot over:http://www.theoildrum.com/files/crude_oil_oilwatch_feb_1.pngOne can look at that flattish line for oneself and decide whether Deffeyes, et al., are cranks or prophets.For what it’s worth, my belief is that oil production could not have exceeded its max in the period 2005-2008 for the simple reason that the breaking point in price had been reached. With the easy oil diminishing, the difficult oil is simply not economically feasible.2008 brought the greatest oil price spike in history–right on the heels of that inflection in production. And the economy is now crashing, just as “the wackos” said it would. And suburbia is becoming abandoned, just as Kunstler, et al., said it would. And credit is being destroyed, just as Colin Campbell said it would.My fear of what would happen at peak oil is coming true: “the market” is going to delegate who gets the rest of the oil, not human reason.

    Comment by MikeB | March 12, 2009

  64. One can look at that flattish line for oneself and decide whether Deffeyes, et al., are cranks or prophets.

    Mike, if you extend that graph back in time, you will see multiple periods like the one you highlighted. So that argument fails the historical test: What we saw during that time period has been seen before, but it didn’t mean oil had peaked.

    RR

    Comment by Robert Rapier | March 12, 2009

  65. One can look at that flattish line for oneself and decide whether Deffeyes, et al., are cranks or prophets.

    Mike, if you extend that graph back in time, you will see multiple periods like the one you highlighted. So that argument fails the historical test: What we saw during that time period has been seen before, but it didn’t mean oil had peaked.

    RR

    Comment by Robert Rapier | March 12, 2009

  66. One can look at that flattish line for oneself and decide whether Deffeyes, et al., are cranks or prophets.Mike, if you extend that graph back in time, you will see multiple periods like the one you highlighted. So that argument fails the historical test: What we saw during that time period has been seen before, but it didn’t mean oil had peaked.RR

    Comment by Robert Rapier | March 12, 2009

  67. The Ford Fusion is here. And gets great gas mileage. And people say it is a nifty car all around. Maybe the best hybrid going. You can’t say the auto companies never change. But they do need market demand to validate production.
    Yip. It’s a hybrid. Took Ford about 10 years since the debut of hybrids in this country. And hybrids still account for only 2 – 3% of new vehicle sales.

    So let’s crunch some numbers: Let’s say a hybrid uses 20% less fuel than an equivalent vehicle (I know that’s generous, but in some cases people are actually down-sizing to buy the hybrid). Of the vehicles on the road hybrids probably account for a maximum of 1%. Multiply and voila, hybrids have saved us 0.2% of oil consumption. No wonder Uncle Hugo is getting nervous.

    Now you might argue that PHEV is going to save much more than 20%. I’d point out that there is not a single PHEV at any dealership right now, and that the $40,000 price tag that keeps coming up would suggest sales at far below the 2-3% that hybrids have achieved so far.

    So all the FACTS seem to suggest negligible reduction in oil consumption.

    What? You have any facts, Mr. Cole? [Crickets chirping]

    Comment by Optimist | March 12, 2009

  68. The Ford Fusion is here. And gets great gas mileage. And people say it is a nifty car all around. Maybe the best hybrid going. You can’t say the auto companies never change. But they do need market demand to validate production.Yip. It’s a hybrid. Took Ford about 10 years since the debut of hybrids in this country. And hybrids still account for only 2 – 3% of new vehicle sales.So let’s crunch some numbers: Let’s say a hybrid uses 20% less fuel than an equivalent vehicle (I know that’s generous, but in some cases people are actually down-sizing to buy the hybrid). Of the vehicles on the road hybrids probably account for a maximum of 1%. Multiply and voila, hybrids have saved us 0.2% of oil consumption. No wonder Uncle Hugo is getting nervous.Now you might argue that PHEV is going to save much more than 20%. I’d point out that there is not a single PHEV at any dealership right now, and that the $40,000 price tag that keeps coming up would suggest sales at far below the 2-3% that hybrids have achieved so far.So all the FACTS seem to suggest negligible reduction in oil consumption.What? You have any facts, Mr. Cole? [Crickets chirping]

    Comment by Optimist | March 12, 2009

  69. Thanks for responding, Robert.

    I’m aware of the fluctuations you mention. But were they within Hubbert’s and the host of other analysts’ predicted ranges? And did such inflections happen in the midst of rampant demand as in 2004-2007? And were they accompanied by mega-price-spikes such as the one in 2007-2008?

