4.Energy

***

The modern civilization is governed by the following “theorem”:

My father rode a Camel.

I drive a Car.

My son flies a Jet.

And his Son will ride a Camel! 

_Saudi Arabia’s Folk Saying

***

How Much Oil Does the World Produce?

by Robert Rapier

In the first installment of this series, I took a look at U.S. and global oil reserves according to the 2012 BP Statistical Review of World Energy. Today, I want to examine oil production statistics since 1965. Highlights of this article and topics that will be explored include:

  • New global oil production record set in 2011, but the growth rate is slowing
  • Global oil production has grown by 163% since 1965
  • Production picked up in the U.S. again during President Obama’s first year in office
  • U.S. share of global oil production dropped from 24% in 1970 to 9% in 2011
  • Quality of oil produced today is lower than it used to be

 

World Oil Production Facts and Figures

The first graphic shows the growth in oil production from 1965 to 2011. A new global oil production record was set in 2011 at 83.6 million barrels per day. This figure includes production of crude oil and natural gas liquids (NGLs), which are not indicated separately. (In the U.S., around 25% of NGLs end up as refinery inputs; most of the rest is petrochemical feedstock).

Global production is lower than BP’s reported consumption figure of 88 million barrels per day (also a record) because the latter includes contributions from biofuels, fuels derived from coal, and any other fuels that are not derived from petroleum. Inventory changes would also be reflected in this number (i.e., one could in theory consume more in 2011 than was produced by drawing down inventories from 2010).

The data show that global oil production grew between 1965 and 2011 by 163%, which represents an average annual growth rate of 2.1%. While many were convinced that crude oil had peaked in 2005, production in 2011 was around 2.7% higher than the 2005 production level. However, the average annual growth rate from 2005 to 2011 was only 0.4%, far below the historical average.

Note that those who are projecting oil production in 2030 to be 100 million or 115 million barrels per day are assuming higher growth rates than have been seen in recent years. One must assume 0.95% average annual growth to get 100 million bpd in 2030, and 1.3% to get 115 million bpd in 2035. Thus, even if you discount the possibility of an oil production peak, the recent slow growth — in the face of record oil prices — would result in oil production falling far short of those rosy projections. (To be clear, I do not believe 2030 oil production will exceed 2011 oil production).

President Obama: An Oilman in the Oval Office?

The next figure shows the history of U.S. oil production, which peaked in 1970 at 11.3 million barrels per day. Again, this includes roughly 2 million bpd of NGLs, which explains why the Energy Information Administration pegs the 1970 peak at 9.6 million bpd.

After 1970, U.S. production declined until 1977 when the Alaska pipeline began to operate. Following a few years of rising production as Alaskan oil production ramped up, the decline continued until 2008 when production reached 6.7 million bpd — 40% below the 1970 peak (per the BP data).

Then President Obama came riding to the rescue, and oil production has been rising ever since. At least that’s the story as I am sure it will unfold as the presidential campaign heats up. U.S. oil production in 2011 is in fact 16% higher than it was during the final year of the Bush Administration.

In reality, the rise in U.S. oil production is due to three factors: 1). Breakthroughs in hydraulic fracturing opened up new oil production opportunities in North Dakota and Texas; 2). Record oil prices resulted in record investments by oil companies for new production; and 3). Higher oil prices enabled more marginal oil to be produced (made possible by the first two factors).

Note that none of these factors are really influenced by the actions of U.S. presidents (although longer term, their policies can have significant impact). However, politicians like to take credit when things are going well, and point fingers when things are going badly, so I expect there to be a lot of rhetoric around this topic in coming months. While we can debate the reasons, of one thing I am fairly certain. U.S. oil production will rise again this year, which means President Obama will have presided over 4 straight years of increasing domestic oil production. This will be the first time that has taken place since the administration of Lyndon B. Johnson.

U.S. Oil Production Compared to Rest of the World

The final graphic shows U.S. production in relation to the global total.

