Comprehensive Projection of World Oil Exports

Prof. Goose writes, "This article is a comprehensive assessment of world oil exports, defined has the total amount of liquid hydrocarbons that are surpluses in producing countries. This assessment is made by projecting into the future fixed change rates that reflect current trends in liquids production and consumption in all countries where presently the difference between the two factors is positive. The outcome of this assessment is rather worrisome." Here is the money graph through 2020.

Comments

There's plenty of Oil and the Economy is just fine

[popo]

Until after the elections, that is.

Worrisome?

[susano_otter]

The only worrisome thing I see about this projection is that it's based on extending current trends into the future.

Probably because it's easier than predicting how technological innovation and the ebb and flow of the global economy will totally change the entire equation long before these simplistic predictions ever come due.

Re:Worrisome?

[Ignignot]

It is actually even worse than that. It uses the data from BP and the ASPO:

This assessment uses as data sources the Statistical Review of World Energy, published yearly by BP, and the monthly newsletter published by ASPO, where assessments for future oil production are available for more than 40 individual countries.

Now, why would a site that seems to be focused on a scarce energy outlook use these two sources? Probably because BP and the ASPO both have huge energy holdings. Their reports will show that energy is going to be more valuable in the future. The only way for it to be more valuable is if it is scarcer.

The real question is, why didn't they use data from the IEA or EIA? (I know, very similar letters)

The EIA suggests cheaper energy prices long term and a probable energy glut short term because we've had unreasonably high oil prices (high prices means that you drill for more oil... but our consumption has been basically flat = too much oil!) and the IEA is more moderate.

Not saying that this slam dunk bullshit but you have to question the source.

I know everyone loves the "running out of oil" story, but if that were true then why is oil barely above $60 when we have 2 huge suppliers threatening to cut back production, and North Korean bomb tests? If we were really running out of oil and some people threatened to cut us off plus some negative diplomatic news, we would be over 100 easily.

Re:Worrisome?

[Qzukk]

I know everyone loves the "running out of oil" story, but if that were true then why is oil barely above $60 when we have 2 huge suppliers threatening to cut back production, and North Korean bomb tests? If we were really running out of oil and some people threatened to cut us off plus some negative diplomatic news, we would be over 100 easily.

Because we're not running out of oil, yet. Besides, North Korea doesn't have oil, and probably couldn't nuke any of the serious oil exporters from there. Oil prices are not psychic, they have nothing to do with the future beyond what people perceive the future to be, and apparently they're perceiving the future the same way the EIA does.

Perhaps you're right, perhaps the authors are biased. It could be that the numbers they used are biased, intentionally or unintentionally. Controlling that perception is what controls the prices, so the participants certainly have a good stake in this. (I wonder what the US government's bias on oil prices would be...)

Still, if I had a penny for every person who thinks that we'll just "find more oil" when what we have now runs out, I'd have enough money to buy a metal detector powerful enough to find the pirate treasure buried in my front yard. Because it's gotta be there, I just need a bigger, better, and more expensive detector to find it.

Re:Worrisome?

[lawpoop]

"I'm actually surprised they let it get as high as they did over the summer, but I guess there is only so much you can do against speculation."

Getting away from a petroleum economy is a process that will take years, not a few weeks. In order to use non-petroleum fuels, you need 1) production, 2) delivery infrastructure and 3) consumption structure (i.e. ethanol cars, hydrogen home water-heaters).

Because each of those three factors depend on the other two factors in order to be profitable, this change will only come about as a slow spiral of support, starting out small and slowly growing.

We are still totally dependent on petroleum. The petro companies will continue to make money on short-term volatility. We will only start to change to a non-petroleum economy when the general public percieves that it is *certain* that petroluem will only get more scarce in the future. Then, they might consider buying a flex fuel vehicle next year, provided they have seen enough E85 pumps at the gas station on their way hom from work.

Brutal Graph

[MLopat]

The makers of that "money graph" don't seem to know how to do any extrapolation. Canada shows a decline in exports for the next 15 years which is absurd. As the Alberta Tar Sands become more and more viable Canada's exports will increase substantially. Shell is already heavily invested out there and so are numerous other oil companies. If anyone is interested they can check some of the statistics.

Re:Brutal Graph

[Rei]

My father is a pres. of Shell USA and a VP of Shell Intl. Early last year, I was talking to him, and he mentioned that they were working on 4xing their tar sands production. It's becoming very profitable. It was a gamble when they started putting money into it, but it's looking to be a good investment.

