Guest post by David Middleton
BP’s ‘Peak Oil’ Demand Prediction Falls Flat
By Jude Clemente
February 22, 2019
Always mandatory reading, BP just released its Energy Outlook 2019.
It has caused quite a stir again this year.But, this time the commotion that I see surrounds BP’s forecast that the global war on plastics will be the main factor in cutting global oil demand faster than previously expected. As such, for the first time BP’s outlook predicted a “peak” in oil use. At 13 million b/d, global petrochemical feedstock is 13% of total oil demand.
This is part of a growing trend in recent years where BP continues to see “much slower” growth in new oil demand going forward (see Figure).[…]
Meanwhile, IEA recently reported that it will be those very same petrochemicals that will someday become the largest source of new oil demand, even surpassing transport in the years ahead:
“Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then,” IEA, October 2018
This conclusion from IEA is predicated on the reality that oil is inherently ingrained in pretty much all aspects of our lives, even if those aspects are not immediately obvious in the ways that cars or airplanes are. In fact, perhaps the world’s greatest energy irony is that oil and petrochemicals themselves are integral to renewables, electric cars, and the overall “energy transition” itself:
“Petrochemicals are particularly important given how prevalent they are in everyday products. They are also required to manufacture many parts of the modern energy system, including solar panels, wind turbines, batteries, thermal insulation and electric vehicles,” IEA, October 2018
From a broader oil use perspective, the truth is that population and income growth are the driving forces behind the demand for energy. The equation is a simple one to remember: more people, making more money, using more energy. As the most vital source of energy in the world, and lacking any sort of significant substitute, the upside for oil is clearly bright.
This is especially true since 6 in every 7 humans living today reside in still developing nations, where oil usage has really just begun. By 2050, the world’s economy will add $85 trillion in real GDP, and the global population will surge 30% to over 10 billion humans.
Potential demand is staggering: “What If India And China Used Natural Gas And Oil Like The U.S.”[…]
I must note here that BP has drastically underestimated global oil demand before.
For example, in its Energy Outlook 2011, BP predicted global oil demand at 102 million b/d in 2030. Yet, the world could pass that level this year, and if not, surely will in 2020, or a solid decade before BP thought that we would.
Thus, new oil demand has been surging at twice the rate BP has expected.
To me, oil companies foreseeing the peak of oil without any current evidence is “a bit of a European thing,” particularly among the majors themselves that are venturing into more renewables, natural gas, and storage battery investments: “Shell is Wrong: Global Oil Demand Can Only Increase.“
The pressure from environmental groups against outwardly being “pro-oil” helps explain why super majors are understandably shying away from taking the position. In contrast, the smaller independent oil and gas producers are quietly marching forward under the very realistic assumption of “more.”
From a public relations standpoint, this all makes sense: the upside to loudly being “pro-oil” is tiny, while the downside is immense: you get called very bad names and accused of “denying science.”
Indeed, for a very long time now, baseline reference scenarios both IEA and EIA have been forecasting indicate very strong increases in global oil demand, pretty much continuously for as far out as they model.[…]
As seen below, in EIA’s Annual Energy Outlook 2019 released last month, our National Energy Modeling System forecasts that global oil demand stands on very solid footing. More, more, and even more.
Either way, whether it is from me, BP, EIA, or Greenpeace itself, I have learned a very simple truth during my 15-year career in the energy business: one of two things usually happens when you make seriously bold predictions, especially for the longer term.
When the time comes to answer for being wrong, either you are not around to have to respond, or the critics will have forgotten that you ever made the prediction in the first place.
Jude Clemente’s energy articles on Real Clear Energy and Forbes are always worth reading.
Key takeaways:
- Major oil company (particularly European majors) predictions of a near-term peak in oil demand are 99.999% driven by politics and the need to appease the investment community.
- According to baseball legend, the late, great Yogi Berra, “It’s tough to make predictions, especially about the future.” So, make sure your timeline is long enough to evade having to take responsibility for failed predictions.
