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just follow the $$$
11:32 PM on 08/16/2009
Thank you for reminding me of the basics of supply and demand. Squeeze the supply and jack up the prices. *sigh*
06:54 PM on 08/16/2009
Begging indulgence on continuing, i also would take issue with the above Club of Rome comments. Its Limits to Growth study, assisted by MIT in 1972, projected an All Liquids PEAK of 117-mbd in 1995. Built on a URR foundation of 2150-Gb, the globe was to "run out of oil" in 2075.

For comparson, MK Hubbert's infamous 1974 forecast was a lesser 111 in 1995, but comprised only 2000-Gb of regular conventional crude ... no NGL or non-conventionals (arctic, deep sea, bitumen, x-heavy, CTL, GTL or BTL). Current and historically significant Depletion Scenarios can be viewed at our website:

Our own monthly analysis of the average of the top 20 recognized projections indicates that PEAK OIL will be 93-mbd in 2023.

But i digress. Back to today's post. Monthly IEA stats face only minor revisions down to road ... less than 1%. Many of us take issue with their not adjusting their Bitumen & BTL figures to reflect energy inputs, but the overall effect less than 1mbd.

As mentioned, we track past forecasts. When looking back at those from the late 90's, the IEA has the 4th best accuracy record. Its 1996 WEO was within 2mbd in its projections for 2008 & 2009. The best in class are Scenarios by Duncan-Youngquist, Jean Laherrere & the EIA.
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12:55 PM on 08/17/2009
Hi Freddy,
Quite the website you have- I will indulge myself in depth over the next, say, few months? Very thorough. Your own projections seem the most unique in terms of the shape of the plateau.
Anyway one question-
Of all the models represented there, which one best captures the ELM in some manner? Or at least measures the increases in domestic consumption by producers? How do you use the ELM for your own chart?

thanks, and welcome to Mr Learsy's blog which sometimes has very interesting commenting.
04:14 PM on 08/17/2009
GAB, Export Land Model (ELM) is not incorporated into any models. They look at overall global production. Imported oil would only be a factor when forecasting Supply available to individual nations.

Even at that, ELM is on the whole a flawed concept over the short & medium term. As was seen in Summer 2008, exports again flourished when the 2006 Inventory bulge was corrected by OPEC. The Severe Recession that hit 12 of the G-20 nations was over by the end of 2009Q2, and Exports will again set new records in the 2011-2015 time frame as Production rebounds.

ELM is also vulnerable to Demand Destruction realities in OECD nations. ELM will not be a discernable factor until after 2020. Its author and proponents will shortly be further marginalized.
06:50 PM on 08/16/2009
As an intimate user of IEA data, and agreeing with much of Raymond's post today, it is wise to remember that the Agency is a large organization. Albeit Birol & Tanaka often make questionable comments, the data from their stat dept is pristine and their projections are exemplary.

It seems that often the MSMedia articles on IEA contain cherry picked highlights and are slanted towards author bias. Almost no segments on the Nov 2008 World Energy Outlook release mentioned their forecast that All Liquids production will rise from 86mbd in 2008 to 107 in 2030. Instead, McPeaksters related with glee the narrowly defined 6.7 to 15-mbd/yr underlying decline. Not a single article mentioned that the overall headline Underlying Decline Rate Oberved for all liquids to 2030 is a mere 1.9%/yr.

Mr Learsy and i do differ on the speculation issue. Virtually all commodities suffered a once-in-a-lifetime spike last year. For crude, it was a perfect storm uniting Peak Oil rumours, tight surplus capacity, tight inventories & lotsa currency debasement. In our analysis at TrendLines Research, the latter three, as components of price, made up $18, $6 & $30/barrel respectively of the $134 USA contact crude price high of July 2008. Hedging/spec activity seems to cause $5/barrel spikes at most.
01:57 PM on 08/17/2009
So you are willing to believe in a 20 year forecast that is based on a linear DEMAND growth model?


"Not a single article mentioned that the overall headline Underlying Decline Rate Oberved for all liquids to 2030 is a mere 1.9%/yr."

Now you have to explain to me how a FUTURE decline rate can be OBSERVED today. As far as I know our physicists still have not invented anything resembling a time machine.

"Virtually all commodities suffered a once-in-a-lifetime spike last year."

Crude oil production has not increased since 2005:

How does that correlate with last year's economic downturn?
03:54 PM on 08/17/2009
Linear Demand has been 1-mbd/yr since 1970, albeit a growing population; a reflection of intensity (efficiencies). There is little evidence that IEA's projection is flawed considering the resource base upon it is founded. if their methodology concerns you, it should be noted that IEA has constructed its medium term forecast on bottom-up data since 2006. For planning purposes by stakeholders, this more important guide predicts extraction will be 90mbd by 2015.

Underlying Decline Rate Observed (UDRO) is a term i coined last year to identify the annual underlying decline loss after augmentation by Enhanced Oil Recovery (EOR). It would not be prudent for a modeler to forecast to 2030 w/o building in both an UDRO and resource constraints. Having said that, i have been a vocal critic of IEA's application of a 1.9% rate since November. My study of this loss factor indicates that UDRO has averaged 2.8& since its emergence in 1970. It is a cyclical phenomenom. The McPeakster hypothesis that it started at Zero in 2002 and has since skyrocketed to 9% is ludicrous and unfounded.

My own PS-2200 Scenario incorporates an UDRO that ranges from today's 3.1% to 4.8 by 2050. It is probable that annual UDO will overtake the annual new capacity trend of 3.5mbd in the coming decades. I currently foresee PEAK OIL in 2048 @ 103mbd and believe that IEA will be far short of its current long term target.
03:56 PM on 08/17/2009
Sorry KTM, but Regular Conventional Crude is not in plateau. Your link includes data that is tainted with non-conventional liquids (arctic & deep sea). RCC peaked in 2005 @ 68-mbd and is in terminal decline. It is a mere 61-mbd today and is only 72% of All Liquids production. It will be a mere 50% by 2030 as NGL & non-conventionals play an ever increasing role.