Question

[joggle]

Would people vote for a presidential candidate if he said something to the effect "I promise to increase taxes for the sole purpose of implementing whatever technology is prudent to quickly wean ourselves from foreign oil." My guess is no so we will just have to wait until the price of oil goes through the roof, crippling the economy before anything significant happens.

Re:Question

[Red Flayer]

How about: "I promise to redirect tax revenue to the purpose of implementing whatever technology is prudent to quickly wean ourselves from foreign oil."

That's not so unpalatable, is it?

The problem is that foreign oil dependency is an abstract that most voters care very, very little about. Instead, we're focused on who gets a blowjob or who IMs a 16-year-old or who is a coward or who took a bribe for political activity.

I'm not saying that these are irrelevant issues, but issues like them garner 99% of public attention, leaving precious little room for non-immediate concerns.

Silver

[popo]

If anyone cares, the world is destined to run out of raw silver reserves long, long before it runs out of oil. Dozens of analysts are expecting a COMEX default on silver futures within the next couple years. It might not seem like a big deal, but just watch what happens to the price of silver when it does...

(Silver is used in tons of medical equipment. There's a lot of nanotechnology research being done to develop a good substitute, but its still years off)

Re:Silver

[popo]

Also worth checking out:

http://news.silverseek.com/TedButler/1160149628.ph p

Including "innovation" is dangerous.

[Kadin2048]

Well, you really don't want to factor future technological developments into the predictions, because that encourages people to just keep doing what they're doing, and might cause the technological developments that you were counting on, to never be introduced.

The point of these predictions, IMO, is to show us what will happen if we just keep bumbling along, doing what we're currently doing.

If you assume that we'll start using more efficient cars in the future, and take that into consideration when making your graph/paper/prediction/whatever, then it might make the looming crisis look less severe, meaning that people won't actually start using more efficient cars ... and the crisis ends up being worse.

It's a self-defeating prophesy: if you make it look like we're going to do better than we're currently on target to do, taking no corrective action, then you encourage us to not take any.

Re:Including "innovation" is dangerous.

[grassy_knoll]

It's a self-defeating prophesy: if you make it look like we're going to do better than we're currently on target to do, taking no corrective action, then you encourage us to not take any.

So then, the best thing to do is exagerate how bad things are to force people to do what some think needs to be done?

Perhaps exagerated consequences ( which don't materialize ) tend to discredit the suggested action, no matter how valid?

Re:Including "innovation" is dangerous.

[Maniakes]

If you assume that we'll start using more efficient cars in the future, and take that into consideration when making your graph/paper/prediction/whatever, then it might make the looming crisis look less severe, meaning that people won't actually start using more efficient cars ... and the crisis ends up being worse.

As economist Herb Stein observed, "If something can't go on forever, it won't."

There's a price at which conservation makes sense (which varies from person-to-person, and there's different prices for different degrees of conservation). There's a price at which extracting oil from tar sands makes sense. There's a price at which synthesis of oil from coal makes sense. There may be a price at which ethanol makes sense (I've heard conflicting reports over whether ethanol from corn is energy-profitable). There's a price at which electric cars (powered by fission, or from solar power) make sense.

There's billions of dollars to be made by guessing right about when and whether these price points will be hit, so investors are going to put a lot of effort into making intelligent guesses and acting on them at the appropriate times.

Re:Including "innovation" is dangerous.

[Rei]

I agree. This is widely blown out of proportion.

First off, all of the predictions that we see in the article are from Colin Campbell. He's a geologist who represents the fringe of the "peak oil" movement, and founded the association for the study of peak oil and gas. The guy has trouble being right. In addition to being continually proven wrong about the discovery of large new oil fields (which keep turning up -- not to mention old fields unexpectedly finding new life) and the rates at which existing fields will produce, every few years he pushes back his predicted peak. First it was 1995. It's all the way back to 2007 now. Aaany day now, Colin!

Secondly, the logic that this article is based on is faulty. It fails to acknowledge the most critical factor in oil production and pricing: the price of oil influences both the demand and the rate of production of fuels (inc. alternatives). The more expensive oil gets, the slower world economic growth occurs, which drastically reduces demand. At the same time, the more expensive oil gets, vast new reserves come online. At current oil prices, Saudi Arabia doesn't have the world's largest reserves: Venezuela does. Venezuela's reserves were once dwarfed by Saudi Arabia's because they're more expensive to produce from. With high prices, a vast amount of Venezuelan oil comes online.