Because U.S. production has fallen over the years (even though production has been rising, 2011 production was still 31% below the peak level of 1970) and because global production has risen, the U.S. percentage of global crude production has declined from 24% in 1970 to 9% in 2011. Nevertheless, the U.S. is still the 3rd largest oil producer in the world, trailing only Saudi Arabia (11.1 million bpd) and Russia (10.3 million bpd). But one very big difference between us and them is that they produce far more than they use, and therefore make lots of money exporting oil. We produce far less than we use, and so we spend a lot of money on imports (with some of that money going to Saudi Arabia and Russia).

One final note about oil production that gets very little attention is the fact that the 83.6 million barrels produced in 2011 is of a lower quality than the 32 million barrels produced in 1965. Crude oil is getting heavier, contains more sulfur (i.e., is more sour) and requires more energy both to produce and to refine. While BP does not track this information, a quick look at the EIA data on crude oil quality confirms it. They only track the data back to 1985, but since then the overall mix of oil going to U.S. refineries is 5.5% heavier and contains 54% more sulfur.

The implications from this are: 1). Refineries have to become more complex to process this oil; 2). The net energy that can be obtained from a barrel of oil is declining; and 3). As a result the costs to process it are higher. This trend will continue as the world uses up the remaining supplies of light, sweet crude oil.

***

***

Boy and Camel

***

3/29/2011

.

Oil could be gone in next 50 year: HSBC

.

There could be less than 49 years of oil supplies left, even if demand were to remain flat according to HSBC’s senior global economist Karen Ward.

“Energy resources are scarce,” Ward said in a research note. “Even if demand doesn’t increase, there could be as little as 49 years of oil left.”

Gas is less of a constraint, but transporting it and using it to meet transport demand is a major issue,” she said. “Coal is the most abundant with 176 years left, but this is the worst carbon culprit.”

If supplies were not constrained, the world would see a 110 percent jump in demand by 2050, equivalent to 190 million barrels a day, to fuel growth in the emerging world, Ward said.

But unless someone finds major new reserves this will not be possible and other sources of energy will need to be found.

“Energy security – defined in this instance as domestic energy production per head of population – will be an increasing concern,” she said. “Diversifying to natural gas to ease the pressure on the oil market won’t overcome it since its supply is as geographically dense as oil.”

Ward said she believes the most “energy insecure” regions are Europe, Latin America and India and predicts Europe in particular will find its energy situation getting worse.

“Europe is the big loser with many countries falling down or out of the league table of economic size,” she said. “They could be losing their influence on the world stage just at the time when they are most vulnerable.”

No Fast Cars

The threat of global warming is not going away and its impact will be most keenly felt in the developing world, HSBC said.

“The ‘solution’ requires greater energy efficiency and a switch in the mix of energy as well as using ‘carbon capture’ technology to limit the damage of fossil fuel use,” Ward said.

We have become terribly complacent in the way in which we use energy,” she added. “The lowest hanging fruit is in the transport sector. Smaller, more efficient cars will get you from A to B, just not as quickly.”

As the Japanese authorities work around the clock to avoid a nuclear disaster there is a risk that nuclear power generation will see investment cut back at a time when it was expected to play a far bigger role.

“If Fukushima results in a two-decade freeze on plans, as we saw following the Chernobyl disaster in 1986, then renewable energy will have to play an even larger role, or efficiency improvements would have to accelerate further,” Ward said. “A reduced role for nuclear energy would make meeting carbon limits even more challenging.”

“Government foresight on a scale not seen for 40 years will be needed to chart the route for the next 40 – at a time when the public sector in the OECD has perhaps the least capacity in decades to make strategic investments in new infrastructure.”

CNBC

***

.

***

*************************************************************************************************************

***

*************************************************************************************************************

Energy consumption & production in America

Energy: World Oil Production

Energy: Oil reveals where the next bombs will fall!

The rise & fall of modern city: Detroit; Will China face the same fate?

