That’s fairly alarmist.

For one, with demand increasing at a pace of 1% or less, and with that figure falling, there isn’t much of a problem. Adjustments to demand are happening as we speak, and our global economic downturn is going to push it down further still.

For another, the oil industry was not particularly eager to invest a lot in exploration and alternative technologies with oil at $15 per barrel, it just wasn’t worth the bother. Now that oil prices have gone up, this is changing.

Here’s one example: Between 2000 and 2005, Shell invested an average of about $8.5 billion per year in exploration activities. During the last two years, that figure has increased to an average of $14.7 billion. The higher prices have encouraged them to look for more oil, so they have increased their spending accordingly.

The other major oil companies are increasing their expenses in a similar fashion. When there is money to be made in it, they jump in with both feet. When oil is cheap, they are less inclined to put nearly so much into it. Judging the present situation based upon activities undertaken when oil was cheap is going to lead to excessively conservative conclusions.

It is true that we are running out of the low hanging fruit of oil reserves, so the costs of extraction are bound to go up and cause prices that are above the old prices. The days of $15 oil are probably long gone. But that doesn’t mean that $135 is here to stay. It’s quite the opposite — it’s an blatant aberration that doesn’t correlate with the norm.

The meeting hasn’t happened yet, but what else can they realistically offer?

http://www.arabnews.com/?page=6&section=0&article=110870&d=14&m=6&y=2008

Arab News is surprisingly bereft of oil related items — probably the message is “there is more to Saudi Arabia than smelly, black sludge” — but the general tone has been “What the hell is the matter with our customers?!” For example:

http://www.arabnews.com/?page=6&section=0&article=110257&d=26&m=5&y=2008&pix=business.jpg&category=Business

Long term, the Saudis are more frightened than your average North American SUV owner, the unease notching up with each HEV, PHEV, or BEV announcement.

http://www.motortrend.com/features/consumer/112_0705_james_woolsey_interview/index.html

“I had a conversation with a senior Saudi who said that cars getting 500 mpg are going to ruin his country. I told him we don’t want to ruin Saudi Arabia, but we do think maybe you ought to get some other work.”

It won’t happen overnight, but it is increasingly clear that North America is realizing they don’t need all that oil to maintain the usual standard of living.

But today the #1 priority is simple market stability. The physics of the situation are with OPEC, but the psychology is against them. So they must increase production … but tempered by the fact that the Saudis (and OPEC in general) have been caught with their robes open in the past, when demand dropped while production was high, and would prefer not to make the mistake again.

P.S. I’ve only been at TTAC for a few weeks now, and this has been the most interesting thread yet. Aim all the incoming doomers at it!

Excellent video.

I grew up near coal mines in a house heated by coal; went to college in a coal mining area with sons and daughters of coal miners; knew coal miners; worked with Democratic Party UMW members in the 1972, 1974 and 1976 political campaigns; I’ve been in a coal mine. Mining coal is a difficult, dirty, even nasty business.

Guess what? Coal is going to be mined for generations to come.

Phil

http://news.yahoo.com/s/afp/20080614/ts_afp/ussaudioil_080614031419

http://youtube.com/watch?v=U2AjiSwBZoc

It’s not pep talk, it’s realism. Doom-saying isn’t a coping strategy.

Unfortunately it does nothing to dispel the laws of physics…

No laws of physics are touched, impeded nor challenged.

We don’t have time, we need oil now.

We have lots of time relative to our ability to mitigate and migrate. The next trillion barrels are already identified and the trillion after that comes with a little more effort. And that’s before we exploit kerogen or tar sands.

If we don’t get it our life as we know it will come to a halt.

You worry too much. If you want to worry about a real crisis, take up fresh water as your cause. That’s a real problem. Do you think this is the first energy crisis people have faced? England denuded itself of wood and then found coal. Coal was barely scratched relative to resources when oil was discovered. Well before we burned the first half-trillion barrels of oil, nuclear energy was developed. We have steady, incremental gains in photovoltaic conversion of solar irradiance to electricity. We have more tools for managing an energy migration than mankind had in any previous such crisis. And global population will peak by mid-century only to moderate and recede after that. The singular energy challenge overshadowing others is ensuring liquid fuels for transportation, or replacing them with other means of storing portable potent energy, hence interest in chemical batteries and that other battery, hydrogen.