But it doesn't stop there. Current prices are high enough to make Canadian tar sands profitable. Shell is leading the way here, and is majorly scaling up their operations. If you count the tar sands, Canada goes up into the world leader position. But hey, why stop there? Coal liquifaction is borderline profitable at current prices. The US has hundreds of years of coal to mine; even if we start converting it to oil, it's a massive energy influx. And do we really even need to get into oil shale, methane hydrates, ethanol (esp. from cellulose), biodiesel, waste polymerization, and vehicles driven by electricity or hydrogen (which, effectively, can be powered by the grid, which means that any potential power source will work).

Yes, prices will rise. So? We've gotten a free ride on ubercheap oil for too long. At current prices, however, countless technologies are either freshly viable or near-viable for energy production -- both for producing petroleum, and for producing petroleum alternatives. If prices rise further, it makes them all the prettier for investors. This peak oil fearmongering is just silly.

Re:Including "innovation" is dangerous.

[RevMike]

Wait a minute! Let me see if I can boil this down...

When a something is in high demand and becomes scarce it becomes more expensive. Because it is more expensive, people will seek out and develop alternative sources for the product, as well as alternative products.

Is this just crazy talk? Are you saying that we didn't go back to candles when we ran out of whale oil? But instead we developed an alternative - petroleum? Or that when since cane sugar is expensive we sweeten lots of food products with corn syrup?

Holy freshman year economics, Batman!

Someone better tell these simple proven facts to the prophets of doom. I'm sure that they'd rather have a hand in informing the public of all this, rather than exploit the public with their gloomy predictions for personal gain.

Re:Including "innovation" is dangerous.

[Eccles]

Note that part of the "expensive" factor of the oil sands/shales is that it requires quite a bit of energy to separate out the oil, which effectively means the yield is substantially lower. Having more oil than Saudi Arabia is meaningless if you have to use 70% of it just refining the next lot.

However, what the recent events have shown us is that regardless of the sources, the relatively inelastic demand for oil can produce major price shocks with huge detriments to the economy. So even if there's plenty of potential oil, it's not good for us to be so dependent on it.

Re:Including "innovation" is dangerous.

[RevMike]

Yes! We'll just replace every vehicle and every oil-driven power station with something we haven't invented yet IN THE NEXT 20 YEARS!! How blindingly obvious!

Yep we'll have to do that, since absolutely nothing out there consuming oil will reach the end of its useful life in 20 years and would be up for replacement anyway. Also none of the alternatives like extracting oil from tar sands, from deep water wells, or producing oil from coal could feasibly be used in any equipment currently in use. All those people currently driving around in biodiesel fueled cars are just imagining that they are using a petroleum alternative. And while people are willing to spend $30,000 on a new car, spending $30,035 on a flex-fuel vehicle capable of also running on E85 will put the world economy into a tailspin.

Let's assume, however, that we don't find new reserves, we don't find ways to more efficiently recover our current reserves, and that tar sands and the like don't pay off in a big way.

We could easily do a 70-80% replacement of petroleum as a motor fuel source in only 10 years based n bio-fuels like ethanol and bio-diesel. Big consumers like oil fired power plants can be refueled fairly easily for coal. They're big, but there are relatively few of them so they are easy to do. And you only need to replace a few pieces, the boilers and turbines and generators continue to operate as before. What you are left with is the medium sized plants. Large diesel generators at industrial plants, railroad locomotives, things with 40 year lifespans but are too numerous to convert easily. After removing the motor fuels and big power plants from the equation, however, you've halved the demand for oil, which means that you now hav 40 years to update this infrastructure. And as the updating procedes, it pushes back the date when we run out of oil.

Re:Including "innovation" is dangerous.

[Martin Blank]

Where are you going to get the ethanol to make all of this E85? Without some really major changes, the land required for this would be prohibitive. Some back-of-the-envelope numbers from a post I made elsewhere:

Gasoline consumed by United States annually: 140 billion gallons
Average energy of gasoline: 114,000 btu per gallon
Annual energy from gasoline in the United States: 16.0 E+15 btu

Average energy from ethanol: 76,100 btu per gallon
Volume of ethanol required to meet gasoline energy needs: 210 billion gallons
Volume of ethanol per bushel of corn: 2.7 gallons
Volume of corn required to replace gasoline use: 78 billion bushels
Volume of corn per area of farmland: 150 bushels per acre
Volume of ethanol per area of farmland: 410 gallons per acre
Area required to replace gasoline use: 520 million acres, or 2.1 million km^2

Total land area of United States: 9,161,000 km^2
Fraction of land required to meet gasoline energy needs: 23%

That fraction declines with other, more efficient stocks, but there are sometimes other expenses involved depending on the particular crop. Corn is the most widely-known and -used input, but sugarcane and sugarbeets are also possible. Switchgrass can reportedly yield as much as 1200 gallons per acre (though the energy efficiency is debated) and would thus significantly reduce the area required, but 8% of the country is still almost the size of North and South Dakotas, Nebraska, and Kansas combined.

