Oil Production Vital Statistics: April 2015

The IEA OMR is out early this month hence April’s edition of vital statistics comes early. The March 2015 Vital Statistics is hereEIA oil price and Baker Hughes rig count charts are updated to end March 2015, the remaining oil production charts are updated to February 2015 using the IEA OMR data. The main oil production changes from January to February are:

  • World total liquids up 80,000 bpd
  • OPEC down 90,000 bpd
  • N America up 220,000 bpd
  • Russia and FSU up 10,000 bpd
  • UK and Norway up 100,000 bpd (compared with February 2014)
  • Asia up 30,000 bpd
  1. Global oil production is declining slowly but remains just above its long-term trend. Just over 94.04 Mbpd was produced in February.
  2. The recovery in the oil price in February reversed in March and WTI has tested its January lows. Spreading conflict in the Middle East adds further complexity to the price dynamic.
  3. The plunge in US oil rig count has slowed significantly although still falling slowly. This may signal a new phase of the oil price war that is discussed at the end of this post.
  4. I anticipate that the price bottom may be in but that price will bounce sideways along bottom for several months until we see significant falls in OECD production. Whilst there are signs that global production is falling slowly there is as yet little sign of a significant drop in US production.
  5. IEA revise data up to three months in arrears and the picture painted a month ago may change as a result of those revisions. A significant upwards revision of 300,000 bpd has been made to US oil production in December 2014. And problems remain with the reporting of UK and European production figures.

Figure 1 Daily Brent and WTI prices from the EIA, updated to 23 March 2015. It is difficult to see the detail of recent action at this scale, so an expanded X-axis chart is given below the fold.

Figure 2 On 13th / 28th January Brent and WTI reached respective lows and the WTI-Brent spread closed completely. The recovery in the oil price staged in February appears to have run out of steam. WTI fell to test its Jan 28th low of $44.08 on 16th / 17th March. Brent has staged a more solid recovery. The differential price action continues to reflect gross over supply of LTO (light tight oil) in the USA with the IEA reporting all storage almost brim full. Spreading conflict in the Middle East adds an additional dimension to the oil price dynamic. It is too early to say if the price bottom is in. Stabilisation of US drilling (Figure 4) may signal a continuation of the glut and more pain to come for producers. 

Figure 3 Oil and gas rig count for the USA, data from Baker Hughes up to 27 March 2015. The recent top in operating oil rigs was 1609 rigs on 10 October 2014. On March 27th the count was down 796 to 813 units, a fall of 49.5%. The oil rig count is down 173 for the month of March.  Not easily seen on this chart is the fact that the rate of decline has slowed dramatically (Figure 4). The decline in drilling activity has yet to show up in US oil production statistics (Figure 5). A backlog of wells already drilled are being fracked and hooked up. The decline in gas rigs has accelerated, down 47 rigs for the month of February. It will be interesting to see where the equilibrium point is struck where oil and gas production declines are held stable by drilling activity.

Figure 4 Detail of the US rig count statistics showing that the decline in oil rig count is showing signs of stabilising. If the oil rig count stabilises at this level it will signal a new phase of the oil price war that is discussed at the end of this post.

Figure 5 US oil production stood as 12.60 Mbpd in February 2015. The IEA has significantly revised upwards US production figures for the last 3 months by 300,000 bpd. This provides further evidence for the scale of over-supply that led to the price collapse. There is no sign of US oil production slowing let alone falling. C+C+NGL = crude oil + condensate + natural gas liquids.

Figure 6 While most OPEC countries claim very slender margins of spare capacity, the IEA have cut this margin to virtually zero in Kuwait, UAE, Qatar, Algeria, Nigeria, Angola, Venezuela and Ecuador. Note that the IEA have reported February spare capacity of 0.76 million bpd for Iran, about 0.70 mbpd higher than in recent months and this is presumed to be an error. Any hopes of OPEC cutting production are well and truly dashed as the response has been to pump flat out to maximise revenues when confronted with a collapsed price.

