Jet Fuel Prices WILL Be Climbing A LOT, and Soon

[T-Bags]

"These countries can increase GDP with declining oil consumption:
South Korea
Germany
Russia
Italy
United Kingdom'

Ummm, NO!

While many of those countries may have increased GDP during a period of decreased oil demand, it does not mean there is some magical relationship. For example, some of these countries may have made a transition from oil fired powerplants to other sources. Our oil use is primarily for transportation, and I'd be willing to bet a large portion of that is discretionary. Here's a little quizzy for you.

True or False:

1. During the first 4 years Darth Bush's administration, oil consumption int he US went up drastically, dwarfing the increase during the administration of the Saint Clinton. As a matter of fact, oil consumption decreased during Saint Clintons second term.

2. Oil production peaked in 2001. Since then oil production has declined significantly each year due to either OPEC cuts or real supply issues.

3. No new reserves are being found and we now see a decrease in proved reserves each year.

Key
1. False. U.S. Oil consumption in 1992 was 17.033 million BPD. In 1996 it was 18.309 MBPD in 2000 it was 19.7 MBPD and in 2004 it was 20.732 MBPD. Do the math. It appears the Dems controlling the White House is the WORST thing that can happen to oil consumption. If that weren't enough, oil consumption WENT DOWN during GHWB's administration, and was FLAT (slight decrease) during the 12 years beforre Clinton took office. This was during a period of HUGE economic growth in the US. Prior to the Reagan Admin, Carter saw a huge INCREASE in oil consumption, until his last year in office.

2. False. Oil production in 2000 was 74.941 MBPD and decreased to 74.382 MBPD in 2002. In 2005 it was 81.088 MBPD. That's about a 9% increase inproduction. IMPOSSIBLE!! PEAK OIL IS HERE!!

3. False. Proved oil reserves: 1985 770.4 Billion BOE 1995 1027.0 BBOE 2005 1200.7 BBOE

 

[jetflyer]

T-Bags,

Great points again... You are a wealth of knowledge for sure. It's nice chatting with you.

As the economy grows so does oil consumption in the U.S. Since 1983 after the oil shocks were over, the U.S. did become less dependent on oil to increase GDP. We cut our dependence in half the number of new barrels required to increase GDP by one dollar.

Where do you get that oil production peaked in 2001? That would be crazy.

We'll also find oil in 2030, but will the new oil coming online then replace the fields in decline?

Jet

 

[inline]

Hi!

Currently, to make oil from shale, natural gas is used is used in the process.

Canada has a TON of oil shale, but to convert it to oil would take ALL the natual gas in N. America.

I don't think it's a question of cost, it's a question of energy usage to make the shale oil.

With our current energy and global warming situations, renewable evergy is the ONLY way to go.

We nee an Apollo type program funded by the government, to the tune of $100B over 10 years, to develop renewable sources so we don't have to buy ANY foreign oil, and we can pull our troops out of the ME.

cliff
LRD

Wouldn't have to buy nearly as much foreign oil if democrats would let us build more refineries and drill for more oil........right here in the U.S. There hasn't been a new refinery built in the U.S. in over 30 years.

 

[jetflyer]

The article that started this thread by ATPCliff was about the Ghawar Oil field of Saudi Arabia and if it was in decline. If it is in decline, Saudi Arabia is in decline and probably the world.

Here is another article questioning the largest oil field in the world, Ghawar:

From an article entitled, "The Ghawar Oil Field: How Much is Left?" comes some proof that Ghawar may have peaked:

"Not surprisingly, there was widespread concern -- even alarm -- over a 2005 report by a major bank which indicated that Ghawar had peaked. Analyst Don Coxe, working for the Bank of Montreal, became the first representative of a major financial institution to state unequivocally his belief that Ghawar was in irreversible decline. The Canadian bank analyst did not mince words: "The kingdom's decline rate will be among the world's fastest as this decade wanes... Most importantly, Hubbert's Peak must have arrived for Gharwar, the world's biggest oilfield.""