***

World Crude Oil Production by Day

2004        72.48M

2005        73.72M

2006        73.44M

2007        72.99M

2008        73.69M

2009        72.26M

***

Table 11.5  World Crude Oil Production, 1960-2009
                       (Million Barrels per Day)
Year Persian
Gulf
Nations 2
Selected OPEC 1 Producers Selected Non-OPEC 1 Producers World
Iran Iraq Kuwait 3 Nigeria Saudi
Arabia 3
United
Arab
Emirates
Venezuela Total
OPEC 4
Canada China Mexico Norway Former
U.S.S.R.
Russia United
Kingdom
United
States
Total
Non-OPEC 4
1960
5.27 1.07 0.97 1.69 0.02 1.31 0.00 2.85 8.27 0.52 0.10 0.27 0.00 2.91 – – (s) 7.04 12.72 20.99
1961
5.65 1.20 1.01 1.74 .05 1.48 .00 2.92 8.93 .61 .11 .29 .00 3.28 – – (s) 7.18 13.52 22.45
1962
6.19 1.33 1.01 1.96 .07 1.64 .01 3.20 10.05 .67 .12 .31 .00 3.67 – – (s) 7.33 14.30 24.35
1963
6.82 1.49 1.16 2.10 .08 1.79 .05 3.25 11.07 .71 .13 .31 .00 4.07 – – (s) 7.54 15.06 26.13
1964
7.61 1.71 1.26 2.30 .12 1.90 .19 3.39 12.52 .75 .18 .32 .00 4.60 – – (s) 7.61 15.66 28.18
1965
8.37 1.91 1.32 2.36 .27 2.21 .28 3.47 13.86 .81 .23 .32 .00 4.79 – – (s) 7.80 16.47 30.33
1966
9.32 2.13 1.39 2.48 .42 2.60 .36 3.37 15.29 .88 .29 .33 .00 5.23 – – (s) 8.30 17.67 32.96
1967
9.91 2.60 1.23 2.50 .32 2.81 .38 3.54 16.29 .96 .28 .36 .00 5.68 – – (s) 8.81 19.11 35.39
1968
10.91 2.84 1.50 2.61 .14 3.04 .50 3.60 18.11 1.19 .30 .39 .00 6.08 – – (s) 9.10 20.53 38.63
1969
11.95 3.38 1.52 2.77 .54 3.22 .63 3.59 20.11 1.13 .48 .46 .00 6.48 – – (s) 9.24 21.59 41.70
1970
13.39 3.83 1.55 2.99 1.08 3.80 .78 3.71 22.56 1.26 .60 .49 .00 6.99 – – (s) 9.64 23.32 45.89
1971
15.77 4.54 1.69 3.20 1.53 4.77 1.06 3.55 24.41 1.35 .78 .49 .01 7.48 – – (s) 9.46 24.10 48.52
1972
17.54 5.02 1.47 3.28 1.82 6.02 1.20 3.22 26.03 1.53 .90 .51 .03 7.89 – – (s) 9.44 25.11 51.14
1973
20.67 5.86 2.02 3.02 2.05 7.60 1.53 3.37 29.66 1.80 1.09 .47 .03 8.32 – – (s) 9.21 26.02 55.68
1974
21.28 6.02 1.97 2.55 2.26 8.48 1.68 2.98 29.32 1.55 1.32 .57 .04 8.91 – – (s) 8.77 26.39 55.72
1975
18.93 5.35 2.26 2.08 1.78 7.08 1.66 2.35 25.79 1.43 1.49 .71 .19 9.52 – – .01 8.37 27.04 52.83
1976
21.51 5.88 2.42 2.15 2.07 8.58 1.94 2.29 29.12 1.31 1.67 .83 .28 10.06 – – .25 8.13 28.23 57.34
1977
21.73 5.66 2.35 1.97 2.09 9.25 2.00 2.24 29.58 1.32 1.87 .98 .28 10.60 – – .77 8.24 30.12 59.71
1978
20.61 5.24 2.56 2.13 1.90 8.30 1.83 2.17 28.16 1.32 2.08 1.21 .36 11.11 – – 1.08 8.71 32.00 60.16
1979
21.07 3.17 3.48 2.50 2.30 9.53 1.83 2.36 29.35 1.50 2.12 1.46 .40 11.38 – – 1.57 8.55 33.32 62.67
1980
17.96 1.66 2.51 1.66 2.06 9.90 1.71 2.17 25.38 1.44 2.11 1.94 .49 11.71 – – 1.62 8.60 34.17 59.56
1981
15.25 1.38 1.00 1.13 1.43 9.82 1.47 2.10 21.22 1.29 2.01 2.31 .47 11.85 – – 1.81 8.57 34.83 56.05
1982
12.16 2.21 1.01 .82 1.30 6.48 1.25 1.90 17.77 1.27 2.05 2.75 .49 11.91 – – 2.07 8.65 35.68 53.45