Figure 7 OPEC production plus spare capacity in grey. The chart conveys what OPEC could produce if all countries pumped flat out. OPEC production stood at 30.23 Mbpd in February, down a meagre 90,000 bpd on January. There are signs that OPEC total capacity is in decline, a situation masked by conflict in Libya, sanctions in Iran and on-going conflict in Iraq. There is absolutely no sign of the healthy OPEC nations cutting production. Note that production in Libya is now almost zero. Under Gaddafi, Libya produced 1.7 Mbpd and had decent schools and hospitals.

Figure 8 Saudi production is rock steady and stood at 9.74 Mbpd in February, up 50,000 bpd from January. NZ = neutral zone which is neutral territory that lies between Saudi Arabia and Kuwait and shared equally between them.

Figure 9 Middle East OPEC oil rig count from Baker Hughes. While OPEC is maintaining production levels, the 14% jump in rig utilisation in these gulf countries in February most likely means that they are having to drill increasing numbers of wells to combat declines in order to hold production steady.

Figure 10 Russia and other FSU oil production remains rock steady. Russia is one of the World’s largest producers with 10.94 Mbpd in February 2014, the same as January. Other FSU also ticked up 10,000 bpd to 3.03 Mbpd in February.

Figure 11 The cycles in European production data are down to summer maintenance programs in the offshore North Sea province. To get an idea of trend it is necessary to compare production with the same month a year ago. Compared with January 2014, UK+Norway production is up 100,000 bpd. Note the IEA have had reliability problems with the UK and other categories that distort the near-term picture.

  • Norway Feb 2014 = 1.95 Mbpd; Feb 2015 = 1.97 Mbpd; up 20,000 bpd YOY
  • UK Feb 2014 = 0.81 Mbpd; Feb 2015 = 0.89 Mbpd; up 80,000 bpd YOY
  • Other Feb 2014 = 0.78 Mbpd; Jan 2015 = 0.59 Mbpd; down 190,000 bpd YOY (I believe the Feb 14 figure is probably a mistake)

The steep declines appear to have been arrested and with several new major projects in the pipeline North Sea production was expected to rise in the years ahead. The current price rout is bound to have an adverse impact and activity in the North Sea is winding down rapidly as companies enact major redundancies in a workforce who are now threatening strike action.

Figure 12 China is a significant though not huge oil producer and has been producing on a plateau since 2010. Production was 4.16 Mbpd in February up 20,000 bpd from January. This group of S and E Asian producers have been declining slowly since 2010. The group produced 7.63 Mbpd in February, up 30,000 bpd on January.

Figure 13 N American production continues to rise on the back of the revised IEA figures for the USA. At some point the plummeting rig count was expected to bite, but if the plunge is arrested at about 800 oil rigs, the anticipated production falls may not materialise.

  • USA January 2015 12.49 Mbpd; February 2015 12.60 Mbpd; up 110,000 bpd
  • Canada January 2015 4.29 Mbpd; February 2015 4.35 Mpd; up 60,000 bpd
  • Mexico January 2015 2.61 Mbpd; February 2015 2.67 Mbpd; up 50,000 bpd

Group production up 220,000 bpd from January.

Figure 14 Total liquids = crude oil + condensate + natural gas liquids + refinery gains + biofuel. February production was 94.04 Mbpd up 80,000 bpd on January. Note that the patterns on many charts change as a result of IEA revisions. Total liquids production now seems in decline and is just hovering above the long-term trend drawn through recent tops. The oil price will unlikely begin to stage a proper recovery until production drops well below that trend line which reflects demand growth.

Figure 15 To understand this chart you need to read my earlier posts [1, 2]. The data are a time series and the pattern describes production capacity, demand and price. My expectation was that the trend will move to the left and up when supply is eventually reduced pressing prices higher. Higher demand will then take the trend up and to the right.


The most significant statistic this month may turn out to be the slowing of decline in US oil rig count (Figure 4). It is too early to say. I was expecting the plunge to continue, but IF it is arrested at the level of around 800 rigs then a new ball game may begin.

High oil price had led to industry costs going through the roof as contractors made hay while the sun shone. The price collapse alone is enough to reduce the cost base for shale drillers and frackers as skills shortage turns to skills glut and contracting rates go through the floor.