"According to industry experts a few months ago Ghawar was producing 55 percent water -- in other words, more than half of the fluid brought to the surface was not oil. In fact, a number of signs clearly indicate that Ghawar is in decline. Back in April 2006, a Saudi Aramco spokesman admitted that its mature fields are now declining at a rate of 8 percent per year. "

Then there is a peak at the bigger picture: "So, if Ghawar is confirmed to be in decline, it likely means that the entire world is as well. Of the four oil "super-giant" oil fields, three are officially in decline: Mexico's Cantarell, Russia's Samotlor, and Kuwait's Burgan. Though Ghawar has not "officially" been so declared, the implications of the facts noted above are clear."

Having the four major oil fields of the world all go into decline when they were all increasing production a few years ago is going to be devastating to the world. The impact will be felt especially hard when their declines all begin to accelerate like Cantarell's, the North Seas or Australia's. Cantarell alone lost 500,000 barrels of oil last year. PEMEX even admits it will probably lose another 500,000 this year.

That Jack field in the Gulf that is supposed to produce oil in 2015? It is not even going to replace this loss from Cantarell that has occured in 2 years, 8 years from now.

Ghawar's field also like Cantarell has been using advanced oil recovery techniques this last decade, which has been found like in the Red Sea, Australia, and Cantarell to cause decline rates in the mid double digits after peak. When Ghawar goes it will go fast......

There is some speculation that the Saudi cuts have occurred because Saudi Arabia simply cannot maintain current levels of production. IF Ghawar has peaked and is now in terminal decline (a decline which will most likely accelerate as time goes on) we could be looking at a serious energy crisis unfolding just within the next few years. Although some peak oilers look to 2010 as the time for the peak new evidence is coming in that maybe, just maybe, we have already crossed the peak and are now on the downslope. Westexas from the OilDrum.com stated that "I estimate that net oil exports by the top 10 net oil exporters are down by about 8% from 11/05 to 11/06."

You should go to the www.theoildrum.com blog and read forecasts from the "Export land model". Importers like the United States are going to have to compete with other importers on price for for net-exports whose decline will be on the magnitude twice as high as world oil production decline because oil exporters' economies will continue to thrive causing their internal consumption to continue to increase at incredible rates.

The Bottom line is net oil exports available to importers like the U.S. will diminish much faster than overall oil production.

Jet

 

[jetflyer]

Wouldn't have to buy nearly as much foreign oil if democrats would let us build more refineries and drill for more oil........right here in the U.S. There hasn't been a new refinery built in the U.S. in over 30 years.

Refineries are increasing their ability to refine more oil by expanding existing facilities because like you said they can't build new ones. This is a non-factor. A lot of them are switching to refine more heavy sour oil which is what is left as light sweet oil has already peaked.

You're right we need to drill in Alaska, off both coasts, in my Grandma's back yard if we have to!!

The problem is it won't matter much for the world or even the U.S....
ANWAR is supposed to provide 5% of our oil in 2016. This will not even replace domestic delines, let alone world declines...

You do realize we used to be the largest oil producer of the world in the United States and now we have declined by half. There are some fields that can stop our decline, but probably not increase it because there is just such a massive amount of oil production going down year over year in the U.S. We only produce 1/3 of the oil we need. We are very addicted to foreign oil and this will not change in decades.

But we can't give up and the more coal we turn to oil, the more shale, tarsands, etc. and the faster we do it the easier the transition to a post-easy to pump oil world will be.

We'll probably just go to war though, since the declines for the world are probably here now.....

Saudi: 9.5 to 8.7 steadily in a year.
The World: Flat production since December 2004 at around 84-85 mbd.

Can Saudi and the world increase in 2007? That is the question on every oil analysts mind right now. No one is sure. Not even T-Bags.

Jet

 

[Usual Suspect]

The US has 0.60 billion people and consumes 28 barrels per person per year - India and China have 2.4 billion people(+-) and consume less than 1.7 barrels per person per year.