    I see your point, of course. I’m looking at “preponderance of evidence.” My geology prof. from years ago cannot bring himself to speak publicly of this issue anymore, he is so disheartened that no one listened to the warnings he issued back in the 90s about this very crisis.

    In any case, given the current (apparent) effects of peak, I’m glad I started preparing years ago.

    Comment by MikeB | March 12, 2009

  70. Thanks for responding, Robert.I’m aware of the fluctuations you mention. But were they within Hubbert’s and the host of other analysts’ predicted ranges? And did such inflections happen in the midst of rampant demand as in 2004-2007? And were they accompanied by mega-price-spikes such as the one in 2007-2008?I see your point, of course. I’m looking at “preponderance of evidence.” My geology prof. from years ago cannot bring himself to speak publicly of this issue anymore, he is so disheartened that no one listened to the warnings he issued back in the 90s about this very crisis.In any case, given the current (apparent) effects of peak, I’m glad I started preparing years ago.

    Comment by MikeB | March 12, 2009

  71. Why is the prof so disheartened? Does he expect the world to listen to profs? He is a prof, not a president! And it is not as if the profs never get anything wrong, anyway.

    At this point, with oil @ ~$40/bbl, the obvious question is (still): What crisis?

    With oil at this level, any “wise” government that spent $billions or $trillions (post bailout) on alternatives fuels would be rightly critized for wasting $tax. In spite of all the dire predictions, oil may stay below $100/bbl for years to come. Especially as this bailout BS cripples the economy for the next decade or so.

    Look, it’s a broken world. We’re going to need a sustained price of $150/bbl and beyond before we find serious alternatives. That’s just the nature of man, capitalism, politics, etc.

    Comment by Optimist | March 12, 2009

  72. Why is the prof so disheartened? Does he expect the world to listen to profs? He is a prof, not a president! And it is not as if the profs never get anything wrong, anyway.

    At this point, with oil @ ~$40/bbl, the obvious question is (still): What crisis?

    With oil at this level, any “wise” government that spent $billions or $trillions (post bailout) on alternatives fuels would be rightly critized for wasting $tax. In spite of all the dire predictions, oil may stay below $100/bbl for years to come. Especially as this bailout BS cripples the economy for the next decade or so.

    Look, it’s a broken world. We’re going to need a sustained price of $150/bbl and beyond before we find serious alternatives. That’s just the nature of man, capitalism, politics, etc.

    Comment by Optimist | March 12, 2009

  73. Why is the prof so disheartened? Does he expect the world to listen to profs? He is a prof, not a president! And it is not as if the profs never get anything wrong, anyway.At this point, with oil @ ~$40/bbl, the obvious question is (still): What crisis?With oil at this level, any “wise” government that spent $billions or $trillions (post bailout) on alternatives fuels would be rightly critized for wasting $tax. In spite of all the dire predictions, oil may stay below $100/bbl for years to come. Especially as this bailout BS cripples the economy for the next decade or so.Look, it’s a broken world. We’re going to need a sustained price of $150/bbl and beyond before we find serious alternatives. That’s just the nature of man, capitalism, politics, etc.

    Comment by Optimist | March 12, 2009

  74. At this point, with oil @ ~$40/bbl, the obvious question is (still): What crisis?

    I’m tempted to say, “You’re kidding, right?” but I understand you’re not (unless I’m not catching the irony.)

    1. Price is currently in the 40s because demand was slapped down. Hard. By prices that neared $150.

    2. If I understand things correctly, that 40s price means “mitigating” projects, ones that would theoretically “grow” production, are no longer viable. Hence, a steeper slide down the back of Hubbert’s peak.

    3. Things Are Falling Apart, and rapidly. I feel lucky to have a job right now, and my fate in 2010 is still up in the air.

    4. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.

    The expensive oil predicted to come online on the downslope of the peak is not as viable as we thought. It might not be viable at all. Perhaps the “price mechanism” is broken. Perhaps it was a myth to begin with, one of those illusions fostered by cheap, abundant energy.

    I have no idea what this will lead to.

    Comment by Mike, Redux | March 12, 2009

  75. At this point, with oil @ ~$40/bbl, the obvious question is (still): What crisis?

    I’m tempted to say, “You’re kidding, right?” but I understand you’re not (unless I’m not catching the irony.)

    1. Price is currently in the 40s because demand was slapped down. Hard. By prices that neared $150.

    2. If I understand things correctly, that 40s price means “mitigating” projects, ones that would theoretically “grow” production, are no longer viable. Hence, a steeper slide down the back of Hubbert’s peak.

