First VW Polo BlueMotion to have gasoline-fueled TSI technology; new 3-cylinder engine, 57 mpg
DOE to seek emerging technology with “FY 2015 Vehicle Technologies Office Incubator” funding opportunity

IEA says oil supplies may not keep up with demand

by Nick Cunningham of Oilprice.com

Despite what appears to be a saturated oil market in 2014, oil producers around the world will struggle to meet rising demand over the next few decades. In its latest annual World Energy Outlook, the International Energy Agency (IEA) warned that the current period of oil abundance may be fleeting, and in fact, without heroic levels of production increases, oil markets will grow dangerously tight in the coming years.

Global oil demand is expected to increase by 37 percent by 2040, with a dominant proportion of that coming from developing countries—i.e. China and India. In fact, the IEA says that for every barrel of oil the industrialized world expects to eliminate from demand through efficiency or other ways of reducing demand, developing countries will burn through two additional barrels.

The IEA predicts that the world will need to extract an additional 14 million barrels of oil per day (bpd) by 2040, which comes on top of today’s production levels of about 90 million bpd. While there is a lot of triumphalism in the United States about shale oil production and how places like the Bakken and the Eagle Ford have ushered in an era of abundance, the IEA says that tight oil production in the US—along with Canadian oil sands—will only last until the mid-2020s.

After that point, when the shale revolution peters out, oil markets revert to their old ways—that is, looking to the Middle East once again to meet global demand. And that should raise some alarm. Saudi Arabia will remain one of the largest and most important oil producers in the world, but it probably won’t be able to ramp up production much beyond its current levels. There is some slack production in Iran, due to western sanctions, but even when it returns to the fold it likely will only make a small contribution to oil production growth in the long-term.

Instead, much of the world’s hopes are pinned disproportionately on Iraq. A year ago, after the IEA released its 2013 WEO, I wrote about how the IEA was placing a surprising amount of faith in the ability of Iraq to scale up its oil production. For several years, the IEA predicted that Iraq would be able to triple its output from 3 million bpd to around 8.3 million bpd by 2035. Under that assumption, oil prices would rise only a modest amount over that timeframe.

That would have been a monumental task even before the country began unraveling in June 2014. Since then, Iraq has been plunged back into a state of war. The prospect that it can be put back together, and the requisite levels of capital investment can be put into its oil sector in order to add 5-6 million bpd over the next 20-30 years, appears fanciful to say the least.

An estimated $900 billion will need to be deployed each year beginning in the 2030s to bring enough oil online to meet global demand. But the IEA also cautions that replicating the tight oil boom in the United States will be very difficult. Different geological conditions could pose some problems, but the long lead times and opposition to drilling will also slow development in much of the world.

Unlike last year, this time around the IEA appears to be more concerned. “A well-supplied oil market in the short-term should not disguise the challenges that lie ahead, as the world is set to rely more heavily on a relatively small number of producing countries,” the IEA Chief Economist Fatih Birol, said in a press release. And in its WEO Fact sheet, the IEA declares “the task of bringing production above 100 mb/d rests on a fairly limited number of shoulders.”

Source: http://oilprice.com/Energy/Crude-Oil/IEA-Says-Oil-Supplies-May-Not-Keep-Up-With-Demand.html

Comments

Engineer-Poet
Using the starch in corn grain and sorghum makes ethanol while it still makes distillers grain feed for livestock minus the starch which is healthier for the animals.

DDG is toxic to livestock, both for sulfur content (metabolized to poisonous H2S, which causes polioencephalomalacia) and mycotoxins.

I have pointed out these facts many times here, no one can dispute them because they are facts.

Not just disputed, refuted.

Engineer-Poet
in a democracy, if the people think THEY are right and you are wrong, effectively and morally, you ARE wrong.

The popular vote does not change facts.  Not about evolution, not about vaccines, not about toxicity, not about climate.  A 90% landslide vote of morons for a faulty policy will still be morons voting for a faulty policy.

SJC

EP just repeats what people say in italics, but does not come up with his own solutions. Narcissists must destroy others so they stand out.

Engineer-Poet

You mad, bro?

SJC

Corn based distillers grains from the ethanol industry are commonly sold as a high protein livestock feed that increases efficiency and lowers the risk of subacute acidosis in beef cattle.

http://en.wikipedia.org/wiki/Distillers_grains

God help anyone who is your "bro".

Calgarygary

The article from oil price says that the demand for oil is expected to increase by 37%, however, if you check the IEA fact sheets it says the demand for "energy" is expected to increase by 37% while the supply of oil is expected to increase by only 15% 14 million barrels, a CAGR of about 0.5%. The slower growth in oil demand/(supply?) as opposed to energy demand is attributed to improvements in efficiency and alternative technologies. I don't think this is a good news story for oil companies. Recent long term forecasts by Exxon, Shell and Statoil had growth in oil demand till 2040 at 1% CAGR. Oil companies need steady growth in demand to sustain prices and 0.5% is getting close to zero growth or even negative growthg.