Our ability to extract oil is at the very top at the moment. From now on the best we can hope for is to stay at the plateau.

This is blind dogma that neither the verifiable presence of oil in the planet, nor economics, nor established trends in technology support. It’s just mindless hand-wringing that ignores every persistent trend in human resourcefulness, especially of the technical variety.

But even to stand still we must continuously add the depletion loss which is at the very minimum at least 2% a year. After we fail to do that we are going down at the exponential rate of at least 2% a year maybe more, initially slowly and later very fast. This is just exponential growth math.

2% per year depletion loss is not “exponential math.” You assume the wells we have are all the wells we’re going to get. That’s not remotely true. The next couple trillion barrels will come from a combination of existing wells — some of which are declining — new deep water wells, revived wells, deposits that are surprisingly refilling from below, wells in areas now artificially off limits for drilling. And then we still have unconventional oils that haven’t hit anyone’s gas tank yet. Again, depending what expert you reference, we see 2 – 4 trillion barrels of oil remaining before counting kerogen. Even at 40 or 50 billion barrels consumption annually, we have decades to engineer and plan our transition. It’s already started.

By far the biggest deposit of alternative oil is in the Canadian tar sands.

Wrong. Unless you’re a stickler for excluding kerogen from the inventory of oils or oil-like energy, shale oil deposits in the US alone dwarf Canadian tar sands.

However tar sands don’t scale well because they are a mining operation which is very different from the conventional drilling. The very best that can be expected from this mining technique according to the industry itself is 3 million bpd.

It’s a questionable claim but OK. You assume today’s constraints will persist and that we’ll learn nothing about how to improve our extraction productivity. History says any such assumption is virtually guaranteed to be wrong.

This assumes going full tilt regardless of consequence which happen to be total environmental devastation.

Every existing resource extraction technique was once environmentally devastating, and yet we learned to make them all cleaner and restore extraction sites. This too will happen with tar sands, if we make it a priority. Again, how we do things today is not static.

Even assuming we can decide to turn Alberta into Sahara, but with poison in the ground and water, to convert all the sands to oil we would have to use all natural gas and all fresh water in the world, the two main ingredients in the conversion process. I hope you can see that this again is not very practical.

We have many industrial processes that depend on large quantities of fresh water, which we’ve learned to recycle, store, restore and geofilter. Tar sands will be developed when the economics are compelling. But I’m not counting on tar sands in a big way.

With at least a couple trillion barrels of recoverable oil identified, we not only have time to diversify our energy dependencies, reserving oil for what it’s most appropriate for, we also retain a vast repository of shale oil beyond the crude we now depend upon. Its existence has been known for decades. We know how to begin extracting and using it but at relatively high cost. The knowledge and productivity ramp will improve with experience. And we have the world’s largest deposit of it right here in the continental USA, vastly larger than Saudi Arabia has oil. We also have centuries worth of coal within our borders for which we are still learning how to diversify the matter state of its hydrocarbon energy.

The answer is in keeping a level head. Market forces are and will trim, even plunge oil demand if the supply constraints you fear aren’t overcome. We have an array of technologies we are under-utilizing today that can take pressure off oil, and we are already on a course to steadily improve efficiency of all machinery that consumes energy. We will choose to move progressively away from oil long before we “run out.” As in freeway traffic ground to a dead halt due to the backwave generated by an incident ahead and long since rectified, just because you’re hamstrung momentarily doesn’t mean you won’t be moving forward soon.

Phil

Your cheerful pep-talk is good at your investor meetings and in your multipage management reports. Unfortunately it doesn’t nothing to dispel the laws of physics in the ground and the practical constraints in our extraction techniques.

Nothing of major significance was discovered in the last decade or 3. Your dismissal that it doesn’t mean something major will be discovered in the future is meaningless in the practical world. We don’t have time, we need oil now. If we don’t get it our life as we know it will come to a halt. Even exploration presupposes a viable energy source.

Our ability to extract oil is at the the very top at the moment. From now on the best we can hope for is to stay at the plateau. But even to stand still we must continuously add the depletion loss which is at the very minimum at least 2% a year. After we fail to do that we are going down at the exponential rate of at least 2% a year maybe more, initially slowly and later very fast. This is just exponential growth math.