    3. Things Are Falling Apart, and rapidly. I feel lucky to have a job right now, and my fate in 2010 is still up in the air.

    4. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.

    The expensive oil predicted to come online on the downslope of the peak is not as viable as we thought. It might not be viable at all. Perhaps the “price mechanism” is broken. Perhaps it was a myth to begin with, one of those illusions fostered by cheap, abundant energy.

    I have no idea what this will lead to.

    Comment by Mike, Redux | March 12, 2009

  76. At this point, with oil @ ~$40/bbl, the obvious question is (still): What crisis?I’m tempted to say, “You’re kidding, right?” but I understand you’re not (unless I’m not catching the irony.)1. Price is currently in the 40s because demand was slapped down. Hard. By prices that neared $150.2. If I understand things correctly, that 40s price means “mitigating” projects, ones that would theoretically “grow” production, are no longer viable. Hence, a steeper slide down the back of Hubbert’s peak.3. Things Are Falling Apart, and rapidly. I feel lucky to have a job right now, and my fate in 2010 is still up in the air.4. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.The expensive oil predicted to come online on the downslope of the peak is not as viable as we thought. It might not be viable at all. Perhaps the “price mechanism” is broken. Perhaps it was a myth to begin with, one of those illusions fostered by cheap, abundant energy.I have no idea what this will lead to.

    Comment by Mike, Redux | March 12, 2009

  77. Oh, by the way.

    That professor is no slouch.

    This is an article he published awhile back:

    http://www.oilfield.com/forcast.html

    He also published in Nature magazine, but that is not online.

    His grand finale before retiring was a talk to some important folks at Gordon Research Conferences.

    My understanding is that he is of the “we need to prepare well in advance for this thing” crowd, a very sensible position, but upon his retirement, he saw things going rapidly in the wrong direction–and simply lapsed into an, I think, dignified silence.

    Comment by Mike, Redux | March 12, 2009

  78. Oh, by the way.

    That professor is no slouch.

    This is an article he published awhile back:

    http://www.oilfield.com/forcast.html

    He also published in Nature magazine, but that is not online.

    His grand finale before retiring was a talk to some important folks at Gordon Research Conferences.

    My understanding is that he is of the “we need to prepare well in advance for this thing” crowd, a very sensible position, but upon his retirement, he saw things going rapidly in the wrong direction–and simply lapsed into an, I think, dignified silence.

    Comment by Mike, Redux | March 12, 2009

  79. Oh, by the way.That professor is no slouch.This is an article he published awhile back:http://www.oilfield.com/forcast.htmlHe also published in Nature magazine, but that is not online.His grand finale before retiring was a talk to some important folks at Gordon Research Conferences.My understanding is that he is of the “we need to prepare well in advance for this thing” crowd, a very sensible position, but upon his retirement, he saw things going rapidly in the wrong direction–and simply lapsed into an, I think, dignified silence.

    Comment by Mike, Redux | March 12, 2009

  80. RR – Thank you for the reply.

    I do understand that oil is not simply switched on.

    But here’s where I believe psychology trumps science, where science offers no view:

    In order to believe that the KSA CAN increase oil production substantially, then I’d have to believe the following:

    During the fairly steady ramp up in prices from ’04 to ’08, KSA production was flat or slightly dropping, and the KSA chose not to ramp up production to take advantage of the price increase by pumping more. By 07/08, each extra unit pumped was yielding 4 or more times the revenue than the same unit in 2002.

    While it may take 4 or 5 years to bring brand new projects on line, certainly the KSA had options to bring substantial oil on line during that period.

    So it comes down to this:

    1. They didn’t have the capacity, in which case my bet is they’re in distress.
    OR
    2. They did have the capacity, but they didn’t want to make a whole bunch more money at the inflated prices because, instead, they wanted to save the oil for later for one or more reasons.

    To me, #2 is psychologically near impossible, so I go with 1, without a lick of data to support my belief.

