Comments on: Paper shows perils of projecting oil demand http://blogs.reuters.com/great-debate/2010/03/25/paper-shows-perils-of-projecting-oil-demand/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: JKEMP http://blogs.reuters.com/great-debate/2010/03/25/paper-shows-perils-of-projecting-oil-demand/#comment-29550 Sat, 27 Mar 2010 06:59:25 +0000 http://blogs.reuters.com/great-debate/?p=6887#comment-29550 @dandyone
(1) It was BP CEO Jeremy Hayward who commented recently that he saw demanding peaking at 95-110 million b/d sometime in the decade after 2020 in an interview carried on Radio 4. OPEC, IEA, and EIA, the three major official forecasters all have demand at 2030 in the 105-110 range. Peak oilers may have a different view. But the official “consensus” is now in the 105-110 range, even if you disagree.
(2) RE Saudi Arabias. The article says the extra oil implied by the Dargay/Gately work is 20 million bbl (which is two Saudis). The following sentence reads: “It would be needed on top of massive new production required to compensate for declines at existing fields (many of which will be exhausted by 2030) and the 20 million bpd already needed to meet even the conservative growth forecasts the industry is using.”. So it does refer to decline rates and the 2 extra Saudi Arabias the world will already need (net basis). I have written elsewhere on the IEA WEO 2008 decline rate study.

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By: dandyone http://blogs.reuters.com/great-debate/2010/03/25/paper-shows-perils-of-projecting-oil-demand/#comment-29542 Fri, 26 Mar 2010 18:41:16 +0000 http://blogs.reuters.com/great-debate/?p=6887#comment-29542 Sorry. I see that I wrote: 84 million barrels per year (world production) and 10 million barrels per year (Saudi production). These should obviously read: barrels per day.

Apologies.

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By: dandyone http://blogs.reuters.com/great-debate/2010/03/25/paper-shows-perils-of-projecting-oil-demand/#comment-29541 Fri, 26 Mar 2010 18:39:16 +0000 http://blogs.reuters.com/great-debate/?p=6887#comment-29541 >Most forecasters and oil producers are now working on the assumption global demand will peak around 105-110 million bpd sometime in the decade after 2020.

This is a totally unsubstantiated claim. Dozens of forecasts using different methodologies, data, and assumptions project a global peak in oil production *before* 2020.

>Oil production would have to rise 50 percent in just 20 years. The extra output implied by the Dargay/Gately projection is equivalent to developing two new Saudi Arabias.

World production is roughly 84 million barrels per year. Saudi production is roughly 10 million barrels per year. 50% of 84 is 42. 42 is equivalent to more than 4 new Saudi Arabias, not 2.

>The extra output… would be needed on top of massive new production required to compensate for declines at existing fields.

The current decline rate is 6.3% per year (but this rate will accelerate). This equates to 5.3 million barrels per day of production. In other words, more than 1 new Saudi Arabia of production will be required to simply offset *current* declines. If you need 1 new Saudi Arabia every 2 years, you will need 10 new Saudi Arabias in 20 years… not 2!

>the U.S. Department of Energy (DOE)’s Energy Information Administration (EIA)… [is] projecting global demand of… 107 million bpd… in 2030.

And what was the EIA predicting just a few years ago? In 2007, the EIA was projecting 117 mbd of global production. In 2008, the EIA was projecting 112.5 mbd. Now its down to 107. Note any trends?

There are serious flaws with using econometric measures to project the production of finite, non-growing resources!

This article is in need of serious review.

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