Ten oil supply basics vis-á-vis Peak Oil and sudden shortage
l
Daily world demand of oil is over 80 million barrels a day, and
approximately one quarter of this is in and by the U.S.
l Half
the oil refined in the U.S. is made into gasoline, the main product a refiner
is concerned with. Other products such as asphalt, pesticides and
plastics are minor parts of the crude-oil barrel to be disposed of (profitably
only if possible). [source: Jan Lundberg, veteran petroleum industry analyst]
l World
oil supplies are at the approximate historic peak of maximum production, due
to depletion setting in. Oil production in 18 producer countries has
passed its peak and is declining faster than previously thought: at about 1.14
million barrels a day. "Those 18 countries between them are now producing
1.14 mbpd less than they
were at their height." [Adam Porter, Aljazeerah.net]
l The
maximum possible production-capacity utilization is the order of the day among
the petroleum exporting countries: "The planet is operating at anywhere
from 95% to 99% capacity. There is no margin for error. The only
way the system can respond is continued price increases." [ Stephen Leeb,
Wall Street investment advisor and author.] At a time of no spare
refinery capacity, demand has outstripped all expectations. [Aljazeera.net]
l Regarding
rising world demand, "China and India use the energy-equivalent of 5.5
barrels of oil per person per year, while rich nations use 39. No matter how
rosy your thinking is as to the global supply of oil, there is no way there is
going to be enough to satisfy the demands of an extra 2.3 billion people
coming online." [Forbes magazine]
l U.S.
oil demand is rising as well: "U.S. petroleum demand in 2004 grew
at its strongest rate in five years." The system is straining:
"Refinery utilization rate last year was the highest annual rate in six
years at 92.8 percent of capacity." [American Petroleum Institute]
l
The " bell curve" of petroleum extraction cannot be
changed by any one big new discovery. The
world trend in declining oil discoveries has been relentless for the past four
decades. Fifty years ago, the world was consuming 4 billion barrels of
oil per year and the average discovery was around 30 billion. Today we
consume 30 billion barrels per year and the discovery rate is approaching 4
billion barrels of crude per year. [ASPO; Culturechange.org]
l An
International Energy Agency report from August 2004 indicates Saudi Arabia
needs up to 800,000 barrels per day of newly discovered oil each year just to
offset declining fields and maintain its current production level. - This
can't happen [Jan Lundberg].
l What
about renewable energy and other alternatives? They are not ready, and
will never be as long as oil is king. (This is something not
acknowledged by the boosters of the technofix.) The price of oil is kept
under the price of most alternatives. When oil abdicates because great
quantities are no longer available at affordable prices, no other
fuel/material can fill oil's shoes. [Jan Lundberg, from a prediction
originally published in the National Petroleum News in 1988]
l The
next shortage could be soon and be the last one -- that lasts and lasts, as
the watershed event of passing the peak of global oil extraction could be
right around the corner. The "market factor" in paralyzing the supply/distribution system,
through panic-buying of crude and refined products, will usher in virtual but extreme shortage, bringing much economic activity to a halt in a matter of days.
History taught us:
- "What the U.S. went through in 1979’s oil crisis, based on the
Lundberg Letter's projection of a 9% shortfall in gasoline deliveries, can
happen again. The difference will be that global production of oil will be
falling instead of increasing." - Jan Lundberg, at The Institute of
Petroleum, London, February 17, 2003
_ _ _ _
Culture
Change Letter #88 February
17, 2005 Peak
oil in a nutshell - Here comes the nutcracker
See Fall of Petroleum Civilization, top right green bar link on Culture
Change.
Additional sources used for above:
Association for the Study of Peak Oil and Gas (ASPO)
Find Adam Porter's oil coverage at
Aljazeera.net
See our "Fall of Petroleum Civilization webpages:
http://www.culturechange.org/fall_of_petroleum_civilization.html
for more data, insight, and links on oil issues.
A huge list of links and resources is at Life
After the Oil Crash
Energy Information Administration
American Petroleum Institute