Alas, the alternatives. By far the biggest deposit of alternative oil is in the Canadian tar sands. However tar sands don’t scale well because they are a mining operation which is very different from the conventional drilling. The very best that can be expected from this mining technique according to the industry itself is 3 million bpd. This assumes going full tilt regardless of consequence which happen to be total environmental devastation. Even assuming we can decide to turn Alberta into Sahara, but with poison in the ground and water, to convert all the sands to oil we would have to use all natural gas and all fresh water in the world, the two main ingredients in the conversion process. I hope you can see that this again is not very practical.

The discovery record of the last decade is not an indicator that new discoveries aren’t in our future. By the way, that Brazilian offshore field you credit for 8B barrels is estimated by some to be as much as 4X that. It’s too new to know. It hasn’t been drilled. Also dig and note the number of headlines that reported it as a “surprise” discovery. The deep water parts of the globe have not been comprehensively surveyed for oil presence, and frankly the technology for doing so is still evolving. We’re also still finding oil in the Gulf of Mexico. Is the discovery of up to 15B barrels 30,000 feet beneath the Gulf of Mexico announced in 2006 among the absence of “major” oil discoveries you cite for the last decade? Since then, the Gulf is yielding more promise. But the extraction technologies for working at that depth, beneath deep water, is evolving on-the-fly.

Constant delays at all major new projects happen because they underestimated the difficulty in extracting the oil. In many cases the technology is not mature enough to attempt the extraction fro instance from 6 miles under the sea bed (where many of the new fields are). The technology is being developed on the fly to meet the specific demands of each new field driving the costs sky high, higher then the cost of the oil that is to be extracted. The incremental technological improvements are not enough to meet these demands.

So what? This is a temporary problem and it has nothing to do with Peak Oil as a supply limit, only as a temporary production constraint. Do you really believe we won’t overcome the current extraction obstacles encountered during the learning curve?

My arguments are physical. What I am saying, just repeating for others have been saying for some time, is that there are physical limits to what is in the ground and our ability to get it out. When these 2 meet it’s called PO. Markets, economics, history, the alignment of the starts in the sky, all of that is irrelevant is irrelevant at this point in the overall scheme of the things.

Your argument assumes discovery and extraction techniques remain static. We already can finger the next trillion barrels of oil and that doesn’t exhaust whats in the ground. As has been true for the last 150 years, our ability to extract oil progressively improves against the challenge of going deeper or more remotely for it. Moreover, you and all other Peak Oil fearmongers have been silent on the large amounts of unconventional oils and kerogen that are available at elevated economics. We have barely begun to get on the efficiency evolution curve with respect to those sources.

Hydrocarbons in the planet aren’t our constraint. The lulls in energy investment when oil prices are low ensure stress when demand inevitably spikes. You can see this today in the lack of drilling equipment and well inventory. It’s not much different than the recurring phenomenon that when commercial real estate markets are hot, too many buildings are built, glutting said markets until they stall and then cessation of building lasts too long until a new shortage develops. It’s a big world and we’ve only lit the match on the first trillion barrels of crude. Relax, don’t panic, use less gasoline and heating oil if you want. Stop flying. Downsize. Get solar panels. Whatever floats you. It all helps. Just stop worrying about running out of oil. Again, BP can finger almost 1.3 trillion barrels of oil we know how to access. We don’t have to discover exactly what you use every decade for long term discoveries to increase the pool. Yet still, unconventional oils and coal liquification offer a multiple of the oil cache when we choose to develop them.

Phil

Here is the exact quote showing that our oil use/depletion is running way ahead of the new discoveries.

The world now consumes 31.8 billion barrels of oil per year. 1978 was the last year that this volume of oil was discovered and more recently discovery has been running at less than 10 billion barrels per year. It is an utterly forlorn hope that exploration and new discoveries may alleviate the current supply crisis.

How long can this go on?

Your rhetorical flourish doesn’t address the hard physical limits that I listed.