Jet

The population of the US is about 300 million, which if expressed in billions would be 0.30 billion, not 0.60 billion.

 

[jetflyer]

Usual Suspect,

Thanks I shouldn't have been posting past 3 in the morning!

Jet

 

[G100driver]

And that's why several flight departments parked large portions of their fleet and laid pilots off when oil was up around eighty? Rich people are no different thatn you or I, if it's going to increase their costs noticably, some will stop doing it or slow down.

They did? I am sure that was an excuse. Until the price of corporate aircraft and orders drop those are isolated instances as opposed to a trend.

 

[G100driver]

Usual Suspect,

Thanks I shouldn't have been posting past 3 in the morning!

Jet

Burning the midnight oil I see .... yuk yuk yuk yuk :bomb:

 

[G100driver]

Wouldn't have to buy nearly as much foreign oil if democrats would let us build more refineries and drill for more oil........right here in the U.S. There hasn't been a new refinery built in the U.S. in over 30 years.

With no competition and record profits WTF would you build more refineries?

Ask your republican friends how allowing buyouts/mergers and subsiquent closures of refineries have lowered prices?

 

[T-Bags]

With no competition and record profits WTF would you build more refineries?

Ask your republican friends how allowing buyouts/mergers and subsiquent closures of refineries have lowered prices?

Then ask your Dem buddies who was president and who's justice dept approved those mergers... I'll give you a hint. It starts with C and ends with linton.

The problem is idle refinery capcity, just like parked airplanes, doesn't make money. Why would any oil company keep idle capacity? We prob need to offer some incentive to oil companies to have excess capacity. I doubt it could happen for political reason.

Jetty, Your buddy Deffeyes told me in 2005 that oil production had already peaked....

 

[T-Bags]

• 1879 -- US Geological Survey formed in part because of fear of oil shortages.
• 1882 -- Institute of Mining Engineers estimates 95 million barrels of oil remain. With 25 milliion barrels per year output, "Some day the cheque will come back indorsed no funds, and we are approaching that day very fast," Samuel Wrigley says. (Pratt, p. 124).
• 1901 -- Spindletop gusher in Texas floods US oil market.
• 1906 -- Fears of an oil shortage are confirmed by the U.S. Geological Survey (USGS). Representatives of the Detroit Board of Commerce attended hearings in Washington and told a Senate hearing that car manufacturers worried "not so much [about] cost as ... supply."
• 1919, Scientific American notes that the auto industry could no longer ignore the fact that only 20 years worth of U.S. oil was left. "The burden falls upon the engine. It must adapt itself to less volatile fuel, and it must be made to burn the fuel with less waste.... Automotive engineers must turn their thoughts away from questions of speed and weight... and comfort and endurance, to avert what ... will turn out to be a calamity, seriously disorganizing an indispensable system of transportation."
• 1920 -- David White, chief geologist of USGS, estimates total oil remaining in the US at 6.7 billion barrels. "In making this estimate, which included both proved reserves and resources still remaining to be discovered, White conceded that it might well be in error by as much as 25 percent." (Pratt, p. 125. Emphasis added).
• 1925 -- US Commerce Dept. says that while U.S. oil production doubled between 1914 and 1921, it did not kept pace with fuel demand as the number of cars increased.
• 1928 -- US analyst Ludwell Denny in his book "We Fight for Oil" noted the domestic oil shortage and says international diplomacy had failed to secure any reliable foreign sources of oil for the United States. Fear of oil shortages would become the most important factor in international relations, even so great as to force the U.S. into war with Great Britain to secure access to oil in the Persian Gulf region, Denny said.
• 1926 -- Federal Oil Conservation Board estimates 4.5 billion barrels remain.
• 1930 -- Some 25 million American cars are on the road, up from 3 million in 1918.
• 1932 -- Federal Oil Conservation Board estimates 10 billion barrels of oil remain.
• 1944 -- Petroleum Administrator for War estimates 20 billion barrelsof oil remain.
• 1950 -- American Petroleum Institute says world oil reserves are at 100 billion barrels. (See Jean Laherre, Forecast of oil and gas supply)
• 1956 -- M.King Hubbard predicts peak in US oil production by 1970.
• 1966 - 1977 -- 19 billion barrels added to US reserves, most of which was from fields discovered before 1966. (As M.A. Adelman notes: "These fields were no gift of nature. They were a growth of knowledge, paid for by heavy investment.")
• 1978 -- Petroleos de Venezuela announces estimated unconventional oil reserve figure for Orinoco heavy oil belt at between three and four trillion barrels. (More recent public estimates are in the one trillion range).
• 1980 -- Remaining proven oil reserves put at 648 billion barrels
• 1993 -- Remaining proven oil reserves put at 999 billion barrels
• 2000 -- Remaining proven oil reserves put at 1016 billion barrels.

