Matt Simmons' Latest - Another Nail In The Coffin Of The Case Against Peak Oil

EDIT

The best of the world’s “raw numbers” on global crude oil production still comes from the U.S. DOE/EIA. Eighteen months ago, I began looking closely at the EIA’s global crude oil and condensate production report summarized in the EIA’s Monthly Energy Report (Table 11.1b) as it showed a peak in crude oil production in 2005. For almost a year, minor adjustments to the 2005 data were made. Over time, however, the facts point to the glaring and inconvenient reality that the May
3 2005 crude production represented an all-time high, even though it barely exceeded 74 million barrels a day – 74,298,000/day according to the EIA. April, May and December 2005 were the first three months in the 150-year history of oil when the world ever produced this much oil. In July 2006, global crude once more inched above the 74 million barrel a day high-water mark. No other monthly report before or since shows oil produced at or above the 74 million barrel per day mark.

As months passed, the EIA revisions ended through 2006 data. As we near the end of 2007, May 2005 is still the magical “moment in time” when global crude oil peaked at 74.3 million barrels a day. Some miracle series of new oil fields could suddenly be found and quickly brought on to production, but the more time that passes, the less likely this is.

In the meantime, world petroleum demand continues to grow and is projected to near or even top 88 million barrels per day over the next several months. In order to fill the gap between declining crude supply and growing total petroleum use, a number of non-sustainable oil sources are being tapped. Topping the list are natural gas liquids coming primarily from maturing oil fields. As reservoir pressures decline, these giant fields create gas caps. This wet gas needs to be processed but ends up as one of the highest value added fossil fuels.

No one, however, has ever suggested the world could suddenly satisfy its insatiable petroleum demand through a steady growth in natural gas liquids. Hydrocarbon Processing Gains, the remarkable alchemy of inputting a barrel of crude into a refinery and getting more than a barrel of finished oil at the exiting end of the refinery gate is a secondary source of how we fill the crude to total petroleum gap. However, this is finite because as refineries age and few new ones get built, this source could start to shrink. Bio-fuels, synthetic oil, alcohol, et al, represent the final sliver in meeting the “gap” between petroleum use and crude oil produced. Slivers are hard to grow, however, in a world expecting to use one or two million additional barrels of oil a day more than the preceding year.

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http://www.simmonsco-intl.com/files/Another%20Nail%20in%20the%20Coffin.pdf

It's going to get ugly when the music stops...