The Oil Drum and One Salient Oversight Look at Crude Oil Production

From The Oil Drum:

1) Crude oil – Latest available figures from the Energy Information Administration (EIA) show that crude oil production including lease condensates increased by 455,000 b/d from June to July. Total production in July was estimated at 73.28 million b/d, which is 1.01 million b/d lower than the all time high crude oil production of 74.30 million b/d reached in May 2005.

2) Total liquids – In September world production of total liquids increased by 450,000 barrels per day from August according to the latest figures of the International Energy Agency (IEA). Resulting in total world liquids production of 85.10 million b/d, which is 1.03 million b/d lower than the all time maximum liquids production of 86.13 million b/d reached in July 2006.

3) Status of the production plateau – Both the International Energy Agency (IEA) and Energy Information Administration (EIA) figures show that global liquids production has been on a plateau since 2005. The IEA figures result in an average global production in 2007 up to September of 85.03 million b/d, almost to the same as the average 2006 production of 85.00 million b/d and higher than the average 2005 production of 84.10 million b/d. The EIA puts the average global 2007 production up to July at 84.40 million b/d, slightly lower than the average 2006 production of 84.60 million b/d and the average 2005 production of 84.63 million b/d.

One Salient Oversight continues:

The “market” is made up of people throwing billions upon billion of dollars around, yet they have no knowledge of these statistics. Peak Oil will be a classic example of “Market failure” in the economics textbooks of the future. Had oil been priced appropriately these past 5-10 years by an informed market, the negative effects of such a correction would have been easier to bear and alternatives would have been sought by the market to mitigate the coming peak. Why was the market blind to this? There are many reasons, but the major one is that markets do not always make decisions based upon rational thinking – even markets that have trillions of dollars at their disposal.

As Bill Paxton said in Aliens: “Game Over Man!”


cactus here… I note one small mitigating factor… it may be with new refining technology, one gets more refined oil out of each barrel of crude, but I can’t see the, um, improvement being enough to compensate for that big drop either.