An interesting pair of graphs of liquid energy production from The Oil Drum

In the TOD article World Oil Supplies as Reported in EIA’s most recent International Energy Statistics author Rune Likvern presents a breakdown of current and historical oil production in different parts of the world. He also reports the world's total production for the last 10 years:



Now, in a typical graph like this there is always a certain amount of "apples and oranges" comparison. It lumps together the simple volumes of various "oil-like" products, each of which contains a different amount of energy per barrel. While this tells you the total volume of liquid fuel production, it doesn't give an accurate picture of the total energy. You need to know that in order to determine how much energy-driven stuff our civilization can actually do.

In order to get a better estimate of the energy we're producing/consuming, Likvern reworked the data to give a more accurate picture of the actual amount of energy we're producing in the form of liquid fuels. This rework takes into account the different energy densities of such things as NGL and various biofuels, and doesn't double count the category of "refinery gains" that are just a volumetric expansion that doesn't produce any additional energy.

Here's the adjusted graph:



I have a couple of issues with these two graphs, not least the fact that one is zero-scaled and the other is not. However, a couple of things are quite clear. The first is the obvious plateau in crude oil production since mid-2004. The second is that the other forms of liquid energy (including NGL) haven't made much headway in supplementing crude oil over that same period. On an energy-adjusted basis they have added the equivalent of just 1 mbpd over the last 6 years, for an average gain of 0.2% per year.

And a couple of other notes:

Likvern comments that the EIA is currently projecting world consumption of 89 mbpd for the second half of this year. Even in the most generous assessment we are currently 2.5 mbpd short of that supply. With Libya still off-line this gap may be hard to close. In light of that shortfall, consider the price line for Brent Crude in the first graph. We are already heading back into "all-time-high" territory. Given the expected supply shortfall over the next six months the price has nowhere to go but up.

I'm convinced that the 2008 crash was triggered by the impact of $130 oil on a world economy that was structurally unstable. We have not fixed that instability, and recent events in Europe hint that the world economy may have even gotten somewhat more unstable in the last 3 years. And here comes another oil price spike.

Hold onto your hats.

that world economic growth is now being capped by oil supply. If the prediction holds, we should see the nascent "recovery" (such as it is) nuked by another oil price spike.

I've been skeptical about that alt.energy buildout for at least the last 5 years. There will be no need for it in a world dominated by cycling economic recessions - especially given the sunk costs of coal.

"cycling economic recessions" brought on by energy price volatility is an extremely strong economic motivator to replace those volatile energy sources with sources providing greater price stability. The case of natural gas prices pre-fracking and justifications as voiced by utilities and state regulatores supporting wind and solar development serves to demonstrate that point conclusively.

We have no way of replacing any significant fraction of the oil used in transportation by much of anything else over the next 10 years. We will see a few EVs, some more trains, and a few more CNG vehicles.

I keep remembering Robert Hirsh's assessment in his 2005 report:


We're 7 years past the beginning of the peak now. If Hirsch was right, we're looking at a very tough couple of decades.

So you've mistakenly dismissed the proof.

You say that "we have no way of replacing any significant fraction of the oil used in transportation" in the next ten years. That is a very poorly constructed thought, if you'll forgive my saying so.

Why is 10 years the benchmark?

What is the quantification attached to "significant" in real terms related to marginal production and costs?

Presuming your pessimism related to petroleum supply v demand were to prove true, why will natural gas NOT be a quick means of taking pressure off the margins for a decade or two?

Why are you so sure that EVs wouldn't ramp up far more quickly if strong price pressure were to make them more economically attractive than a fossil fueled ICE?

In short, I can't say I'm convinced you've given this topic any real thought. What I read from you reminds me more of a catechism from the Church of Peak OIl than an informed, objective analysis.

Some conversations are less likely than others to prove productive.

Catch you next time.

You didn't address the point due to apparent confusion in the first post, and now you have elected to not address it as a matter of personal preference. That is too bad since the issue was so clearly parallel to what happened when natural gas price volatility provided a huge driver for spending on renewables that worked in the market niche served by natgas at the time.

It seems such a shame to waste the learning opportunity.

And while I greatly admire your eagerness to learn, I'm afraid that any teaching I might have attempted would have been counterproductive given the resistance you displayed in the request. I'll wait for a better attitude on the part of the student - we'll have a lot more fun then.

The claims are, in fact, directly refuted by virtually everything we know about the resources/technologies involved and the economic behavior governing the events you are attempting to predict.

The proper approach to assessing future possible events centers around accurately assessing the various uses for petroleum and the characteristics of petroleum that are essential to those uses. Such an effort would show that mid and long term most of the problem is addressed with efficiency improvements; while during the transitional phase a combination of stopgap alternatives will be presenting themselves as the economics of petroleum supply/demand drives the price higher or causes disruptive volatility.

Class dismissed.

with someone who cares what you think.

