Peak Oil doctrine is still wrong. And still dead. #41. Oops #43
Remember that Peak oil doctrine states unequivocally that production peaks and then begins an irreversible, inevitable, unavoidable slide to zero. The curve of production inevitably follows a pattern that looks roughly comparable to a bell curve.
That means that by 2015 we should have already approached the point of very minimal oil production worldwide. Yesterday’s post described a century’s worth of failed predictions.
Where is production today? Umm…not exactly approaching zero.
Production is running so high in spite of collapse prices and in spite of increasing demand that there is a worldwide glut of crude. Having enough space to store all of the surplus oil is becoming an issue.
Here are just a few of the articles I have seen in the last week on point. This does not include another six or eight articles I’ve seen in the last month that make the same point.
11/13 – The American Interest (previously Via Meadia) – Oil Supply Reaches High Water Mark – Not only is Peak Oil completely dead (a.k.a. Peak Nitwitery as Carpe Diem would say), there’s actually logistical issues for how to store all the extra crude that is on the market. Worldwide inventory is 2.98B barrels.
Onshore facilities are so full that there is 100M barrels intentionally stored in tankers just offshore.
The pricing could get worse because those tankers are needed to keep the oil moving. If enough tankers are tied up just acting as storage tanks, that could force another drop in prices just to move the oil stored on tankers in order to free them up to move more oil.
11/13 – News on Invest – Global oil inventory hits record level – Amount of oil in storage is at a record level. OPEC says worldwide inventory is at the “excessive” level, which they say has only happened twice in the last 10 years.
To summarize a variety of comments in the article, it looks to me like OPEC is pushing output as fast as they can. Combine that with minor drop in shale production in the US means that output is at record levels. The drop in prices is pushing rising demand.
Financial Times has another article on point, but it is behind a paywall.
Not quite what Saudi Arabia had planned.
If you adhere to Peak Oil doctrine, I would guess you are thinking all those news outlets must be imagining things because this obviously just cannot be happening because Peak Oil doctrine says it can’t.