1983
11.08 2.44 1.01 1.06 1.24 5.09 1.15 1.80 16.57 1.36 2.12 2.69 .61 11.97 – – 2.29 8.69 36.69 53.26
1984
10.78 2.17 1.21 1.16 1.39 4.66 1.15 1.80 16.50 1.44 2.30 2.78 .71 11.86 – – 2.48 8.88 38.00 54.50
1985
9.63 2.25 1.43 1.02 1.50 3.39 1.19 1.68 15.37 1.47 2.51 2.75 .77 11.59 – – 2.53 8.97 38.60 53.97
1986
11.70 2.04 1.69 1.42 1.47 4.87 1.33 1.79 17.46 1.47 2.62 2.44 .84 11.90 – – 2.54 8.68 38.74 56.20
1987
12.10 2.30 2.08 1.59 1.34 4.27 1.54 1.75 17.71 1.54 2.69 2.55 .98 12.05 – – 2.41 8.35 38.92 56.63
1988
13.46 2.24 2.69 1.49 1.45 5.09 1.57 1.90 19.74 1.62 2.73 2.51 1.11 12.05 – – 2.23 8.14 38.96 58.69
1989
14.84 2.81 2.90 1.78 1.72 5.06 1.86 1.91 21.40 1.56 2.76 2.52 1.48 11.72 – – 1.80 7.61 38.40 59.79
1990
15.28 3.09 2.04 1.18 1.81 6.41 2.12 2.14 22.49 1.55 2.77 2.55 1.63 10.98 – – 1.82 7.36 38.00 60.49
1991
14.74 3.31 .31 .19 1.89 8.12 2.39 2.38 22.48 1.55 2.84 2.68 1.87 9.99 – – 1.80 7.42 37.71 60.19
1992
15.97 3.43 .43 1.06 1.94 8.33 2.27 2.37 23.74 1.61 2.85 2.67 2.13 – – 7.63 1.83 7.17 36.37 60.12
1993
16.71 3.54 .51 1.85 1.96 8.20 2.16 2.45 24.46 1.68 2.89 2.67 2.28 – – 6.73 1.92 6.85 35.71 60.17
1994
16.96 3.62 .55 2.03 1.93 8.12 2.19 2.59 24.90 1.75 2.94 2.69 2.57 – – 6.14 2.37 6.66 36.20 61.10
1995
17.21 3.64 .56 2.06 1.99 8.23 2.23 2.75 25.54 1.81 2.99 2.62 2.77 – – 6.00 2.49 6.56 36.85 62.38
1996
17.37 3.69 .58 2.06 2.00 8.22 2.28 2.94 26.02 1.84 3.13 2.86 3.09 – – 5.85 2.57 6.46 37.73 63.75
1997
18.10 3.66 1.16 2.01 2.13 8.36 2.32 3.28 27.29 1.92 3.20 3.02 3.14 – – 5.92 2.52 6.45 38.45 65.74
1998
19.34 3.63 2.15 2.09 2.15 8.39 2.35 3.17 28.37 1.98 3.20 3.07 3.01 – – 5.85 2.62 6.25 38.60 66.97
1999
18.67 3.56 2.51 1.90 2.13 7.83 2.17 2.83 27.22 1.91 3.20 2.91 3.02 – – 6.08 2.68 5.88 38.70 65.92
2000
19.89 3.70 2.57 2.08 2.17 8.40 2.37 3.16 28.98 1.98 3.25 3.01 3.22 – – 6.48 2.28 5.82 39.52 68.49
2001
19.10 3.72 2.39 2.00 2.26 8.03 2.21 3.01 28.16 2.03 3.30 3.13 3.23 – – 6.92 2.28 5.80 39.94 68.10
2002
17.79 3.44 2.02 1.89 2.12 7.63 2.08 2.60 26.39 2.17 3.39 3.18 3.13 – – 7.41 2.29 5.75 40.77 67.16
2003
19.06 3.74 1.31 2.14 2.28 8.78 2.35 2.34 27.98 2.31 3.41 3.37 3.04 – – 8.13 2.09 5.68 41.45 69.43
2004
20.79 4.00 2.01 2.38 2.33 9.10 2.48 2.56 30.41 2.40 3.49 3.38 2.95 – – 8.80 1.85 5.42 R 42.07 R 72.48
2005
21.50 4.14 1.88 2.53 2.63 9.55 2.54 2.56 31.87 2.37 3.61 3.33 2.70 – – 9.04 1.65 5.18 R 41.85 R 73.72
2006
21.23 4.03 2.00 2.54 2.44 9.15 2.64 2.51 31.59 2.53 3.67 3.26 2.49 – – 9.25 1.49 5.10 R 41.84 R 73.44
2007
20.67 3.91 2.09 2.46 2.35 8.72 2.60 2.43 31.21 R 2.63 3.73 3.08 2.27 – – 9.44 1.50 5.06 R 41.78 R 72.99
2008
R 21.91 R 4.05 R 2.38 2.59 2.17 9.26 2.68 2.39 R 32.48 R 2.60 3.79 2.79 2.18 – – 9.36 1.39 R 4.95 R 41.21 R 73.69
2009P