- Malthuisan predictions have a 100% track record of being wrong.
- As these United States become a net exporter of crude oil in the near future, we will have no problem finding customers.
Here are the graphs from Mr. Clemente’s article:
In an odd twist, the US government forecast for petroleum demand is more bullish than an oil company’s forecast, albeit a “woke” Euro oil company.
Predictions about oil and gas production over the long term are particularly difficult. The EIA conducts “post mortem” analyses of their forecasts and makes the results available to the public. I downloaded two Excel files for AEO crude oil and natural gas production. The most striking thing is that the “shale boom” came out of nowhere in the eyes of the EIA.
Figure 3. AEO crude oil production forecasts vs actual crude oil production.
Figure 4. AEO natural gas production forecasts vs actual production.
As recently as 2008, the EIA (and most of the rest of the world) had no idea how significant the shale revolution was. The realization that low permeability source rocks could be economically developed was a game-changer.
Figure 5. Selected AEO forecasts vs actual oil production. Note that the shale “revolution” was not even in the range of technological possibilities as recently as 2008. The 1998 forecast assumed that the US was past “Peak Oil.”
Figure 6. Selected AEO forecasts vs actual natural gas production. Note that the shale “revolution” was not even in the range of technological possibilities as recently as 2008. The 1998 forecast assumed steadily rising natural gas prices and failed to predict the collapse in natural gas prices triggered by the shale “revolution.”
“It’s tough to make predictions, especially about the future.”
These sorts of forecasts can only incorporate conditions that were known at the time they are generated. The Williston Basin is a great example.
The Williston Basin is an “intracratonic sedimentary basin” (AKA a bowl).
Sonnenberg 2017
The Williston Basin has numerous petroleum systems and is productive from the Cambrian through the Triassic.
Sonnenberg 2017
The Williston Basin has survived wild swings in sea level. Modern climate “science” tells us that if this happened today, the planet would be destroyed. Also note that over the past 600 million years, sea level oscillated cyclically. Modern climate science has eliminated these cycles… presumably protecting the planet from water.
If I have to tell you when I’m being sarcastic, there’s no point in being sarcastic
The map below is from the 1972 Geologic Atlas of the Rocky Mountain Region published by the Rocky Mountain Association of Geologists. It is affectionately known as “The Big Red Book.” As I only have the huge print copy and am too cheap to spring for the digital version available from the AAPG, I took this picture with my phone…
Oil production in the Williston Basin was first established in 1951 with a discovery well on the Nesson Anticline. Anticlines are essentially subsurface ridges or hills. They are positive structural features. In 1972 all of the production from the Williston Basin was from traditional reservoirs. The oil was trapped on anticlines and up-dip in structurally and/or stratigraphically bound accumulations around the north and west flanks of the basin in porous and permeable sandstone and carbonate reservoirs. By 1985, it appeared that production from the Williston Basin had peaked.
Then… A funny thing happened on the way to Peak Oil… A nearly ten-fold increase in Williston Basin oil production.
The industry, largely led by Continental Resources figured out that through the miracles of horizontal drilling and hydraulic fracturing (frac’ing) they could produce lots of oil from one of the basin’s most prolific source rocks, the Bakken Formation’s shale members. Rather than discrete accumulations in various traps, the Bakken Shale was a continuous oil field, which essentially filled the center of the basin.
Compare the 1972 Williston Basin map to this recent map of the Bakken Formation. Bakken oil production is in green…
Sonnenberg 2017
Note that the highest density of Bakken wells and best production is east of the Nesson Anticline.
The best production is coincident with the thickest Bakken. Beets 2016.
Sonnenberg 2017
Sonnenberg 2017
As recently as 2008, the EIA (and most of the rest of the world) had no inkling that vast, continuous oil resource plays like the Bakken, Eagle Ford and myriad plays of the Permian Basin were about to be exploited by the Climate Wrecking Industry. And that’s why their oil production forecasts were so far off the mark.
