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Wednesday, April 25, 2012

An Update On Global Net Oil Exports - Is It Midnight on the Titanic?


The Association for the Study of Peak Oil & Gas, USA is hosting a series of online webinars, as a service to members. With a minimum donation of $100 (greater amounts are always appreciated), one can join ASPO-USA and have full access to the webinars, or you can pay a one time fee of $40.
I will be delivering the next webinar, Thursday afternoon. Art Berman will be delivering a webinar on May 17th, covering the shale oil plays in the US. For more info, go to http://www.aspousa.org/index.php/aspo-usa-webinar-series/
My thesis is that US oil industry continues to make a serious mistake by providing, in my opinion, wildly unrealistic scenarios for US and global crude oil production. For example, ExxonMobil has run ads stating that we won’t see a global production peak for decades to come, while Daniel Yergin tells us that the worst case is an “Undulating Plateau” many decades from now.
Unfortunately, since global annual crude oil production has been flat to down since 2005, the “Undulating Plateau” seems to arrived slightly ahead of schedule.
Global annual (Brent) crude oil prices doubled from $55 in 2005 to $111 in 2011, an average rate of increase of one percent per month, although actual prices have of course been above and below this trend line. The available production data over this time frame, from the EIA and BP, show that global crude oil production and global total petroleum liquids production have been virtually flat, with a slight increase in total liquids production of about 0.5%/year (inclusive of low net energy biofuels).
A study of the top 33 net oil exporters in the world, which account for 99% plus of total global net exports, and which we define as Global Net Exports of oil (GNE), shows that GNE fell from 46 mbpd (million barrels per day) in 2005 to 43 mbpd in 2010 (BP & minor EIA data, total petroleum liquids).
Furthermore, China and India (“Chindia”) have been consuming an increasing share of this declining volume of GNE. At the 2005 to 2010 rate of increase in Chindia’s combined net oil imports as a percentage of GNE, the Chindia region alone would consume 100% of GNE by the year 2030, 18 years from now. I define Available Net Exports (ANE) as GNE less the Chindia region’s combined net oil imports. Following is a link to a chart showing the 2002 to 2010 ANE numbers, along with where we would have been in 2010, at the 2002 to 2005 rate of increase in ANE.
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