I believe I've accurately identified your perspective as one where you recognize when you are being called on presenting false information and you wish to avoid it if possible.

Nothing personal.

You've tried to psychoanalyze me before, kris. You foundered on the rocks of self-absorption then too. You have not the first clue about my motivations, because as far as I can tell you're trying to discern them by squinting through the filter of your own motives. That approach is full of fail.

If I decline to engage with you, why not write it off and move on, as I've done for you at least once in the past. That helps preserve civility in the discourse, unlike this unseemly carping.

You misrepresented my intial reply and subsequently tried to turn it personal when that didn't work to avoid dealing with the topic. You have persisted in trying to move this into a personal confrontation.

Just deal with the information and "move on" as you like to say.

His next step is to demand that the admins put both you & him
on "mutual" ignore so that he has a clear field to continue to
spam, slander & smear anyone who disagrees with his opinions.

:hi:

The good side of that is that I'm now spared the endless re-posts
of the Davis-Besse photos, the tired MZJ spam and the pointless
duplicates & self-kicks.

The bad side is that I miss out on a few useful threads.
C'est la vie.

:shrug:

You're right to point out the scale of that second graph. It's a dishonest way to present the data (and it almost certainly must have been intentional). But you don't need the second graph in order to see that there hasn't been a plateau since 2004, since the crude production is the bottom bar of the first graph. There hasn't been much growth, but the folks at TOD who claimed that 2005 was the peak were clearly wrong.

But my real disagreements are that even if there is a plateau, you can't tell from the graph whether it's a supply plateau or a demand plateau (such plateaus have occured in the past yet weren't "peaks"), and...

"it doesn't give an accurate picture of the total energy. You need to know that in order to determine how much energy-driven stuff our civilization can actually do"

This presumes that energy is all that we use oil (and related HCs) for.

There was clearly a better case for a "peak plateau" than for a single peak date, and this what we entered around 2005. The insistence on forcing advocates to pinpoint a single date is only useful to deniers. The C&C plateau has been wobbling up and down by +/- 2% or so for the last 7 years. We hit it in mid 2004 and we haven't rolled off it yet.

To me the one thing that argues against it being a demand-driven plateau is the lack of supply response in face of the price gyrations since 2006.

makes the point that just looking at the raw production figures doesn't account for net energy produced. As the process of extraction becomes more difficult, the net energy, EROEI, declines, because of the increasing energy inputs reguired to get the stuff out and process it; tar sands or deep water drilling, for example.

http://www.eia.gov/emeu/aer/txt/ptb0115.html

So, to a first approximation, yes, energy is all we use oil for. Natural gas is also used to make fertilizer and plastic, but oil is pretty much all burned for energy.

Further to pscot's comment above: the EROI considerations aren't mentioned in the OP, but are significant. It's not clear exactly how much of the world's gross oil production is used in the oil industry itself, but we know it's climbing. As it does, the net energy available to the rest of society falls. Current estimates for the average EROI of oil are in the 20:1 to 30:1 range, meaning that up to 5% of the produced oil is unavailable for general use.

I can buy Brent Crude contracts today for about $116/bbl. I can buy contracts to be delivered any time over the next year without paying any more than that. In fact, the price is declining the further out you go. In 2016, it is about $105. In 2019, it is $103.

That tells us what the consensus for the price is for the future, but it doesn't say why. It could be that people expect supplies to increase. It could be that they expect demand for energy to soften (conservation? lack of economic growth?). It could be that they expect alternatives to put pressure on the demand for oil. It could even be that they expect high energy taxes to drive up the retail price and put downward pressure on the wholesale price. I don't know. I don't really care. It just tells me that the people with actual skin in the game - producers, big consumers, and speculators don't see oil prices rising during the next decade. If I was sure that they were wrong, I'd buy up futures contracts now and sell them at a nice profit after the prices rise.

Natural Gas prices, btw, do appear to be headed upwards. Not dramatically, but definitely on an upward trend. The cost per unit energy for natural gas is much lower than for oil right now. The standard rule of thumb in the industry is that an mcf of gas has about one sixth as much energy as a bbl of oil. So on an energy equivalency basis, an mcf of gas should cost a sixth as much as a bbl of oil. Gas is a little over $4/mcf in the US (it's much higher in Europe and Asia) but oil is $96/bbl in the US. That tells you that you are paying about 1/4 the cost per unit of energy for natural gas as compared to oil. Expect to see an increase in the use of natural gas for energy compared with oil until that gap starts to close.

So 6mcf of natgas has about the same energy content at 1bbl of oi. And we pay $96 for the energy in a bbl of oil vs $24 for the same amount of energy in natural gas.

I didn't realize the disparity was that large; I've been so focused on renewables and nuclear that I failed to notice the amount of the price decline in natural gas.

That does speak directly to the promise of the OP, however I don't think we'll see any move to bring natgas into the personal transportation sector even so, since there are other criteria that make battery electric vehicles more desirable.