No major oil discoveries in the last 10 years. From last year now forward any new discoveries will most likely not even meet declines in the current fields. It’s not because the world hasn’t been fully surveyed yet; the opposite is the case.
It’s been surveyed so thoroughly that most of the stuff has already been found. Whatever is left that hasn’t been found yet, hasn’t been found because we don’t even have the technology to find it, never mind to get it out of the ground.

Constant delays at all major new projects happen because they underestimated the difficulty in extracting the oil. In many cases the technology is not mature enough to attempt the extraction fro instance from 6 miles under the sea bed (where many of the new fields are). The technology is being developed on the fly to meet the specific demands of each new field driving the costs sky high, higher then the cost of the oil that is to be extracted. The incremental technological improvements are not enough to meet these demands.

Pch101,

How am I changing subject by pointing you to a graph showing the declining supply of oil on the world markets. The reason this is instructive is that it doesn’t matter how much oil is extracted if that oil doesn’t get to the market because the suppliers keep it to themselves.

The suppliers are going to extract a bit more oil in the next 5 years but are going to keep even more of it and making even less available to oil importers such as USA. This is a double-whammy, not only is the oil growth minimal and not able to meet projected demand, even less is going to be available on the world markets because of skyrocketing demand in oil-producing countries. Why is the demand going up through the roof in these countries? Because of the price of oil. These countries have so much money now that they can afford to buy new cars like never before, up 60% in Russia.

In general your arguments are like Phill’s and are based on economics, human nature, stock markets, historical price fluctuations etc.

My arguments are physical. What I am saying, just repeating for others have been saying for some time, is that there are physical limits to what is in the ground and our ability to get it out. When these 2 meet it’s called PO. Markets, economics, history, the alignment of the starts in the sky, all of that is irrelevant is irrelevant at this point in the overall scheme of the things.

This physical barrier is already starting to sink in with oil traders that’s why the price is where it is.

The bubble graph is interesting, but if it is drawing conclusions from the same source as the table at the bottom of the page then it is questionable. That table is just wrong.

Well, what can you expect from those damned oil companies. Those numbers are actually from BP’s oil and energy survey, much touted, much lauded, much independently audited and much used when it was recently announced …

Who to believe? Indeed, who to believe? If you won’t believe these numbers, Landcrusher, then we’re flying blind.

For the whole lying sack of statistics you can go to their site and lodge your complaint. And remember, they’re the good guys, right?
http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622

Now you’re trying to change the subject. The issue you previously addressed was one of supply — with a free market for oil, the source is irrelevant from an economic standpoint.

What the peak oil crowd always seems to forget is demand. At most, demand is casually referenced as if it should be assumed that demand is on a constant upward trajectory, case closed.

As we can see from the historical data, that is anything but true. In fact, demand fluctuates quite a bit and about 1/6th of the time, it falls. Furthermore, the growth of our appetite for oil is slowing down, not increasing. So that is a bad assumption.

I think prices aren’t as alarming as people express here but are high enough to affect demand (this has been happening in California for a year-and-a-half.) And I do believe Peak Oil is a legitimate phenomenon, but not today nor anytime soon.

The growing specter of stagflation and the economic downturn suggests that oil prices at their present levels are quite disruptive. Coupled with the credit crisis, it’s a real threat. But yes, I agree, peak oil isn’t here yet, not by a long shot.

Well, not exactly. I think prices aren’t as alarming as people express here but are high enough to affect demand (this has been happening in California for a year-and-a-half.) And I do believe Peak Oil is a legitimate phenomenon, but not today nor anytime soon.

Phil

The world is currently producing between 85-87 million barrels per day. The demand is currently for slightly more than that. This has been the case for the last few years. Under normal market conditions this would prompt producers to increase the output to meet the demand. This isn’t happening even as the price has been steadily climbing since 1999, steeply since 2005. Why? the simplest most logical explanation is they can’t because either there isn’t more of it or it’s impossible to get efficiently, whichever it is doesn’t matter.

There’s no conflict between the fact that the world isn’t running out of oil and the situation of the moment where production is flat. Low prices prior to 2005 slackened exploration, and large amounts of oil are kept out of exploitation due to a variety of environmental, aesthetics and vanity concerns, real and imagined. The 85mm barrel/day plateau we have now is a man-made constraint, not natural. BP is not a wildly optimistic assessor of available oil. Their view of extractable oil isn’t in any way in conflict with the current production plateau.