About the Author
David Middleton doesn’t normally speak of himself in the third person… But that’s how these “about the author” thingies tend to be written. David has a B.S. degree in Earth Science from “that fine oil school,” Southern Connecticut State University. David has worked in the evil Climate Wrecking Industry since 1981, entirely for small to mid sized companies, that most people never heard of.
His first employer, Enserch Exploration, decided he was a geophysicist because he minored in math. His fourth employer decided he was VP of Exploration because he was really good at PowerPoint. His current employer bought his fourth employer and decided he was a geologist due to the unique stratigraphic nature of his office. There actually was a time when there really was a difference between oil industry geologists and geophysicists… David never figured out the difference.
Comments
- I don’t care if you think someone else said “It’s tough to make predictions, especially about the future.”
- If you want to post nonsense about abiotic oil, go ahead and waste your time. You won’t be wasting any of mine.
- If you want to post nonsense about the Shale “revolution” being a failure…
References
Beets, Jerry. 2016. Bakken Play PowerPoint. LinkedIn Slide Share.
Clemente, Jude. BP’s ‘Peak Oil’ Demand Prediction Falls Flat. 2019. Real Clear Energy.
Crowe, Tyler And Chris Neiger. Better Know an Energy Play: Williston Basin. 2012. The Motley Fool.
Mallory, William W, and Melvin R. Hennerman. Geologic Atlas of the Rocky Mountain Region, United States of America. Denver: Printed by the A.B. Hirschfeld Press, 1972. Print.
North Dakota Geological Survey. Overview of the Petroleum Geology of the North Dakota Williston Basin.
Sonnenberg, Stephen A. Sequence Stratigraphy of the Bakken and Three Forks Formations, Williston Basin, USA. Search and Discovery Article #10990 (2017). Adapted from oral presentation given at AAPG Rocky Mountain Section Annual Meeting, Billings, Montana, June 25-28, 2017
The abiotic theory of oil formation is at least more believable than that life originated from lightning hitting a muddy pool of water.
For the former, we can drain the historical pools of decomposed carbon-based life, and wait for them to refill. The pure scientist may be an advocate for petroleum extraction for this reason and no other. For the latter, we can infer to infinity, and beyond, but will never know the truth of origin, other than evolution begins in a scientific frame of reference at conception. Here’s to mom, dad, and unplanned parenthood.
“…forecast that the global war on plastics will be the main factor in cutting global oil demand…
This war is not yet won! I see no evidence of reduction of use of petroleum based products by all those little precious kiddy while doing strike to save the world. All I see is virtue signalling.
Virtue signalling is a truly infinite resource… 😉
I am currently working on a process to use virtue signaling to turn a generator.
I will be richer than Croesus as soon as I work out the kinks!
It is a shifting use of plastics. San Francisco just banned plastic straws, but provides free plastic needles.
i’m truly impressed if the needles are plastic, syringes?
Well, the luer hubs would be plastic, as would the needle guards. Or, if they’re using the small syringes with fixed needles, that’s quite a bit of plastic. There are plastic needles, but they’re typically referred to as spikes and used for IV connections not injections.
Someone can put SF on the spot by cutting the luer tip and finger grip top from the plastic syringes they provide, and then using the barrel as a plastic straw.
Chickens coming home to roost … 🙂
Not sure what difference it makes, as far as climate change is concerned, what the future demand will be for petrochemicals, because, well, other than hydrocarbon releases from manufacturing, they generally aren’t burned and release hydrocarbons to the atmosphere. Generally, they end up either being recycled or buried in landfills.
As for making predictions, most people and systems aren’t very good at predicting the future.
A decade or two ago, who seriously predicted the US would become the leading supplier of hydrocarbon products to the world in the late 2010s? Not very many … though there is always that proverbial stopped clock who ends up being right twice a day.
THANK YOU FOR A VERY GOOD POST, DAVID.