In yesterday’s Blowout, Roger Andrews linked to an interesting story about renewed efficiency drives in the US shale patch aimed at making shale producers cost-competitive at $50 / bbl. Some may take this with a pinch of salt. But should the US shale industry simply refuse to roll over and die then the ball gets tossed back to OPEC. We may see a new era of prolonged over-supply and price weakness that will be great news for consumers but bad news for many OECD oil companies grown bloated on $100 / bbl. But the big losers would be OPEC. This could spell bad news for social stability in many OPEC countries as generous welfare programs are curtailed. Parts of MENA already in meltdown may begin to vaporise.


[1] Energy Matters The 2014 Oil Price Crash Explained
[2] Energy Matters Oil Price Scenarios for 2015 and 2016

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17 Responses to Oil Production Vital Statistics: April 2015

  1. glen Mc Millian says:

    I posted a comment about a week ago to the effect that in my opinion the current low price of oil is easily explained by a few basic facts and or assumptions.

    One is the well accepted fact that oil demand in the short term is highly inelastic – which basically means that even if the price falls OFF A CLIFF consumers will not buy very much additional oil – in the short term.

    The second (fact in my opinion ) is that the world economy is at best indisposed and better described as in something less than good health at the moment with the result that the demand curve is has shifted towards the left meaning that the market will absorb less oil at any given price than it would before the economy caught the flu.

    REMEMBER – demand is a math function and not an effing quantity even though most people just don’t understand this basic definition. Demand properly defined just tells us that the world will use more oil if it is cheaper and less if it is more expensive. It does not tell us how much the world uses or wants any given day. The market tells us that by matching price with consumption. The world will continue to use as much oil as is produced if it is cheap enough. I will feed good fresh cream to my cat if it is CHEAP ENOUGH- even though I might be in financial difficulties myself.

    The third factor is that depending on whose opinion you value most , the production of oil has held up perhaps a bit better than expected and a lot better than pessimists expected. When the consumer can buy as much oil as he wants for fifty bucks a barrel then that will be the price of oil – so long as the oil industry supplies as much as the consumer wants for fifty bucks. The ONLY way to get the price up is for the industry to produce less so long as the economy stays in about the same shape as it is now.

    This explanation in layman’s terms is entirely consistent with the first link above – the first reference to the oil price crash explained.

    Nobody knows for sure how long we will be able to depend on fossil fuels – the reserves may or may not be as large as we think and the countries in possession of these reserves may decide to hoard them rather than exporting. The population is growing pretty fast and will be for decades yet and nobody can know for sure how fast we will be using up the remaining one time endowment of fossil fuels. There may be economically crippling price spikes due to wars a long time before supplies actually run critically short. Questions of this sort are the most pressing of all questions involving the next few decades in my opinion. We have fought and are still basically fighting wars for access to oil -even if our troops are not actively engaged at the moment they are overseas occupying what I call sand country for no other real reason. Does anybody here really think we would give a hood about Saudi Arabia or Iran or Iraq etc if there were no oil in sand country ? If so I have the drawings to a perpetual motion machine that runs perfectly for sale cheap – for cash only.

    I have just brought it up now so as to bring it another issue forward which I will return to with a later comment- the fact that we must eventually manage with renewable energy given that fossil fuels are not going to last forever. ( I personally consider nukes as being defacto renewable given that breeder reactors are at least known to be workable if not practical and that there is definitely plenty of thorium etc in the world to last a VERY long time.

    Somebody responded with a comment that I am WAY to pessimistic. I will copy his response to me and my refutation of it after I deal with an unexpected guest. More later.

  2. Dave Rutledge says:

    Hi Euan,

    “But the big losers would be OPEC.”

    Big losses for petrothugs (overlaps with OPEC): Maduro, mullahs, Putin.


    • glen Mc Millian says:

      Hi Dave,

      If you are the same guy who wrote a recent paper about future coal production – When do you think coal production will peak – approximately of course?

