Jet Fuel Prices WILL Be Climbing A LOT, and Soon

[jetflyer]

I do think the liquid fuel deficit will be a bigger deal than you, but oh well. It's getting late. So let's have that drink!
:beer:

 

[T-Bags]

"Did the Mexican oil company PEMEX CHOOSE to pump 500,000bpd less oil in 2006?
According to you, YES!!!! BS."

No, the mexicans are morons, and Pemex is a horribly managed government entity.
Would production have declined in Mexico if the country was open to unrestricted drilling by U.S. companies?

Oil production in Iran and Iraq has never recovered from the Iran/ Iraq war. Does that mean the vast reserves those countries had just vanished? Or does it mean it is sitting in the ground because the government is too incompetant to get it out? Is that "geology"?

When production drops because some idiots blow themselves up will trying to steal oil from a pipeline in Nigera, is that GEOLOGY?

When we haven't drilled in Somolia (so think their are huge reserves there) because the place is lawless, is that GEOLOGY?

Would Venezualen production be higher if Hugo Castro, i mean Chavez hadn't fired all the professionals in the industry and replaced them with cronies? Is that GEOLOGY?

Yes a faster decline hurts more than a slow decline. What real evidence do you have that we will see a rapid wordwide decline?

 

[jetflyer]

Oil importers will deal with larger declines.

Consider this from an earlier post. It is my explanation of the Export Land Model by Texas Geologist Jeffrey Brown:
Quote:

Originally Posted by Wiggums
Here are some numbers to consider. We consumed 7.593 billion barrels of crude oil in 2005. When peak oil hits the experts are looking at a decline rate of 3-7%. Taking the mid number, 5%, you are going to be short about 1 billion barrels per year in by the third year of the peak oil event.

Wiggums,
Since you read articles at the www.theoildrum.com blog have you learned anything about geologist Jeffrey Brown's (oil drum id: West Texas) Export Land Model?

It has actually been proven. It is also why the importers of oil are going to have to deal with instead of 5% declines something more like 10%.

The "Export Land Model" works like this:
Act like all the exporters of the world are one country. We'll call it Export Land.

This Export land produces 60 million barrels a day.
They export 40 mbd.
They consume internally 20 mbd.

--When the declines begin they will lose 5% per year from their production. So after one year their production drops from 60 to 57 mbd.
--Their internal consumption will continue to rise, especially since their economy is getting such an incredible boost because of the oil revenues, and consumption will climb like the exporters today are seeing at about 5% per year. So after year one their consumption has climbed from 20 to 21 mbd.
--End of year 1: Available oil to importers is down from 40 mbd to 36 mbd.
A loss of 10%!

--Year 2 production of Export Land down to 54.15 mbd
--Internal consumption of Export Land up to 22.05 mbd
--End of year 2: Available oil to importers down from 36 mbd to 32.1 mbd.
A loss of 10.8%!!!

I think I actually did a good job explaining that. Do you agree?

So because the Export Land model will probably be what happens to the world, we'll need more than DOUBLE (about 2.25 X) the 28 new coal to oil plants you came up with just to keep our energy level even!

We're not used to having level consumption, and level consumption alone is horrible for an economy.

Competition for these available exports will heat up tremendously between countries like the U.S. and China. This is why China is circling the globe to lock in long-term contracts.

Understanding the Export Land Model will make one understand that the problem will be even worse than they first thought.

A 10% decline rate for importers is scary as hell..........

The DOE Study didn't even consider the Export Land Model when they made their assumptions on future needs.

 

[jetflyer]

From Montequest at http://www.peakoil.com/fortopic20373.html+decline+rates

Recent projections indicate an 8% decline which would reduce production by 50% in less than 9 years.

Even Exxon says existing field decline is 4 to 6%

I am also inclined to believe we are past mid-point ( because of over-stated reserves) and, due to tertiary extraction methods, the decline will be quite steep.

And if these declines are any indicator...