(IMAGINE THIS MESSAGE WITH CAPS LOCK OFF)
i like to imagine a world in which caps are no longer neccessary… a steve mosher, ee cummings sort of world… 😉
lower case without the strained emotions (ee cummings) or the drive-by i’m-in-the-in-crowd dismissograms (s. mosher)
Hold your keyboard vertically and hit the table hard a couples of time. The large G force will dislodge the offending particles of dirt from the contact membranes, and possibly go lodge elsewhere or finish to scrap the keyboard…
and lost believed, bent paper clips.
Unless spilled sweetened beverages like coffee, soft drinks … stuck paper clips and individual keys.
Use for temporary relief.
If it’s not Andrea, then it’s HTML. Use “Shift” for temporary relief.
Dodgy keybaord Allan ?.
Given the record of the Energy Information Agency and BP, was anyone publicly right in their predictions? One could write off the failure of BP to cautious securities lawyers, and the US government on pure green politics, but was anyone printing more accurate projections?
EIA’s failed predictions can simply be explained by the failure to grasp the magnitude of the Shale “Revolution” before it happened. The failed predictions of BP, Shell, Total and the company formerly known as Statoil are 100% virtue signalling.
David, you’re undoubtedly correct about BP, et al, and their failed predictions due to virtue signalling. However, my personal experience on Technical Advisory Group participation, for CONOCO and a variety of other companies, leads me to believe that “Think Tank” style groups within each company first work out the actual prediction, almost certainly at high accuracy, THEN the corporate types take over and convert the release into something politically correct. Remember, oil companies exist to enhance shareholder wealth, and if that means a little white lie here and there so be it. (Politicians, on the other hand, exist to enhance personal wealth)
The thing is that most predictions are wrong, in the sense that the aren’t exactly right. My experience is that higher precision predictions aren’t as accurate as SWAG’s… 😉
Ron Long
March 12, 2019 at 3:13 am
Ron this sounds remarkably like the way the IPCC santitises its technical reports to produce the infamous Summary For Policymakers!
What Shale “Revolution”? How revolutionary is to produce a lot of a product and sell it below the cost of production? Have you bothered to look at the free cash flows for the shale sector? It has been negative for a long time and given that production is now moving towards the more marginal areas it will never be cash flow positive. That means all of that debt that has been piled on will not be repaid and that the industry will collapse as only wells in areas that are productive can take place.
It is time for both the Left and Right to give up on illusions and see things as they truly are. Just because human ingenuity will solve energy problems it does not mean that economic oil production has not yet peaked. After all, whale populations are still a long way from where they used to be even though petroleum products could be substituted for lighting purposes. And on the right, it is time that we looked at the economic reality and attributed the shale illusion to the Fed’s liquidity injections. There hasn’t been any positive free cash flows and no dividends. That should tell you something.
This is the “revolution”…
Shale is not a panacea. It’s not easy to make money in this business. It never has been and it never will be, however…
Continental Resources, the leading Bakken player, has had positive operating cash flow every year since 2014 and three straight years of positive free cash flow 2016-2018.
EOG Resources, the leading shale player nationwide, has had positive operating cash flow every year since 2014 and positive free cash flow in 2014 and 2017-2018.
Chevron, the top US oil producer and major Permian Basin player has had positive operating cash flow every year since 2014 and positive free cash flow 2017-2018.
Very few oil companies of any kind were generating free cash flow in 2014-2016. $100+ oil made it difficult to reduce spending. The drop from $100-$30/bbl made it worse. However, the drop in prices created leverage to reduce costs, particularly rig rates and service company expenses. Everyone, conventional and unconventional players, ratcheted down spending from 2015-2017. Breakeven prices for the shale plays plummeted over this period.
https://mercercapital.com/energyvaluationinsights/how-to-interpret-breakeven-prices/
The vast majority of shale plays are economic at $80/bbl.
I prepared a plot of the historical oil price in 2018 dollars (available in the BP workbook), over the last 40 years, and the linear curve fit shows 1.8 % per year price increase. This implies a doubling every 40 years can be expected, taking the price to around $135 dollars per barrel (in 2018 $). That price is a barrier for poor countries which can’t afford it.