    Comment by Anonymous | March 13, 2009

  81. RR – Thank you for the reply.I do understand that oil is not simply switched on. But here’s where I believe psychology trumps science, where science offers no view:In order to believe that the KSA CAN increase oil production substantially, then I’d have to believe the following:During the fairly steady ramp up in prices from ’04 to ’08, KSA production was flat or slightly dropping, and the KSA chose not to ramp up production to take advantage of the price increase by pumping more. By 07/08, each extra unit pumped was yielding 4 or more times the revenue than the same unit in 2002. While it may take 4 or 5 years to bring brand new projects on line, certainly the KSA had options to bring substantial oil on line during that period.So it comes down to this:1. They didn’t have the capacity, in which case my bet is they’re in distress.OR2. They did have the capacity, but they didn’t want to make a whole bunch more money at the inflated prices because, instead, they wanted to save the oil for later for one or more reasons.To me, #2 is psychologically near impossible, so I go with 1, without a lick of data to support my belief.

    Comment by Anonymous | March 13, 2009

  82. During the fairly steady ramp up in prices from ’04 to ’08, KSA production was flat or slightly dropping,

    There are two problems with your argument. First, production at the beginning of 2004 was 8.7 mbpd. They increased that during 2004 to 9.5 mbpd and held it in that region for almost 2 years. During that time, price were rising, which will impact demand. Saudi does not sell on the spot market, so their customers have to demand more. In fact, OECD inventories were rising. So when Saudi cut, they cited rising inventories as a reason.

    So, you left off in your reasoning this: Saudi was looking ahead at rising inventories and trying to avoid a glut. I think that’s exactly what they were doing, and is certainly consistent with what has happened since then.

    RR

    Comment by Robert Rapier | March 13, 2009

  83. During the fairly steady ramp up in prices from ’04 to ’08, KSA production was flat or slightly dropping,There are two problems with your argument. First, production at the beginning of 2004 was 8.7 mbpd. They increased that during 2004 to 9.5 mbpd and held it in that region for almost 2 years. During that time, price were rising, which will impact demand. Saudi does not sell on the spot market, so their customers have to demand more. In fact, OECD inventories were rising. So when Saudi cut, they cited rising inventories as a reason.So, you left off in your reasoning this: Saudi was looking ahead at rising inventories and trying to avoid a glut. I think that’s exactly what they were doing, and is certainly consistent with what has happened since then.RR

    Comment by Robert Rapier | March 13, 2009

  84. Mike,
    I beg to differ, again:
    1. Price is currently in the 40s because demand was slapped down. Hard. By prices that neared $150.
    Take a deep breath. Take a step back. The world is not dominated by energy. While energy is important, it is not the all determining hand in everything, though it can sometimes seem that way.

    This recession came about because the ridiculously inflated housing bubble finally burst (Thanks in part to Mr. Froth, Alan Greenspan). High energy prices was a mosquito on the elephant’s back.

    We don’t know if a strong economy can function well at $150/bbl and beyond. We’ll find out, eventually…

    2. If I understand things correctly, that 40s price means “mitigating” projects, ones that would theoretically “grow” production, are no longer viable. Hence, a steeper slide down the back of Hubbert’s peak.
    You are right, in the short to medium term this is indeed troubling. In the long term these projects will come back, as oil goes back up again.

    3. Things Are Falling Apart, and rapidly. I feel lucky to have a job right now, and my fate in 2010 is still up in the air.
    That much is true. Again, I don’t see energy causing much of this.

    Also, I find it very disheartening that no prostitution has the guts to level with the people, encourage them to save and get to the recovery the old fashioned way: hard work.

    Seems to me the bailout is an attempt to get us to repeat the worst of our recent mistakes. And that will solve the problem how?

    Or is the priority that we grunts take on a lifetime’s worth of debt so that Mr. CEO-PD (Political Donor) can enjoy the 8-figure income he so richly deserves?

    4. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.
    Oh, they can afford it – though many will choose to use less at that price.

    Perhaps the “price mechanism” is broken.
    The only people who can break it is our dearly elected prostitutions. But free markets have a way of finding their way around these idiots.

    That professor is no slouch.
    Look, the guy could be Albert Einstein for all I know. That still soesn’t mean that he can predict the future.

    Comment by Optimist | March 13, 2009

  85. Mike,
    I beg to differ, again:
    1. Price is currently in the 40s because demand was slapped down. Hard. By prices that neared $150.
    Take a deep breath. Take a step back. The world is not dominated by energy. While energy is important, it is not the all determining hand in everything, though it can sometimes seem that way.

    This recession came about because the ridiculously inflated housing bubble finally burst (Thanks in part to Mr. Froth, Alan Greenspan). High energy prices was a mosquito on the elephant’s back.