      • Dave Rutledge says:

        Hi Glen,

        Historically, mature coal regions (UH, PA anthracite, Ruhr, Japan/South Korea, France/Belgium) have peaked anywhere from 40% to 70% of the way through the production cycle. Often the peak coincides with a shock, like a war. Because of this, I view coal production peaks as fundamentally unpredictable from a modeling perspective.

        I used to think that world coal production would peak when the Chinese production peaks. Chinese coal production may be peaking now. Now I am not so sure; we may have to wait for India. But I suspect that India may be the last big one. If I had to guess, I would say before 2030.


  3. Hardrock Fracer says:

    have a look at a plot showing spare production capacity vs oil price: http://oilpro.com/gallery/136/1935/we-not-real-global-overcapacity-situation
    Puzzling thing is market seems to be completely disconcerned with potential drop of million or two BOPD…

  4. glen Mc Millian says:

    Thanks Dave.

    So far as I can see hardly anybody thinks that we won’t hit peak oil within about the same time frame or maybe a decade or so later.

    It seems perfectly obvious to me – speaking of course as a layman who has followed the peak oil debate for the last few years – that if it weren’t for the media and the oil industry itself changing the rules in the middle of the game that we would be talking dead seriously about peak oil right now.

    But this smoke and mirrors trick has been managed beautifully and we now talk about total liquids instead of oil as a general rule in the mass media.

    But natural gas liquids and ethanol don’t have the energy content per barrel that real stinky honest to Jesus crude has – and biofuels are not that great in terms of net energy content anyway. I am an amateur when it comes to oil but you can bet your last can of beans that I know my way around a corn field and there is not a whole lot of net energy to be had from growing corn to manufacture moonshine to burn in cars. At best it is basically a process that converts coal – first converted into electricity – and natural gas – first converted into nitrate fertilizer – into a low energy liquid fuel with some livestock feed left over. A really honest apples to apples energy analysis is just not possible because the left over distillers grain is not used for energy production but rather as livestock feed and nobody really agrees on how that orange in the apple barrel should be dealt with.

    I am still looking around for professional opinions about the timing of peak natural gas. I don’t put much faith in the opinions of people who are employed in the industry because their salaries are apt to depend on their saying things they may not really believe.

    In any case it seems very likely to me that we have on a collective basis anywhere from ten to maybe thirty years at the most to get our act together and be well started on a transition away from fossil fuels and to renewables or more likely a combination of nukes and renewables.

    Personally I tend to think of nuclear power as being potentially renewable given that breeder reactors have been shown to work and that there is so much thorium in the world – not to mention a million years worth of uranium that we might eventually extract from sea water on an economic basis.

    This necessary transition is going to be one hell of a big tough job and it isn’t going to happen very quickly no matter how hard we work at it- and if we don’t get after it pedal to the metal pretty soon we may run short enough of fossil fuels that we won’t have the necessary energy available to make the transition. The technology ambulance might run out of gas on the way to the hospital.

    It might not even be POSSIBLE for the entire world to manage this gargantuan task. As a matter of fact I don’t believe most of the world WILL manage it – with one consequence being that resource wars are probably going to be the order of the day in many parts of the world within the next few decades.

    But I think a few countries at least have a realistic shot at dealing with peak fossil fuels and still maintaining a reasonably functional industrial economy given that there is plenty of potential for the economy to grow even while using less energy per capita. We have been getting more bang out of each barrel of oil or ton of coal in advanced countries for a while now and this trend can and will continue for a long time yet. Beyond efficiency there are life style modifications that will also come into play – such as more people living closer to their jobs, driving smaller cars ,etc. Appliances and buildings will be built to be substantially more energy efficient as time passes.

    But even so – and even in countries such as the USA, Canada , and Brazil- countries that are still very wealthy in terms of land and resources in the ground – we might get caught with our pants around our ankles trying to escape from a big bad bear in the form of a fossil fuel energy crunch.

    I will have more to say about this later tonight.

    • Ed says:

      This transition needs to get a move on !! As I have reported on a previous thread. Here in the UK during 2013 we produced 2.29 kWh/day per person from renewables ( 53.7 TWh shared between 64.1million people). Weigh this against the estimated 200 kWh/day of energy that we consume on average. I’ll work it out for the US later and post it.