20.40 4.04 2.39 2.35 2.21 8.25 2.41 2.24 30.65 2.56 3.80 2.60 2.07 – – 9.50 1.33 5.31 41.61 72.26
1See “Organization of the Petroleum Exporting Countries (OPEC)” in Glossary.  On this table, countries
are classified as “OPEC” or “Non-OPEC” in all years based on their membership status as of January 1,
2009.
R=Revised.  P=Preliminary.  – – = Not applicable.  (s)=Less than 0.005 million barrels per day.  
2Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, United Arab Emirates, and the Neutral Zone (between
Kuwait and Saudi Arabia).
Notes:  ·  Data are for crude oil, including extra heavy crude oil, lease condensate, and liquids processed
from Canadian oil sands; they exclude natural gas plant liquids.  ·  Totals may not equal sum of
components due to independent rounding.
3Includes about one-half of the production in the Neutral Zone between Kuwait and Saudi Arabia. Web Page:  For related information, see http://www.eia.gov/international.
4On this table, “Total OPEC” for all years includes Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya,
Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela, and the Neutral Zone (between Kuwait and
Saudi Arabia).  Data for all countries not included in “Total OPEC” are included in “Total Non-OPEC.” 
Sources:  Selected OPEC Producers:  ·  1960-1972—OPEC, Annual Statistical Bulletin 1979.
·  1973-1979—U.S. Energy Information Administration (EIA), International Energy Annual (IEA), annual
reports, and the International Energy Database.  ·  1980-2008—EIA, International Energy Statistics, April 7,
2010.  ·  2009—EIA, Monthly Energy Review (MER) (April 2010), Table 11.1a.  China:
·  1960-1972—Central Intelligence Agency, unpublished data.  ·  1973-1979—EIA, IEA, annual reports,
and the International Energy Database.  ·  1980-2008—EIA, International Energy Statistics, April 7, 2010.
·  2009—EIA, MER (April 2010), Table 11.1b.  Former U.S.S.R.:  ·  1960-1969—U.S.S.R. Central
Statistical Office, Narodnoye Khozyaystvo SSSR (National Economy USSR).  ·  1970-1979—EIA,
International Petroleum Monthly, February 2001, Table 4.1c.  ·  1980-1991—EIA, International Energy
Statistics, April 7, 2010.  Russia:·  1992-2008—EIA, International Energy Statistics, April 7, 2010.
·  2009—EIA, MER (April 2010), Table 11.1b.  United States:  Table 5.1.  All Other Data:
·  1960-1969—Bureau of Mines, International Petroleum Annual, 1969.  ·  1970-1972—EIA, International
Petroleum Annual, 1978.  ·  1973-1979—EIA, IEA, annual reports, and the International Energy Database.
·  1980-2008—EIA, International Energy Statistics, April 7, 2010.  ·  2009—EIA, MER (April 2010), Tables
11.1a and 11.1b.

http://www.eia.doe.gov/aer/txt/ptb1105.html

***

Shark vs. Octopus:  Which one is going to win?

Watch this:

.

***

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s