Kuwait calling Peak

By Dave Anderson:

We are an oil society.  Economic growth is correlated with oil consumption growth.  The more oil that is burned in a day, the more economic value is added.  We see this in booms and busts as global and American oil demand cratered during the start of the current recession.  The drop in both current demand, projected future demand and the flight to liquidity caused the price of oil to drop from its record high of $144 per barrel to $30 something per barrel.  And now we are in a "new normal" where a bottom has been established for this part of the economic cycle even as there is not significant growth in the major global economies except for China.  Oil is now north of $80 per barrel. 

Oil consumption has not reached its 2007-2008 highs, but the price per barrel is accelerating again.  And this is without a Katrina event, without Sunni Arab insurgents routinely blowing pipelines, without MEND routinely blowing pipelines in Nigeria and a few new large projects coming on line in the past two years. 

Kuwaiti researchers, who have a strong and vested interest in accurate predictions as that determines the fate of their nation, arepredicting that there will be a global peak in oil production within the next five years. 

Kuwaiti scientists now say that global oil production will peak in 2014.

Their work represents an updated version of the famous Hubbert model, which correctly predicted in 1956 that U.S. oil reserves would peak within 20 years. Many researchers have since tried using the model to predict when worldwide oil production might peak....

The Kuwaiti study created its world model for peak oil based on 47 individual models for each major oil-producing nation. It also took a separate look at the Organization of the Petroleum Exporting Countries (OPEC), which includes nations that control about 35 percent of the world's oil reserves.  

Many of the giant and super-giant fields that have fueled the mechanization of the world have peaked.  East Texas, Cantarell, the North Sea and now Kuwait's Burgan have all peaked.  Gwahar in Saudi Arabia is the oil field to end all oil fields, and it has either peaked, or soon will.  New oil fields such as the Brazillian deepwater subsalt fields are projected to have quick peaks and quick declines. 

The idea that the world has found most of the easy to extract oil that pooled in large concentrations and the remaining finds are much smaller, more difficult to extract and more expensive is the essence of Peak Oil.  There may be massive reserves out there but they are not recoverable at an economical price as the difficulty of recovering that oil raises prices to a point where the global economy grinds to a halt again.

And now we have an OPEC nation and major exporter calling for a Peak in the relative short term.  We can either start making adjustments now or continue with current trends until the US economy is dope-slapped a few more times in the next fifteen years. 

Comments

[Ron Beasley]

What few seem to understand is that peak oil won't be gradual - we will simply wake up some morning and there won't be enough oil at any price. Our industrial civilization will come to a screeching halt. It's probably too late to do anything about it now. More here and here.