To put this in further perspective, according to the CIA World Factbook, the total arable land for the United States is about 18%, so even with switchgrass, nearly half of the arable land would be devoted to fuel use, putting a massive dent in the ability of this nation to feed itself.

This is for straight ethanol use with no gasoline, but E85 barely dulls the edge of that blade.

Re:Who is FSU?

[ZombieWomble]

"Former Soviet Union", I suspect. Or in other words, Russia (I am unsure of how much the other countries under that umbrella term contribute, as Russia by itself is the 2nd largest exporter of oil)

Clearly, this signals the end of the World

[taxman_10m]

of Warcraft.

Oil FUD

[Keebler71]

The problem with these types of analyses is that they usually only conisder capacity and reserves using today's methods. Today's recovery methods are driven by current economics. There are X gallons of oil that is exploitable using current technologies. There exist many other technologies for recovering far (literally nearly infinitely) greater quantities of oil; however these technologies do not produce oil at profitable costs. However, what is not profitable at $50/barrel might be profitable at $100/barrel (e.g. deeper wells, oil shale, open-water drilling, etc...) I have yet to see a study that takes these economic and technology factors into account when calculating the future capacities and reserves.

As Sowell would say, there is not a shortage of oil - there is only a shortage of oil at today's prices.

Re:World population will be 6x10^9 by the year 200

[susano_otter]

Well, good old progress has allowed us to produce a lot more food than we could back in the 70s, when people were fond of predicting we'd all be dead of starvation by now, on account of there being too many of us to ever possibly feed.

As it turns out, the population has grown as predicted, but progress managed to keep up.

no, that's not quite right...

[Gooseygoose]

Just an fyi, we're not one-sided, we're not partisan (I would point you to our press release: http://www.theoildrum.com/story/2006/4/26/121441/8 91), and we encourage empirical/scientific study of these phenomena.

In other words, we're not your daddy's peak oil site. Read the site at least a bit (and know what you're talking about) before you spout off like that, eh?

Re:There's plenty of Oil and the Economy is just f

[dpilot]

Using energy, particularly derived from fossil fuels, is a RIGHT! Nay, an OBLIGATION!

Only a terrorist or a commie pinko would think of energy usage as a cost, something to be balanced and minimized!

Re:No, we're running out!!

[fm6]

Yeah, people keep talking about how the oil supply is finite, and they keep turning out to be wrong. Obviously it's infinite, so let's just stop worrying!

Re:World population will be 6x10^9 by the year 200

[fm6]

And how do we produce all that food? With petroleum-based fertilizers. We're using a finite resources that's getting harder and harder to come by to feed an exponentially growing number of people.

This topic always has people saying, "There's always been a fix for this kind of problem. We'll find the next one when we need it." OK, probably we will next time. And the next time. But if we keep pushing our luck, we're going to come up dry one of these days.

Now, I'm willing to do that feed people. But to indulge people's SUV habit? Uh uh.

Re:No, we're running out!!

[Mikya]

So how many houses do you think you could power if we put a wind turbine behind this guys head?

Selection bias?

[argStyopa]

The outcome of this assessment is rather worrisome.

Well, isn't that the point?

I mean, I took temperature measurements from 5 different hours this morning and got the following results:
5am = 35 F
6am = 40 F
7am = 45 F
8am = 50 F
9am = 55 F

By midnight, trends indicate it's going to be around 130 degrees F! I need to post this on the intarweb, so everyone will know that the sky is indeed falling. My conservative projections prove it.

World oil exports?

[Eric Smith]

The world exports only a tiny amount of oil, and of that only a completely insignificant fraction has left the solar system.

I'd worry far more about the oil we use on-planet.

Re:No, we're running out!!

[XanC]

Your "insightful" comment betrays a lack of economic understanding. There will be no discontinuity, no moment in the future when we run out of oil and everything grinds to a halt.

We will never run out of oil.

As supply decreases, the price will increase, and at some point something else will reach the cost/benefit ratio of oil. Rising prices will speed that along.

But even giving you the benefit of "as supply decreases" is not borne out by history. Enviro-types have been telling us for decades that supply is dwindling, yet it increases every year.

So on balance, I have no trouble with society using as much oil as it's worth for us to pay for.

Re:No, we're running out!!

[Squalish]

Yeah... that was (unfortunately) bullshit. And to compound it, conveniantly timed bullshit.