…in November IEA will finally acknowledge that their projects up until now were too optimistic and that the oil production will not increase fast enough to meet the projected demand.

Production will not increase fast enough to meet projected demand in what period of time? It’s a moving target. Sustained high prices will boost exploration and also exploitation of more difficult deposits, while same prices will moderate demand as people conserve, upgrade to more efficient consumption machinery or migrate energy demands to other sources.

The bosses of ConocoPhillips and Total both stated publicly that the world will not be able to produce more than 100 million barrels per day ever.

I can’t comment on whether they said this or not, but in the 1970s there were “experts” who were certain we’d never be able to push production beyond the 60mm bpd we passed in 1985.

I think last year was the first year ever that the new found estimated oil discoveries didn’t even cover the actual decline in the output of the existing fields. The output of the British North Sea has been steadily going down since 1999, it’s down 40% overall, there is no chance it will ever increase. The output of Mexico is projected to collapse with the next 5 years as their output goes down by as much as 18% a year. Output of Saudi Arabia is at its zenith, numerous knowledgeable people who have worked for Aramco said publicly that Saudi Arabia/Aramco are either at its peak capacity or past it already with some fields declining at the rate of 8% a year; again virtually no possibility that they can ever increase their output. The best hope is that Aramco can continue at the current pace for the next decade.

Part of Mexico’s problem is that Pemex, their state-owned oil monopoly lacks the technology and expertise to fully exploit Mexico’s territorial reserves. The North Sea field is declining as it’s exploitation matures. So what? None of this alarm recognizes deep water oil, unconventional oils or that which is held back from development for other reasons.

Hence we are in a period of peak oil where a production might still increase slightly but way below the demand. Such a situation hasn’t yet happened in the history of the world so don’t look for a precedent on the commodity markets. The oil market is volatile but the long term trend for oil is to go up as the demand will continue to outstrip the supply.

This is the notion of Peak Oil as an artificial phenomenon, not the idea of P.O. as a natural limit. There is more oil identifiable and known in the planet than has been pumped to date, and the globe hasn’t been comprehensively surveyed. When we have a oil and oil-like energy sources that can extend the utility of current energy infrastructure by *centuries* as previously noted, Peak Oil paranoia isn’t actionable. We might elect to not extend our oil dependency by 200 – 400 years via unconventional oils and coal liquification, curtailing instead and perhaps ending oil’s dominant role within this century. But that would be a choice, not a supply imperative.

All the necessary facts to understand this situation are in this and other threads here. You just have to distinguish locally and temporally restricted data from the genuine underlying facts and trends. A strong argument can be made that $200 oil is the fastest route to eliminating perceived supply restrictions for a couple centuries or more, by increasing *reserves* faster than demand rises. How rapidly *production* rises under that scenario is a different matter entirely, since sophisticated producers will actively work to tune the market for optimum value.

Phil

I’d like to buy the world a coke, and keep it company, that’s the song I sing….

http://www.theoildrum.com/files/luis_exports.png

It’s taken from this article:

http://europe.theoildrum.com/node/4007#more

The graph shows oil exports have been steadily declining since 2005. So unless the demand in the oil importing countries starts declining at least at the same rate as the oil exports, the price of oil ain’t going down, not mid to long-term anyway.

If you are going to have an economics discussion, then supply must always meet demand at SOME price.

Demand cannot, by definition, outstrip supply over the long term unless the market price is being capped artificially.

When anyone throws out this whole thing about demand being greater than supply over the past few years my BS meter goes off.

So there, I call BULLSHIT!

Actually, we’re not. He thinks that prices are fine and that peak oil is an impossibility. I believe that prices are crippling enough to encourage demand disruptions, and that peak oil could occur at some point in the future. (Sorry to get your hopes up there…)

The world is currently producing between 85-87 million barrels per day. The demand is currently for slightly more than that. This has been the case for the last few years. Under normal market conditions this would prompt producers to increase the output to meet the demand. This isn’t happening even as the price has been steadily climbing since 1999, steeply since 2005. Why? the simplest most logical explanation is they can’t because either there isn’t more of it or it’s impossible to get efficiently, whichever it is doesn’t matter.

