The Last Time There Were 85 Million Barrels a Day
Justin Fox at Time magazine has a dispassionate report on oil production. In July 2006, he writes, the world produced 85.5 million barrels of oil a day, but hasn't done so again despite the incentive of a $20-a-barrel rise in prices.The report backs up recent analysis that -- quite distinct from so-called peak oil -- the world may simply be incapable of producing much more crude oil per day. And that has significant consequences for the global economy.
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3 Comments:
Seems like Mr. Fox is taking his cue from Mr. Simmons who has been trying to convince people that oil production peaked in June 2006. It's easy to say this when you aren't looking at a time series that's long enough to see other periods of time (also during price increases) where world oil production fell, only to rebound several months later. I could have cried wolf in June of 2006 that oil has not been at its record peak of 85.3 mmbd since May 2005. (all statistics I am citing are here:
http://www.eia.doe.gov/emeu/ipsr/t14.xls
In the case at hand, July 2006 was followed in September by what would amount to over 1 million bbl/d in coordinated OPEC production cuts. I'm not even going to get into the issue of NGLs and condensate additions either, since these also blur measures of total world oil production.
That's not to say that peak oil isn't a problem or that it should be ignored, but journalists like Mr. Fox simply ought to be looking at the data with a bit more perspective. (Great blog by the way)
One more thing ... According to the latest release of the Short Term Energy Oulook (www.eia.doe.gov/steo, Table 3a), October 2007 world oil production is estimated at 85.77 mmbd, exceeding the amount achieved in July 2006.
Welcome Michael. Eighty-five is probably low, agreed. However 100 million barrels a day may not be.
One huge matter is labor -- there may not be sufficient numbers of skilled hands, particularly if the discovered new reservoirs are sub-giants, requiring more crews to produce the same volume of oil, and thus putting increasing demands on the labor pool.
This of course is so-called plateau and not peak theory. But it's the issue of volume constraint all the same.
I also agree that the supply discussions can be alarmist. There is time to figure this one out.
Thanks for the note and best, Steve
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