  5. ducdorleans says:

    the “daily oil price” is developing into a pennant …

    “Flags and Pennants are short-term (well, … here it is longer term …) continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume, and mark a mid-point of the move.”

  6. Ed says:

    On topic for once. 🙂 Something that you alluded to at the end of your article. It may be that the rate of change of oil price is more important than the actual price of oil. This is something not mentioned very often.

    Mathematically, I’ve a problem with the notion that low oil prices put produces out of business directly. If a producer produces oil at a EROEI of x then this is independent of price as your input costs should go down with oil prices. However main problem is that there is mismatch in the rates of decrease and also a time lag. It is this that puts pressure on oil produces more than actual oil prices directly. Essentially it becomes a cash flow problem which then leads to a debt repayment problem.

    Nothing a short term loan can’t sort out at zero percent interest !!

    • glen Mc Millian says:

      HI ED,

      You have a good point when you say input costs will or ought to go down along with prices given that this is obviously true in many different businesses including my own.

      But not ALL costs go down as fast as prices. Costs generally lag low prices and some costs are extremely sticky and may not fall for years. Among these costs are property taxes, insurance, legal counsel, accounting, and other professional services.

      Equipment rental or lease costs generally do come down too but only once the lease term is up. If I rent land for three years from a neighbor I am stuck with that as a fixed expense for the duration. Labor costs probably won’t come down much until AFTER a cycle of layoffs with rehiring being when lower wages will come into play.

      If a given input is used in many different industries and the one in question uses only a minor fraction of that inputs total production then the price of it is not apt to decline at all. Electric motors and specialized pumps are a good example. The oil industry probably uses only a very minor fraction of the total out put of motors and thus the price of motors is not apt to fall when oil prices fall. But if a given company specializes in pumps used in new oil rigs or wells then that company has little choice except to cut prices to maintain it’s market share. Otherwise it will soon be without any customers because some other company WILL undersell them.

      The time lags involved in these factors are long enough to break a business without deep pockets. I doubt any oil majors will go out of business – there might be a merger or two among the big boys. But a lot of the little fellas probably aren’t going to be able to pay their bills. This is a good time to be a bankruptcy lawyer in the oil patch.

      This stuff is obvious to professionals but it is good to explain it in some detail help people new to such discussions understand it easier. Hopefully there will be some people without backgrounds in business or engineering reading these comments.

      • Ed says:

        Thanks Glen. You have explained things better than I ever could and have gone into a lot more detail, which is good as I don’t have the patience to write long comments sometimes.

  7. Ed says:

    Following on, and I’ll make this my last comment as I am aware no one else is contributing.

    Site after site dealing with energy matters have predicted the demise of fracking operators at $50 /bbl. I pose the question: what happens if this doesn’t happen because they have managed to successfully drive their costs down? I think that was what Euan was getting at in the original article. Doomers (including myself, even though I have reservations about this prediction) will have lost a lot of credibility.

    • A C Osborn says:

      More to the point, if there is a demise and the equipment is merely mothballed, it will all restart once the prices rise again, as they must.
      During the demise do you think that nobody will buy out the equipment and wells as future investments.

      • Ed says:

        Yep, A C, I think you are correct. We will get every last drop of oil out of the ground that we can. Even oil with EROEI < 1 using coal or gas as our energy source if we get super desperate i.e. to fight a war or keep our population from starving a little bit longer.

  8. glen Mc Millian says:

    A few days back somebody posted this response to my argument that we need to get moving on renewables and keep moving or else we are going to find ourselves in a very bad spot a few decades down the road.He called me too pessimistic. Doom and gloom types at other energy sites call me a pollyanna optimist. Personally I think I am pretty much in the middle – worried for the young folks but cautiously optimistic they will be able to live lives that are comfortable safe and dignified with the really important stuff available to them – the stuff such as refrigerators and antibiotics that arguably make wage worker richer in real terms than an emperor of old.

    This is what he wrote – with his comment impressing ME as not being very well thought out given that I AM argueing that there are still some ” miracles” in the pipeline.