Another interesting point is that increases we see are mostly very light crude oils, natural gas liquids and condensates. And this isn’t about to change because we don’t have the ability to produce a medium crude from a ‘shale’ and make money. This explains why the US exports very light crude and condensate and imports crude oil: the refineries don’t do very well refining the oils produced from ‘shales’ and prefer to feed a mix, importing more expensive medium crudes to make sure they get the right product slate.
It’s also important to note that IEA and other forecasts include natural gas liquids as ‘oil’ or ‘petroleum liquids’. This NGL stream is growing at a faster pace than crude oil and condensate. And a lot of it is used to manufacture plastics, which means it’s not released as CO2. This brings up the need to change the way CO2 emissions are estimated when we look at the future, which are bound to be much lower than estimated if one assumes what we are producing is crude oil and stabilized condensate. This later stream (the refinery feed) is growing at a much slower pace. And thus we can see different “peak oil” predictions because what the authors use different methods to define oil, and also have differences in their estimated price forecasts, as well as the price range which stops demand from growing.
David,
You should never provoke the abiotic oil gods. They will oblige.
That’s why I preemptively stated that they wouldn’t be wasting any of my time in this thread.
I worked for BP in the 1960s. At one point, we had a presentation from experts from the London office who forecast the price of crude oil 20 years out at $80 a barrel. At the time, oil was trading for two dollars a barrel. It sounded ridiculous to me, but in retrospect, they weren’t far off.
Wrong oil price predictions in both directions are a dime-a-dozen.
T. Boone Pickens, May 2015
Oil (Brent)bottomed out at ~$38/bbl in early 2016 and…
Thanks David, my visually orientation very much appreciates the extensive use of graphics. In the line of going to war on some pretense of environmental wrong all that is needed is an army. https://climateandsecurity.org/imccs/
We do live in interesting times.
You’re not *the* Robert Ballard, are you?
If you are, I have a book I would like to have autographed…
Sorry to disappoint, David, I am indeed *the* Robert T Ballard. Born to my home 1/4 mile from the beach and Buzzard’s Bay; our ships past as Robert D. moved to the coast and I to the mid-west. I keep a jar filled with sand on my desk.
I guess I could have phrased that better… 😉
Excellent article David.
Four thick salt layers where seas dried up.
You are absolutely right, David. Any one of those events today would be blamed on CO₂ and evidence of Earth’s certain doom.
Somebody, or some people, in BP have an absurd belief regarding how much plastic is used in those plastic bags and straws banned by daft localities.
Or does BP have investments in CNC machinery where BP plans to manufacture many plastic pieces in steel, or wood, or paper mache.
If you convince the “woke” folks on Wall Street thst peak demand and our salvation from Gorebal Warming is just over the horizon, pepper it with calls for a csrbon tax, spend a pittance on green schist and use the word “sustainable” a lot… they let you get on with your business.
lets go drilling in the Arial!
OK, I do not get this at all.
“BP’s ‘Peak Oil’ Demand Prediction Falls Flat”
With this title, you might think this was something about Peak Oil, or something.
Then we see this:
“Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030″
OK, let’s break it down.
World oil demand will continue to increase. Petrochemicals will be one third of that increase.
All they are really saying is that petrochemicals will increase their market share. This is a totally reasonable forecast. As the world at large continues to modernize, consumption of plastics and other high-tech engineered materials will proceed at a somewhat accelerated pace.
Not altogether that dramatic a forecast at all.
The whole rest of the article did not really say much of anything at all.
??????????
So what is all this noise about “Peak Oil”?
@ur momisugly ALLAN MACRAE
Trouble with your keyboard, again?
Have you tried hitting it with a hammer?
Hammers are for construction, or demolition. In electronics we use precision percussion readjustment instruments.
In the UK a hammer is sometimes known as the “Scottish Adjusting Tool”.
and in Lancashire known as a Yorkshire screwdriver
Yes… you did “not get this at all.”