If you look at EIA’s global figures, supplies matched or exceeded demand in 2003-2005, and demand exceeded supply by a mere 0.029% during 2006.

2007 was out of balance…by a whopping 1%. That was covered by available stocks, and it is not difficult to decrease global demand by 1%, as the early eighties makes clear.

There have been supply disruptions in some of the non-OPEC countries, to be sure. Much of that has been offset by increased OPEC production. But it takes time for suppliers to react, they cannot turn on a dime. That’s why supplies are inelastic in the short run, but less so over the medium term. The price run up only really began in 2005, so producers haven’t had long to react.

Meantime, the rate of demand growth is falling, and if history bears out, could go negative once again. Oil consumption goes hand in hand with prosperity, so a global economic downturn should stunt demand, putting everything back into balance and creating enough supply to naturally push prices down.

Groups such as the American Petroleum Institute reports increased drilling and rig activity. While these supplies to be added are modest, they will combine with demand growth slowing and alleviate any supply crunches.

But the demand is projected to be 130 mbpd (million barrels per day) by 2030.

That’s great (well, actually, it isn’t), but it doesn’t affect the price in 2008. If I walked into my local Apple store and offered a $1 for an Ipod based upon its 2030 value, they’d probably chuck me out the door after thoroughly ridiculing me for such specious logic.

Once again, the peak oil argument is independent of discussions of the current price and how it got to be at this level. 2030 is 2030, 2008 is 2008.

I am glad you and Phil are on the same side this time around. And now just like Phil you are light on facts and long on rhetoric :)

Here are a few relevant facts regarding oil availability and production. The world is currently producing between 85-87 million barrels per day. The demand is currently for slightly more than that. This has been the case for the last few years. Under normal market conditions this would prompt producers to increase the output to meet the demand. This isn’t happening even as the price has been steadily climbing since 1999, steeply since 2005. Why? the simplest most logical explanation is they can’t because either there isn’t more of it or it’s impossible to get efficiently, whichever it is doesn’t matter.

The IEA and CERA are finally coming around from their rosy projections to reality. It’s expected that in its report in November IEA will finally acknowledge that their projects up until now were too optimistic and that the oil production will not increase fast enough to meet the projected demand. Not surprising since the IEA predictions were not really predictions at all but assumptions, they just assumed that markets being what they are will automatically meet the projected demand even if with some time-lag.

But the demand is projected to be 130 mbpd (million barrels per day) by 2030.

The bosses of ConocoPhillips and Total both stated publicly that the world will not be able to produce more than 100 million barrels per day ever. Because they are heads of 2 oil companies whose stock price is directly linked to their future ability to produce oil we can safely assume that their projections are still a bit too optimistic, after all they don’t want to send their stock into the toilet. If we discount 5-10% due to this we arrive at 90-95 mbpd which is not far off the 90 mbpd that many geologists, chemists , engineers predict at theoildrum.com is the maximum oil production we will ever able to achieve. In other words we see a consensus being formed in the oil business between the wild-eyed optimists, mostly the management of the oil companies (whose pay is linked to the stock performance of their companies) and the doomsayers, specifically the experts working for these oil companies, geologists, chemists, engineers who are paid by doing their job properly meaning being able to estimate, find, extract the actual oil.

I think last year was the first year ever that the new found estimated oil discoveries didn’t even cover the actual decline in the output of the existing fields. The output of the British North Sea has been steadily going down since 1999, it’s down 40% overall, there is no chance it will ever increase. The output of Mexico is projected to collapse with the next 5 years as their output goes down by as much as 18% a year. Output of Saudi Arabia is at its zenith, numerous knowledgeable people who have worked for Aramco said publicly that Saudi Arabia/Aramco are either at its peak capacity or past it already with some fields declining at the rate of 8% a year; again virtually no possibility that they can ever increase their output. The best hope is that Aramco can continue at the current pace for the next decade.

There has been no major field discoveries in the last 10 years. One of the biggest I believe is offshore Brazil with estimated 8 billion barrels which is enough to cover US needs for 7-12 months. Whatever discoveries there have been were small barely covering the declines of the existing fields.