#3 Cantarell in Mexico ~ 14%/year decline.

#2 Burgan in Kuwait ~ 14%/year decline.

#13 Prudhoe Bay in Alaska ~ 11%/year decline.

#12 Samotlor in Russia ~ 9% decline.

Saudi Arabia just admitted an 8% decline for their mature fields.

But we won't know until it is past.

Jet

 

[jetflyer]

From: Pup55 at http://www.peakoil.com/fortopic20373.html+decline+rates talking about a thread that can be found here:
http://peakoil.com/fortopic2748.html

We did something like this awhile back. We reviewed the production data for all of the countries that were post-peak and tried to deduce how steep the decline curve would be.

On average, the decline is about 6% for the first year after the peak, and usually after about 3 years post-peak, the proverbial average nation is pumping about 87% of peak capacity.

It remains to be seen whether or not future decline curves will be the same shape. When this year's BP Review comes out, we will have a chance to recalculate some of this.

 

[Secret Squirrel]

Lets see. They can get $20 a barrel to max out their current fields or they can pretend they are having a 6% decline which causes the market to freak out and prices to jump to $70 a barrel for doing less work. Sounds like the answer to your question right there. What incentive is there for countries/companies to flood the market with more oil than is needed. NONE!!! IT IS A CARTEL. THESE COUNTRIES CONTROL THE PRICE OF OIL BY CONTROLLING THE AMOUNT PUT ON THE MARKET!
It is the same as the diamond industry. Diamonds are not as rare as some other minerals. But they become rare when one company controls the mining and distribution to the rest of the world. If Debears was to dump diamonds on the market the price would drop and they would make LESS money for putting MORE diamonds on the market. Business 101.

 

[T-Bags]

From Montequest at http://www.peakoil.com/fortopic20373.html+decline+rates


Jet

Despite all the horror of production rates falling that much at CERTAIN FIELDS, worldwide oil production has stayed relatively flat. THAT'S THE POINT!!

 

[jetflyer]

IT IS A CARTEL. THESE COUNTRIES CONTROL THE PRICE OF OIL BY CONTROLLING THE AMOUNT PUT ON THE MARKET!

Squirrel,

OPEC were the big, bad guys in the 1970's but ever since their goal has been to keep the price low enough that people do not swith to alternatives to oil.

If people would have switched to alternatives in the 1970's then 75% of their oil would not have been needed.

The 8% decline they admitted to was in their mature fields. This is common across the world. They have to bring on new oil to replace the mature fields. Nothing new there.

Their incentive is to keep the price of oil low right to peak oil. They have really lost control of price these last TWO YEARS, because OPEC has been pumping 100% all this time. There is no more spare capacity.

So if they kept oil prices low right to their peak, then Saudi has 50% of their oil left.
Also it coincides with a world peak and according to the DOE report, prices will now skyrocket.
So Saudi has now gotten the world to a point where Saudi will profit tremendously from the last 50% of their oil at tremendous profits.

So greedy OPEC does much better after peak, even though the production after peak will be getting less and less each year, and they ensure buyers for 100% of their oil.

When you hear it like that you can see that OPEC's greed can be seen in a different light huh? They didn't care about the world economies after peak, because they knew they'd have buyers after peak. So they didn't care about warning the world and had incentives to lie about how much oil they had.

 

[jetflyer]

Despite all the horror of production rates falling that much at CERTAIN FIELDS, worldwide oil production has stayed relatively flat. THAT'S THE POINT!!

Good point.

But we're at the point, like in the U.S. was at in 1970, for the world right now, where all the fields are pumping full tilt and production is staying flat.

As you know then U.S. production started declining. The U.S. didn't want production to decline! They started doing enhanced oil recovery, in-field drilling, searching everywhere for new fields. Yet production continued to fall and water-cuts in fields crept up.

In 2004, Chevron said 33 out of the major 48 oil producing countries are past their peak oil and in terminal decline( www.willyoujoinus.com supply section).