From the BP Energy Outlook document:
“Much of the narrative in the Outlook is based on its evolving transition scenario. This scenario and the others considered in the Outlook are not predictions of what is likely to happen; instead, they explore the possible implications of different judgements and assumptions.”
OK, so they are playing “What If”.
And:
“85% of the growth in energy supply is generated through renewable energy and natural gas, with renewables becoming the largest source of global power generation by 2040.”
{OMG – on that renewables claim, but never mind.}
And finally:
“Demand for oil grows in the first half of the Outlook period before gradually plateauing, while global coal consumption remains broadly flat.” (by 2040)
If that is a claim about “Peak Oil”, it is on pretty thin ice, and pretty tame, regardless.
It’s not a claim about Peak Oil. It’s a claim about peak demand.
OK, I do not get this at all.
Indeed you didn’t. It’s not about “peak oil” as you wrongly believe, it’s about “peak demand for oil” as seen in this relevant quote:
Oil demand will only increase given demand history. Trying to reverse the demand is a fool’s errand. All the virtue signalling in the world won’t change the fact that people prefer and want prosperity.
I doubt China got the memo on plastics.
After all, China IS the world’s “Cheap-plasticshit”R”us.”
no China is pushing the “memo” to try an con the rest of the world into not making plastics so they can be the only supplier. Their playbook is obvious its shocking how few see it. Same reason they play the climate change game with the west.
Sometimes predictions are self serving.
GM is moving automobile production to Mexico and closing plants in America and Canada. Their excuse is that they are pivoting to electric cars. Hmm. Ford dumped most automobiles without employing that excuse. Maybe GM is lying about its motivations.
The same people who are willing to drive all over town to save a few dollars on groceries, get upset when companies do the same thing.
so much for our tax dollars to save jobs! is anyone surprised?
Honda just announced it is moving out of the UK… one of the reasons given being the change to electric cars…
‘We have to move very swiftly to electrification of our vehicles because of demand of our customers and legislation’ said its European head.
(there might have been another reason too)
“The first of them is that only a few months ago Japan and the EU signed their free trade deal, meaning tariffs on car exports from Japan are now being eliminated, alongside a host of other trade barriers.
Suddenly, the economic barriers that might once have persuaded you to locate your plant in the UK have evaporated.”
One of the the diagrams
says 375 feet.
I certainly don’t know what I’m looking at.
It’s a stratigraphic, rather than structural cross-section. It is flattened on the Lodgepole Formation, which forms the seal above the Bakken. It shows where the Bakken is thickest in a vertical presentation.
375′ is the combined maximum vertical thickness of the Bakken and Three Forks formations.
As outstanding a presentation as this is, I believe that natgas will eventually overtake oil in future years.
As these ‘unconventional’ methods become the conventional, the physical properties of gas (it simply flows) will show its advantages vis a vis recovery of a viscous fluid travelling two miles sideways and 2 miles vertically through tubing the size of a man’s fist … for several decades, no less.
The amount of gas available in the Appalachian Basin alone is almost unfathomable.
When the advances in MOF technology (Metal Organic Framework), mature, CNG-fueled cars will be able to be filled right at a house’s residential supply.
That time is rapidly approaching.
Again, a great article.
That and the fact that the natural gas resource potential is about an order of magnitude greater than crude oil.
You will need a big rethink of the ICE if you plan to run anything but wimpy cars on natural gas. I had an F-250 that could switch between propane and gasoline. On propane it couldn’t get out of its own way, and if I ran on propane too long, the gaskets would leak when I switched to gasoline. What a mess.
With the correct fuel to air mass ratio you simply cannot put much fuel mass into a small cylinder; hence small heat input per stroke. Natural gas engines run best as large, low rotation speed movers for big compressors.
For transportation uses, gasoline, diesel, and jet fuel are the most concentrated portable energy resources now available to us. What are the prospects for the future economic conversion of natural gas into gasoline, diesel, and jet fuel?