    You doom & gloom guys make me laugh.
    Was finding & using “Coal” a miracle?
    Was finding & using “Oil” a miracle?

    If you think about it oil and coal are one time thru gifts of nature and there seems to be a solid consensus that we are going to be up doo doo creek without a paddle within a few more decades unless we find replacements for them.

    Was the invention of the “steam engine” a miracle?

    In terms of the day it was invented it was miracle like no question.

    BUT it burned coal and still burns coal, oil , or natural gas with some minor usage of biofuels.

    Was “Electricity” a miracle?

    Without coal and oil and gas electricity would still be an extremely expensive and extremely limited technology. There sure as shooting wouldn’t be any grid.

    Was the “Petrol Engine” a miracle?

    Ever noticed that petrol engines run on PETROL?

    Was the the “airplane” a miracle?

    Airplanes would not exist without oil except maybe as super high tech military weaponry or spy tools.

    Was the “computer” a miracle?
    Was “space flight” a miracle?

    The odds are extremely high that neither computers nor space flight would be realities TODAY except for the fact of the Industrial Revolution.

    It is in my opinion extremely unlikely that these technologies would even be invented within the next century or even the next five centuries maybe except for the extraordinarily powerful effect of fossil fuels on commerce which in turn created the surplus of capital – both monetary and human – needed to create computers and space going rockets.

    Was the invention of “Penicillin & Antibiotics” a miracle?

    See above.

    Was “Fracking” a miracle?

    The oil industry has known about the tight oil deposits for at least fifty years or more. The fact that they are only now being produced is considered by SOME people evidence that maybe it is time to think about the day when oil is going to be extremely expensive and possibly unavailable at any price to some countries.

    Was “Atomic power” a miracle?
    Satellites?, Mobile Phones?, Televisions?, Xray machines?, CAT Scans?,the list is just too long.

    Ditto my responses above.


    OF COURSE some of them would have been invented any way – sooner or later. But there is no likelihood at all that any of them would be commercial realities TODAY except for the reality of fossil fuels.

    The answer to all those questions is Yes & No, to us they were just “progress”, to someone from the 1700/1800s they were miracles.

    So you think that the human race has no more “miracles” left in it then?
    Well for a start how about Methane Hydrates?
    How about Thorium Reactors?
    How about Molten Salt Reactors?
    How about LENR?
    How about Biotic Energy?
    And they are just the ones we know about.

    I have not posted much here but I do support nuclear power even though it scares the hell out of me. In fact the about the only thing that scares me MORE that a world full of poorly designed poorly maintained and poorly regulated nukes is the lack of them.IN ANY CASE does anybody who understands the basics of the nuclear industry as well as the basics of the fossil fuel depletion problem REALLY believe that we can and WILL build enough nukes to take the place of coal and natural gas as electricity generation fuels?

    It is pretty close to a mathematical sure thing that there will be some more catastrophic nuclear accidents. Old worn out reactors in my opinion can be safely operated in a country such as Germany or the US . Does anybody think an old worn out reactor will be taken out of service in a place such as Pakistan or Egypt or Bangladesh if they ever once have one?

    One way of understanding this issue is that the more we know the more we know about what is IMPOSSIBLE. We know there is no free lunch in terms of physics. Nobody is going to invent a perpetual motion machine or burn water in automobile engines. Nobody is going to extract energy from a vacuum.

    Any professionally trained farmer has a solid background in the basic biological sciences and any such honest professional farmer will tell you that biofuels are never ever going to safely supply more than a very minor percentage of the energy we get from fossil fuels – not within his lifetime at any rate. Biofuels are a broad smooth easy downhill highway to ecological hell if we get hooked on them but I do not wish to debate this particular issue right now. If anybody is interested we can come back to it later.

    A couple more bad accidents will set the nuclear industry back so far that few if any new nukes will be built in western countries for decades – maybe a lot of decades.

    An engineer builds a safety margin into his creations. In terms of the BIGGER BOX engineers are not in charge of our world. Politicians are the bosses. If they perceive that supporting nuclear power is not in their interests in terms of winning elections there will not be any new nukes built.