Oil companies are likely to be more optimistic about future growth than the IEA, however, even the IEA must be cautious about what factors they consider when making their forecasts. The optimistic forecast for batteries is $100 per KWH which would have major implications on BEV's, PHEV's and solar electricity generation, but I doubt if they can fully consider those technologies in their forecasts

There are so many new technologies out there with potential to nibble away at future oil demand and now with the agreement between USA and China it seems likely that some of these technologies could be accelerated. The biggest obstacle to growth in oil supply will be the confidence of oil companies to make long term investments in expensive projects like the oil sands or deep offshore.

Contrary to peak oil theorists it is my opinion that there is lots of oil available for development at the right price. I came across and article in the oil and gas journal that was published this summer where the author estimates the recoverable reserves in the Athabasca oil sands and the underlying grosmont limestone was 858 billion barrels. This is 5 times the official 2007 estimate in wikipedia. The basis of the difference probably lies in the assumed price which was close to $100 this summer. You could produce 90 million barrels per day for 25 years and still have some left over.

Engineer-Poet

Ah, Wikipedia is your bible.  That explains a lot.

You know, posting all your butt-hurt here does a public service:  it calls more attention to my corrections of your misinformation.

Arnold

I wouldn't have made comment as I thought it was obvious, but if I had I could not have said it better E.P.

and sadly the majority are not known for getting it right = dangerous world for minorities.

Roger Pham

@Calgarygary,

>>>>"The slower growth in oil demand/(supply?) as opposed to energy demand is attributed to improvements in efficiency and alternative technologies. I don't think this is a good news story for oil companies. "

That "alternative technologies" could be synthetic liquid fuels from Renewable H2 combined with waste biomass during HydroPyrolysis, and in H2 piping and dispensing infrastructure itself. If the energy companies (aka oil and gas companies) would slow down current oil and gas drillings while investing in "alternative technologies", they for sure will come out as prosperous as ever.
Sooner or later, oil and NG will run out anyway, so the question is not if, but when!

HarveyD

Globalization is here to stay. GHG and climate changes affect all countries. We cannot ignore what is going on worldwide any more.

For example, Canada has enough soft coal, NG and oil from various sources, including from oil sands, to satisfy the local market for 500+ years.

The only problem is increased GHG and pollution emissions. With the prevailing winds, our good South of the border neighbors will get 80%+ of the GHG and pollution we will create for the next 500+ years.

The American mid-west is not very polluted, so they may not notice the extra pollution from Canada for many years. When they do, they may not like it that much?

Calgarygary

@Roger

The big companies have dabbled in alternatives but so far they have not been profitable. It may be different going forward? Investors may have a lot of influence if they decide give up on oil and gas companies because of an uncertain future

Kodak is often given as an example of a company that could not adapt to change. How things play out in the oil and gas game will be complicated by international cartels and agreements but I expect that in my lifetime gasoline will be referred to as a legacy fuel. That doesn't necessarily benefit me personally but that looks like the way its going.

Roger Pham

@Gary,
The market shares of plugged-in vehicle (PEV) are far too small to make any dent in reducing GHG from the transportation sector. It will be faster to replace petroleum with renewable biosynthetic fuels, since the refining and distribution infrastructure is already here. Recent new advancements in biosynthetic fuel technology will make it cost competitive with petroleum. If not, a national mandate for increasing renewable energy content of future fuels, electricity, and hydrogen will get the job done without dictating what kind of cars consumers must choose.

Calgarygary

@RP

I guess you are referring to the article about the Purdue H2BioOil? Like so many others it may not be the real deal but it sounds promising. It also seems that it could scale up pretty quickly if they project that mobile plants will be viable. I wonder how much gasoline they could produce in say North America?

Engineer-Poet

It's much easier to cut GHGs by making vehicles more efficient than using biofuels.  Hybridization is a proven way of doing this.  Once you've got a hybrid, it's a small thing to top up the battery from grid power between trips; you have full control of the charging rate, so it can probably go to a higher SOC than normal operation would allow; even if you only get 1 mile of range that way, it's a mile that doesn't burn liquid fuel.  You can also pre-warm the engine and pre-condition the cabin.  So long as your grid power is clean, this will cut GHGs.

Roger Pham

Good point, EP.
Since energy supplies will likely be limited in the foreseeable future, continual efforts must be maintained to make vehicles more and more energy efficient in order for any energy policy and planning to work.

ToppaTom

“The popular vote does not change facts. Not about evolution, not about vaccines, not about toxicity, not about climate. A 90% landslide vote of morons for a faulty policy will still be morons voting for a faulty policy.”

Of course.

But what makes you think that the 10% are NOT the morons.