The technology exists, but what factors would influence the long term economics of converting natural gas into conventional liquid fuels; e.g the long term supply of natural gas, the price of natural gas, the cost of conversion, the future supply of competing stocks of crude oil, the price/demand elasticity of gasoline, and so on.
The oil companies are going to have to start investing in the offshore business soon if they want to meet the demand. They’ll also have to start attracting people back into the industry because at the moment it’s about as bad as i’ve ever seen it. Highly experienced people are ageing rapidly…
I know I’m fracking older than schist… And I’ve been working the area around one field in East Cameron, South Addition for four different companies since 1988. The first 3d I ever worked and first offshore well I ever drilled was on East Cameron 346… I figure I can’t retire until that platform retires… 😉
Excellent article David. This fellow geologist says so!
I’ve worked the Gulf of Mexico since 1988… But I’ve only had to go offshore one time.
Back in 1990, Enserch was drilling a well on Mississippi Canyon 441. We were using the Zapata Lexington semi. As a grophysicist, I rarely had any well-site opportunities. However, we ere running a VSP on the MC 441 well and the boss wanted a geophysicist out there. My hard hat had expired, so I had to borrow one and I had to go buy a pair of steel-toed boots. I flew from Dallas to New Orleans, rented a car and drove to Port Fourchon. Since MC 441 is only a 3-hour boat trip, we weren’t running a helo. So I rode the crew boat with the Schlumberger logging crew. When we arrived at the rig, they all put life jackets on and went out onto the back deck.
I followed them out. And then watched a crane lower a basket from the helipad to the boat with a couple of righands hagging on to the sides. The Schlumberger guys tosseed their bags into the basket and climbed on to the sides. It then lifted them to the helipad. One of the righands noticed I didn’t have a life jacket and he handed me a work vest and said “Here put dis on” in a very Cajun accent. When the basket was lowered back to the boat, the righand tugged on my vest and said, “Dat be on upside down. Oh, it don’t matta, da fall’ll kill ya”… I survived my introduction to the Billy Pugh Basket… 😉
That’s a funny story, David!
My dad told me a story about a Korean war troop who was being flown out of South Korea with a bunch of other GI’s and all of them had to put on parachutes for the trip, and this particular guy asked the loadmaster how to activate the parachute, and the loadmaster said, “Just hit this button right here” and pointed to the button located on the center of his chest at the junction of four straps that came over his shoulders and around his legs and met in his middle at a button.
The trooper’s trip was uneventful, and when he landed in Japan, he asked the ground crew how to get the parachute off, and one of the crew reached over and punched that button and his parachute fell off! It was the release button, not the parachute activator. Reportedly, the trooper said he would kill that loadmaster if he ever saw him again!
Thanks for all the great articles you produce, David. Always interesting.
That’s funny… reminds me of my experience with the Billy Pugh Basket… 😉
Figures 1 and 2 don’t disagree a lot. Figure 1, projected “growth of new demand” (can existing demand also grow?) of global “petroleum liquids” by BP, says .7% growth in 2017 decreasing to .3% growth in 2019. Figure 2, projected oil demand by EIA, shows growth of demand generally decelerating until 2026 and averaging looks-to-me-like ~1.3% per year from 2018 to 2022 and .25-.3 % per year from 2022 to 2026. Also, Figure 1 has a subheading of “Reference outlook, over the next 15-20 years”, while having a bar graph of three years. I suspect there should be additional explanations.
It would have been better if Mr. Clemente used a more direct comparison. If I have time, I’ll see if I can gin one up.
We used to have a large group of Cajuns who came up to Fort Wayne each spring to work in the house building industry here. The were an extremely practical bunch. And come November they all headed back down south. “The geese all fly south before all that snow falls, and I’m at least as smart as a goose”.
^¿^
The primary feed stock for plastics is natural gas, and natural gas liquids. Alberta has a fairly large petro chemical industry and seemly endless supply of natural gas.