I guess since a couple government beaurocrats say it, it must be true....

 

[jetflyer]

What? You obviously don't realize what I'm saying.

The DOE and the Army study do NOT say when peak will be. Well the Army study says it is near and so does the DOE, but neither gives a date. They just say what is likely to happen if it happens in certain time periods.

Deffeyes, my buddy? You obviously know there are many, many figures in the peak oil predicting field. I like Jeremy Legget, Matthew Simmons, and Richard Heinberg. I couldn't even pick Deffeyes out in a criminal lineup and really haven't read anything of his.

One thing Deffeyes says may be true though. 2005 is still the peak of oil production for Crude Oil + Condensate and Crude Oil + NGL. Deffeyes said his peak estimate was for conventional crude+condensate only, not including "ALL LIQUIDS" so he's correct so far, since May 2005 was the peak for this measurement.

All Liquids counts natural gas liquids, condensate, refinery gains, ethanol, etc.

Crude oil is definitely in decline. The question is can it increase in the future with the four major oil fields of the world just passing their peak oil?

From http://www.theoildrum.com/node/2300 :

An update on the latest production numbers from the Energy Information Agency:

1. Monthly production records are unchanged:
   1. All Liquids: the peak is still July 2006 at 85.47 mbpd, the year to date average production in 2006 (11 months) is 84.59 mbpd, up 0.01 mbpd from 2005.
   2. Crude Oil + NGL: the peak date remains May 2005 at 82.08 mbpd, the year to date average production for 2006 (11 months) is 81.40 mbpd, down 0.03 mbpd from 2005 (11 months).
   3. Crude Oil + Condensate: the peak date remains May 2005 at 74.15 mbpd, the year to date average production for 2006 (11 months) is 73.48 mbpd, down 0.09 mbpd from 2005 (11 months).
   4. NGPL: the peak date remains February 2005 at 8.05 mbpd, the year to date average production for 2006 (11 months) is 7.92 mbpd, up 0.06 mbpd from 2005 (11 months).
2. No major revisions on the previous monthly estimates in this month release.
3. Weak growth continues: November 2006 estimate for crude oil + condensate is 73.41 mbpd compared to 74.11 mbpd one year ago.

So, so far Deffeyes is right, T-bags. Let's hope he becomes wrong. I don't think he will be though. Not from what I'm seeing in Mexico, Kuwait, and possibly Saudi Arabia......

If we are at peak oil, then what the Army Study says about resource wars for oil, will definitely be our future.


Jet

 

[jetflyer]

T-Bags,
I've finally realized what you're hung up on. Reserves. Reserves of conventional oil matter much more than reserves of unconventional oil.

Plus production is what really matters with peak oil, not reserves.

You also realize it has been proven that the Middle Eastern countries LIE about their reserves and that their reserves never go down even though they pump oil every day of every year.

Last year it was proven from internal Kuwaiti memos after their Burgan field passed its peak oil that KUWAIT did not have the around 99 BILLION barrels of oil reserves left, but more like 49 BILLION barrels. So in one day their reserves halved.