Now if you add Mexico, Saudi, and Kuwait that have just joined that list it goes to 36 out of 48 that are past their peak.

Some countries are still adding a lot of oil (Brazil, Angola, Nigeria, etc.), or are past their peak but keeping production from falling too much by adding new fields.

The major point of peak oil is that there is a tipping point where the additional Oil Projects will not be enough to keep oil production for the world from falling by 1%. (2007?)

Then the next year the additional oil projects won't be able to keep the oil production from falling 2%. (2008?)

When more and more fields go in to decline or when more countries join the 36 out of 48 past their peak eventually production will fall and the fall will accelerate atleast for the first couple years, while the price skyrockets, and this will stimulate the alternatives to start.

Then and only after the price spikes, because we chose not to be preemptive on peak oil, alternatives will start to come to market.


Read this from a Coal to Oil website on the potential of Coal to Oil and other alternatives to prevent Peak Oil:
http://www.ultracleanfuels.com/html/peaking.htm

If peak oil is now, there will be a liquid fuel shortage while mitigation measures are ramped up according to the above site which references the DOE study.
After 10 years of Crash Programs these are supposed to be best case scenario additions to oil supply:

-Vehicle Efficiency will contribute the equivalency of 2 mbd of oil.

-Gas to Liquids will contribute the equivalency of 2 mbd

-Heavy Oil/Oil Sands will contribute the equivalency of 8 mbd

-Coal Liquids will contribute the equivalency of 5 mbd of oil

-Enhanced oil recovery will contribute the equivalency of 3 mbd of oil

But if declines were an average for the first 10 years 5% then we'd have lost 35 million barrels a day from our current 85 mbd. The above 20 mbd from crash programs wouldn't have overcome the declines.

This leaves the world with a substantial Liquid fuels deficit.

Also you can't consider what it takes to make the world have LEVEL oil consumption. The world desires climbing oil consumption.

So at a 2% climb in desired consumption for 10 years the world would desire 104 MBD in 2017.

So anything causing oil production to not climb is also bad(why the price is 6 times more expensive now than in 1998)

Eventually the crash programs and other forms of transportation will arrest the declines and our way of life with climbing energy consumption will continue.

The DOE Study says that the liquid fuels deficit will be over 20 years though if alternatives are started at peak oil.

The earlier we start and the more effort we give it, the sooner we can get back to the good living again.

This is why I've been writing my Congressman and telling people. I was hoping to help spread the Peak Oil word so we could get to the good times sooner, and hopefully before the declines began. I think we're too late for that though, but we still have to start NOW trying to replace oil and hard.

Who doesn't want "GOOD TIMES!" I know I do!! That's why I'm talking about this!

Those are my points....
Jet

 

[Secret Squirrel]

Additionally, Saudi Arabia’s key oil and finance ministers assured the audience — which included US Federal Reserve Chairman Alan Greenspan — that the Kingdom has the capability to quickly double its oil output and sustain such a production surge for as long as 50 years.

So you are saying it is big conspiracy and every nation is pretending to have more oil so they can continue high production? I am not denying that we are in a precarious situation and it could impact our economy because we currently rely so much on the middle east for its oil, but peak oil seems like more of a conspiracy theory than any other theory. We know so little about crude oil and where it comes from, how it formed. Wells run dry and replenish themselves for no apparent reason. And I would say it is more likely that the world oil market is tighter controlled than most lay people are lead to believe. It takes a lot of money to start oil exploration/development. There is a lot of incentive for the current leaders in the oil industry to delay developments of new markets. It is called supply and demand. A slow increase in supply which barely keeps up with demand will keep profits high. Ten years ago OPEC was giving their oil away for $16 a barrel because they were producing too much. That will not happen again. It is easier for them to perpetuate a PEAK OIL scam then it is for them to say they are cutting production to increase price because one of their princes wants a A380 as a private jet.