As a summer engineering student I observed a well frac operation in AMOCO’s Beaver Creek, WY field in 1967.
That was before they added horizontal drilling.
Add plus 30 years of engineering design & O&M in climate wrecking power generation – using all the most popular designs and fuels.
Plastic toys and many tools do not last like they did years ago. I still have many of the plastic toys I bought my kids in the 70’s. When I buy a plastic toy for the great grandkids today, very good chance it is broken before they take them home, and many are in the trash within a month or so. Has that FACT been factored into the predictions?
David,
When fracking became newsworthy, there was some concern expressed about the shale plays declining sooner and more steeply than conventional oil wells. I haven’t read much about that lately. What is your take on the longevity of shale plays?
The individual wells do have rapid decline rates. You have to drill a lot of wells.
Getting to my personal bottom line, this is all good news; I’m scheduled for a 525hp (0-60 about 3.6 sec) 2020 BMW M550 in Oct 2019…
No, I don’t NEED this; yes I will drive responsibly; and I want it because I want it.
Zoom Zoom (apologies to Mazda).
And I really need a Jeep Wranglier Rubicon with a 6.4 L hemi engine… 😎
We haven’t reached “Peak Horsepower” yet. I saw an automaker offering a 700 H.P. Mustang this year.
It used to be that 425 H.P. was a lot, but that’s in the rearview mirror now! It’s good to know we will have plenty of gasoline to power these cars. Low-power, economy models need not apply.
I somehow think that old horses were more powerful… LOL!
Thanks David.
My favorite prediction is “Peak Copper.”
https://en.wikipedia.org/wiki/Peak_copper#History
In 1924 geologist and copper-mining expert Ira Joralemon warned:
“… the age of electricity and of copper will be short. At the intense rate of production that must come, the copper supply of the world will last hardly a score of years. … Our civilization based on electrical power will dwindle and die.”[3]
These sorts seem to be far more numerous than the Julian Simon types. ==> “The Ultimate Resource”
I first noticed something odd was going on in fossil fuel production when any semblance of a relationship between NG and Oil prices broke down in 2009/2010.
Gas is priced per million BTUs. A barrel of oil is ~6 million BTUs. In the 1990s Oil ran $15-20/bbl. and gas was $2-3/MBTU. In the early years of the 21st Century, oil and gas prices both trended up.
In 2005, amidst cries of gas shortage gas went over $13/MBTU, and oil went to the 60s. See that relationship. With the Iraq war on, oil prices spiked in 2008 ($140 in summer 2008), but gas prices were pretty high too (almost $13 at the same time). Then the Panic of 2008 kicked in and smashed all commodities prices.
In early 2009 both bottomed out Oil around $50 and gas was under $4 at the end of winter 2009. Then oil went back up, hitting $100 in early 2011. And gas stayed under $5. The price/energy relationship was way off.
The most recent oil price regime kicked in in q3-4 of 2014 when oil dropped from $100 to $50. Right now, $50 seems to be a stable number for oil. But, Gas has stayed well under $5 closer to $3 during this entire time.
The price ratio is still way above the energy ratio. Will they reconverge? If so will oil come down? or gas go up?
Price data:
https://www.eia.gov/dnav/pet/hist/RWTCD.htm
https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
The issue is that you are looking at one country, the USA. Gas is a lot harder to export than oil, so it tends to be cheap in countries that produce it, particularly if production has risen recently.
I expect USA gas prices to rise as facilities to liquefy it for export expand; however, I expect it to remain cheaper than oil on a per BTU basis.
There was a time when a barrel of oil cost about 6 times the price of one thousand cubic feet (mcf) of natural gas. Shale disrupted this relationship in North America.
As BillP points out, oil is much more fungible than natural gas.
I have heard it said that it is ftight dolomtes within the bakken rather than te shale per se that is the bakken fraccable reservoir most organic rich shales seem a bit plastic -would be like fracking chewing gum.also what need for a geophysicistin fracworld?