Was the majority, that put this administration in power, morons?

Oops; recent history supports you there.

But now that the original majority morons are fewer, are they automatically the enlightened minority.

Ridiculous.

Common sense rule: The group (majority or minority) that strives to impose its will on the others, are the immoral morons. .

And that is why the people turned their backs on you.

It was that and your blind faith and arrogant belief that only you are right and obligated to impose your will on others, even when only 10% of the people agree with you

Engineer-Poet
But what makes you think that the 10% are NOT the morons.

If their views and policy prescriptions are consistent with the facts.

But now that the original majority morons are fewer, are they automatically the enlightened minority.
Ridiculous.

Yes, ridiculous.  Because you are subscribing to the majoritarian fallacy, and took no account of what the facts say.

Common sense rule: The group (majority or minority) that strives to impose its will on the others, are the immoral morons.

If the minority strives in the face of majority resistance to eradicate smallpox by vaccination, or kuru by eliminating cannibalism, they are neither wrong nor immoral.  Now shut up and learn something instead of rearranging your prejudices.

ToppaTom

You continue to say the facts are what matters yet repeatedly fall back on IF.

"If their views ... ".

"If the minority strives".

Your philosophy is all about IF; not even what IF, which would indicate a grasp on reality.

Facts are like; "European residential electricity prices have historically exceeded U.S. prices, and the gap has widened in recent years. Regulatory structures—including taxes and other user fees, investment in renewable energy technologies, and the mix and cost of fuels—all influence electricity prices."

IFs are fantasy, like "If the minority strives in the face of majority resistance to eradicate smallpox by vaccination, or kuru by eliminating cannibalism".

Brotherkenny4

Renewables and other alternatives can do everything we want except keep the same people rich. Thanks politicians for being weaklings and helping only the masters of industry. You knew that we all really wanted to be slaves to these hideous monsters. Thanks for giving us what we didn't know we needed.

Engineer-Poet
You continue to say the facts are what matters yet repeatedly fall back on IF.

That's correct.  Right is not on the side of the majority or the minority, it's on the side of whoever has the truth.  I know "truth" is a difficult concept for you, but try to follow me here.

Your philosophy is all about IF; not even what IF, which would indicate a grasp on reality.

You also need to work on your reading comprehension.

IFs are fantasy, like "If the minority strives in the face of majority resistance to eradicate smallpox by vaccination, or kuru by eliminating cannibalism".

As a matter of fact, there WAS resistance to eliminating cannibalism in Papua/New Guinea, but eventually it was halted and the prion disease kuru was wiped out.  And currently there IS resistance to polio vaccination in the last few places where it is endemic, which prevents it from being eradicated just as smallpox finally was.

In other words, you fell into my trap.  I'd ask you if you felt foolish, but the Dunning-Kruger effect pretty much eliminates any chance of that no matter how wrong you are.

ToppaTom

No, no, Bro K.
The politicians and masters of industry do not GIVE us anything.

They SELL it.

They sell it to those that WANT to BUY it.

If it is worthless to you, you might call the buyers slaves, but actually they might value it. Maybe you don’t want them to have it, but they might not want to help you pay for a hybrid either.

I think those who buy what you don’t like have the better case and exhibit more regard for the rights of others.

And EP, you are such a disappointment.
You say; “As a matter of fact, there WAS resistance ... And currently there IS resistance”.

RESISTANCE? There is always resistance; to most anything; but that is NOT A MAJORITY.

The majority does not want to retain cannibalism here, nor I suspect, in Papua/New Guinea nor did Papua/New Guinea's cannibals figure into the 90% in our last US elections.

Nor does the majority want to abandon polio vaccination.

And this illusory superiority of the minority is symptomatic of the incompetent. Striving to dictate what others buy, eat and say.

Engineer-Poet

I'd suggest you keep fighting that straw man, since it can give you all the battle your mental wherewithal is capable of dealing with.

D

You poor, poor Doomsday lads. You have to cluster together as fewer and fewer accept your teachings.

Your Club of Rome Bible has turned out to be full of bad prophecies, and errors.

The era of genuine clean and inexhaustible energy draws closer everyday, as progress on controlled Fusion accelerates from Science research, to Engineering of fusion power plant designs.

The human population growth slows and stabilizes, as more and more billions join the western civilized technological world.

Every effort you take to keep them dumb, ignorant and down on their subsistance farms fails, despite your every effort.

Your effort to insist that every raw material is is danger of depletion, when all are becoming more inexpensive and widely available, even planetary hydrocarbons. Julian Simon has defeated and won his bet with Paul Erlich.

Abiotic sources of hydrocarbons are forcing western geologists to agree with Russian geologists that petroleum is now being found and recovered at depths that predate any planetary life.

So its not sourced from dynosaur remains, and is enormously more abundant than expected.

The comments to this entry are closed.