    Speaking as an ” engineer ” dealing in ” human” or ” political ” ” engineering” I maintain it is not safe to COUNT on having very many new nukes in service anytime soon .

    Nevertheless I do advocate pedal to the metal nuclear research and development in hopes that safe and affordable nukes can be built before the energy shit is well and truly in the economic fan.

    The ” miracle’ that I am figuratively praying for is renewable energy to become economical enough to shoulder enough of the load currently carried by fossil fuels. THen at least some of the world will be able to squeak thru the fossil fuel bottleneck that is headed our way.

    Once it is OBVIOUS to just about everybody that fossil fuels are NOT going to last forever then it will be politically possible to really work on conservation efficiency and renewables or other as yet undiscovered energy technologies and maybe preserve something approaching life as we know it today.

    Maybe there will be some new technology invented that will serve other than wind and solar and deep geothermal or tidal power or whatever. But we would be fools to COUNT on the invention of such speculative technologies and we would be fools twice over to count on them being commercialized and built out fast enough to keep us out of the poorhouse.

    Nuclear fusion after half a century of extraordinarily intensive and expensive research is still the energy source we will supposedly be using forty years from now. For what it is worth my opinion is that twenty years from now a fleet of working fusion plants feeding the grid will still be the energy source we will be ”counting on” in the year 2075 or 3000.

    I fully understand that wind and solar power are still not in the large majority of cases cost competitive with fossil fuels and that staggering sums of money have been invested in poorly thought out renewables investments already.

    But if those same billions had been spent on new cars or trips in airplanes nobody would be bitching about the waste. NOBODY AT ALL.

    At one time there were over five hundred companies building cars in the USA.

    Almost every last one of them went broke. Nothing new here this is the usual thing when a major new industry is getting established.

    I FULLY UNDERSTAND that conventional fossil fueled backup plants cost a lot of money to build, operate and maintain and that the owners of such plants MUST be fairly compensated or else the back up power needed to make renewables work will not be there.

    But after reading extensively in this area for years I have not run up on much that indicates to me that integrating lots and lots of renewables into the grid is IMPOSSIBLE.

    When you read closely you find that the engineers are simply saying it can’t be done AT PRESENT. Few if any say it can’t be done EVENTUALLY if somebody is willing to pay for the necessary upgrades and the necessary stand by back up capacity.

    SOMEBODY is going to HAVE to pay this cost eventually. The question as to who will pay it is much more a political question than it is an engineering question. Otherwise we are going to be doing without reliable and affordable electricity within the easily foreseeable future.

    I have relatives buried in communities nearby where coal used to be mined. A few of them are spending eternity in the mines themselves. These mines were worked out a long time before anybody ever heard of a ” war on coal”. There is a state park in Pennyslvania where the modern oil industry was born. It doesn’t take a genius to understand the implications of these two facts.

  9. Florian Schoepp says:

    I use the North Dakota Oil & Gas statistics since they seem to be much more reliable than IAEA etc. They are not full of drastic revisons and are a little under the radar of political manipulation.

    Using these #s in an EXCEL-sheet (only up to December 2014 to be on the safe side), I think we are currently seeing a plateau. If and when it develops into a decline remains to be seen.
    I think a bit more patience is required to look at a more reliable picture.

    Regarding cheap shale / profitable at $50: I don´t think so since the easy to drill locations have almost been developed (ND) and the potential sites at the edges are in geologically speaking difficult areas.

    Interesting that MENA has to employ record #s of rigs. May be a bit stretched, but couldn´t it be that they have to do it since basically the whole of Libya, Yemen and Syria are now offline?

  10. WmWatt says:

    Here in Canada tight oil supply is dropping while tar sands increases due to short term return on tight oil capital and long term on tar sands. Tar sands projects are coming on stream but longer term being cut back. Someone needs to plot production lagged to price. Also interesting an ounce of gold buys 26 barrels of oil, a near-record which might not last. Ratios that high in past have been short term spikes. Invites speculation on $US going on oil standard after going off gold standard as some claim. Would be nice if markets had a fixed standard of measure in whose absence dimensionless ratios might be better.

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