    We don’t know if a strong economy can function well at $150/bbl and beyond. We’ll find out, eventually…

    2. If I understand things correctly, that 40s price means “mitigating” projects, ones that would theoretically “grow” production, are no longer viable. Hence, a steeper slide down the back of Hubbert’s peak.
    You are right, in the short to medium term this is indeed troubling. In the long term these projects will come back, as oil goes back up again.

    3. Things Are Falling Apart, and rapidly. I feel lucky to have a job right now, and my fate in 2010 is still up in the air.
    That much is true. Again, I don’t see energy causing much of this.

    Also, I find it very disheartening that no prostitution has the guts to level with the people, encourage them to save and get to the recovery the old fashioned way: hard work.

    Seems to me the bailout is an attempt to get us to repeat the worst of our recent mistakes. And that will solve the problem how?

    Or is the priority that we grunts take on a lifetime’s worth of debt so that Mr. CEO-PD (Political Donor) can enjoy the 8-figure income he so richly deserves?

    4. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.
    Oh, they can afford it – though many will choose to use less at that price.

    Perhaps the “price mechanism” is broken.
    The only people who can break it is our dearly elected prostitutions. But free markets have a way of finding their way around these idiots.

    That professor is no slouch.
    Look, the guy could be Albert Einstein for all I know. That still soesn’t mean that he can predict the future.

    Comment by Optimist | March 13, 2009

  86. Mike,I beg to differ, again:1. Price is currently in the 40s because demand was slapped down. Hard. By prices that neared $150.Take a deep breath. Take a step back. The world is not dominated by energy. While energy is important, it is not the all determining hand in everything, though it can sometimes seem that way.This recession came about because the ridiculously inflated housing bubble finally burst (Thanks in part to Mr. Froth, Alan Greenspan). High energy prices was a mosquito on the elephant’s back.We don’t know if a strong economy can function well at $150/bbl and beyond. We’ll find out, eventually…2. If I understand things correctly, that 40s price means “mitigating” projects, ones that would theoretically “grow” production, are no longer viable. Hence, a steeper slide down the back of Hubbert’s peak.You are right, in the short to medium term this is indeed troubling. In the long term these projects will come back, as oil goes back up again.3. Things Are Falling Apart, and rapidly. I feel lucky to have a job right now, and my fate in 2010 is still up in the air.That much is true. Again, I don’t see energy causing much of this.Also, I find it very disheartening that no prostitution has the guts to level with the people, encourage them to save and get to the recovery the old fashioned way: hard work.Seems to me the bailout is an attempt to get us to repeat the worst of our recent mistakes. And that will solve the problem how?Or is the priority that we grunts take on a lifetime’s worth of debt so that Mr. CEO-PD (Political Donor) can enjoy the 8-figure income he so richly deserves?4. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.Oh, they can afford it – though many will choose to use less at that price.Perhaps the “price mechanism” is broken.The only people who can break it is our dearly elected prostitutions. But free markets have a way of finding their way around these idiots.That professor is no slouch.Look, the guy could be Albert Einstein for all I know. That still soesn’t mean that he can predict the future.

    Comment by Optimist | March 13, 2009

  87. From the perspective of the US, Europe, and Japan, the real question is not how much was produced, but how much was available for import. Did total exports also reach a new peak in 2008?

    Comment by Michael Cain | March 15, 2009

  88. From the perspective of the US, Europe, and Japan, the real question is not how much was produced, but how much was available for import. Did total exports also reach a new peak in 2008?

    Comment by Michael Cain | March 15, 2009

  89. From the perspective of the US, Europe, and Japan, the real question is not how much was produced, but how much was available for import. Did total exports also reach a new peak in 2008?

    Comment by Michael Cain | March 15, 2009

  90. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.
    Oh, they can afford it – though many will choose to use less at that price.

    —- While you raise a good point it will make the business cycle more pro cyclical, creating huge issues with inflation and unemployment

    —– What is your opinion on China in the future??? Chances are even byitself it may suck up all the oil.

    Comment by ENCE | March 26, 2009

  91. I used to think Simmons was right about his $200/barrel oil prediction. Now I seriously doubt it. We’ve just been shown, starkly, what we can afford. People can’t afford $147/barrel oil. Demand will get slapped again if prices even approach $150.Oh, they can afford it – though many will choose to use less at that price.—- While you raise a good point it will make the business cycle more pro cyclical, creating huge issues with inflation and unemployment—– What is your opinion on China in the future??? Chances are even byitself it may suck up all the oil.

    Comment by ENCE | March 26, 2009


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