This is most likely the case in Saudi Arabia as well, where there has not been a significant oil find since the "Hawtah Trend" in the early 1990's. They still say they have around 260 billion barrels of oil, when almost everyone knows that number is around 100 billion.

Why the lie? In the 1980's an OPEC accounting rule required the countries to only produce a certain percentage of Barrels per day according to what the OPEC countries reserves were. Every OPEC country then showed significant increases in reserves over the next few years so they could pump at their maximum rates to maximize short term profit. Their reserves also never go down even as fields deplete.

Scalability problems of volume and time as well as low Energy Returned on Energy Invested (EROEI) are why unconventional oil(tar sands and oil shale) will have such a hard time filling the gap once conventional oil begins its massive decline which may have begun forever in 2005 like your buddy Deffeyes predicted.

The DOE Study, which you seem too lazy to read, but love to bash, talks in depth about the problems of scalability of unconventional crude sources and why they even with crash programs can not be scaled large enough fast enough to prevent a peak oil decline unless started 10-20 years before peak oil.

Do you understand what I'm telling you?

Oh and M. King Hubbert was dead on when he said 1970 as the peak oil for the United States. He nailed it.

Jet

 

[jetflyer]

T-Bags,
I went and dug up old articles to show you that you can't trust the reserve numbers.

Why reserve numbers are wrong:

http://today.reuters.com/news/newsArticleSearch.aspx?storyID=231520

.Brent rises $2 after Kuwait reserve report
Fri Jan 20, 2006 20:18 PM ET
LONDON, Jan 20 (Reuters) - London Brent crude futures rose $2 on Friday to its highest level since early September after a report that Kuwait's oil reserves are only half those officialy stated.
March Brent <LCOc1> rose $2.01 to $67.24 a barrel after industry newsletter Petroleum Intelligence Weekly (PIW) reported it had seen internal Kuwaiti records showing that Kuwait's reserves were about 48 billion barrels, compared to the officially stated 99 billion barrels.
Ahead of the report, Brent had already gained $1.50 on mounting concern about supply from Iran and Nigeria had already fuelled a rally of $1.50.

Kuwait supposedly had 10% of the world's oil. Now they have 5%! Wait till Saudi Arabia's oil reserve totals are questioned. We'll see more than a $2.00 rise in the price of oil.

I highly recommend reading this article below:
From http://www.yubanet.com/cgi-bin/artman/exec/view.cgi/8/15426 which I consider to be the best description of the PEAK OIL problem:

Refer to the article for the figure they are referencing for this quote:

Before we leave that curve, though, I want to point out that a sudden jump of 300–400 billion barrels of oil in OPEC (the Organization of the Petroleum Exporting Countries) reserves occurs in the late 1980s (see figure 3, left-hand graph, above). But there were no significant discoveries of oil in OPEC countries during that period. What happened instead is that OPEC changed its quota for how much each country could pump on the basis of what it claimed in reserves, and politicians discovered 400 billion barrels of oil without ever drilling a hole in the ground! This helps us to understand how undependable these numbers are for worldwide proven oil reserves.

Like the quote says, the Opec countries changed the method back in the late 1980's for determining how much oil each OPEC country could pump per day and all of the OPEC countries all of a sudden started lying to the world about how much oil they had.

ALL THE OPEC COUNTRIES DON'T HAVE AS MUCH OIL AS THEY CLAIM.

So go ahead T-Bags and subtract atleast the 51 Billion barrels of proven reserves lost from Kuwait and while you're at it another 250-350 Billion atleast for the rest of the lying OPEC countries that increased their numbers in the mid-80's to pump more oil because of the quota requirement enacted.

The other incentive OPEC countries have for lying is because they want the world to not switch to alternatives and to not worry about how much oil they have. They know if they can get us to hit peak oil like a brick wall that we'll be forced to use every single barrel they can produce till their fields run dry.

Jet