There are numerous oil projects in development but almost all are plagued by delays usually major with big cost overruns. This is due to the fact that the cost of extracting oil is actually going up even faster than the oil price itself and that should tell you something. For good summary see
http://en.wikipedia.org/wiki/Oil_Megaprojects

Hence we are in a period of peak oil where a production might still increase slightly but way below the demand. Such a situation hasn’t yet happened in the history of the world so don’t look for a precedent on the commodity markets. The oil market is volatile but the long term trend for oil is to go up as the demand will continue to outstrip the supply.

The bubble graph is interesting, but if it is drawing conclusions from the same source as the table at the bottom of the page then it is questionable. That table is just wrong.

That’s absolutely and utterly false. Those figures are for global oil demand per day. The entire planet, the entire population.

Those figures show that the China/India story is somewhat inaccurate. While they are certainly on a path to greater consumption and while their demand growth outpaces the world as a whole, their increased consumption is offset by reductions elsewhere so that the global total is not radically increasing.

That is probably due largely to the fact that much of their increased consumption is attributable to offshored manufacturing that just transfered energy usage from other parts of the world to Asia. They use more, but we slow our consumption growth accordingly as their factories displace ours.

Oil demand was growing much, much faster during the 1970’s than during any period in the last decade, save for the anomalous year of 2004. That is a fact, and very clear from the table.

The EIA is neutral. Your peak oil advocacy sites have a preconceived agenda. If you only refer to sources that say what you want to hear, then naturally you will confirm your preconceptions every time.

Study this interactive chart. Pay particular attention to the blue dot – set the animation to demonstrate relative sizes.

Enjoy. It’s a better depiction than yours, as it breaks down world regional demand relative to supply.

http://www.theoildrum.com/node/4138

And, Pch101, you probably know this, but your “statistic” ingeniously fails to take into account not only population growth, and an increase in vehicles needing petroleum — but also doesn’t consider the addition of nations experiencing hypergrowth.
And that’s BP chief Heyward’s point in the op-ed he wrote for the FT — but then you probably know a lot more about oil and demand than he does?

As I wrote above, there are a lot of fun games with statistics being played by people who have a vested interest in ignoring the problem. (For whatever reason.)

Bad guess. You can simply check with the EIA, the data is readily available, but unfortunately, posting links here doesn’t always work so well.

Here it is:

Year / Oil consumption, barrels per day / Change
1970 / 46,808 / –
1971 / 49,416 / 2,608
1972 / 53,094 / 3,678
1973 / 57,237 / 4,143
1974 / 56,677 / (560)
1975 / 56,198 / (479)
1976 / 59,673 / 3,475
1977 / 61,826 / 2,153
1978 / 64,158 / 2,332
1979 / 65,220 / 1,062
1980 / 63,114 / (2,106)
1981 / 60,944 / (2,170)
1982 / 59,543 / (1,401)
1983 / 58,778 / (765)
1984 / 59,815 / 1,037
1985 / 60,085 / 270
1986 / 61,809 / 1,724
1987 / 63,095 / 1,286
1988 / 64,965 / 1,870
1989 / 66,078 / 1,112
1990 / 66,676 / 598
1991 / 67,277 / 601
1992 / 67,463 / 187
1993 / 67,596 / 132
1994 / 68,863 / 1,267
1995 / 70,067 / 1,204
1996 / 71,627 / 1,560
1997 / 73,372 / 1,746
1998 / 74,004 / 632
1999 / 75,664 / 1,660
2000 / 76,662 / 998
2001 / 77,400 / 738
2002 / 78,036 / 636
2003 / 79,612 / 1,576
2004 / 82,330 / 2,718
2005 / 83,650 / 1,320
2006 / 84,622 / 973
2007 / 85,385 / 762

Note 2006 and 2007. Both are below the 36 year average of +1,043 barrels per day, and certainly far below anything experienced during the OPEC crisis of the seventies.

Don’t believe the hype. It’s pretty obvious why 2004 got the attention of speculators. Combine that with the war, and oil becomes a fun bet.

But demand growth is tapering off. As we can see from historical data, demand growth has been negative once consumers had a chance to adjust. The medium run and short run pictures are not the same.

I’m still waiting for an example of all of those commodities that managed to defy gravity by keeping their short term leaps permanently. If anyone has some examples to show us, please present it.