Category Archives: Peak Oil

Data Watch: US Natural Gas Monthly Production March 2013

Posted on June 6, 2013 | Leave a comment

The U.S. government agency The Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on May 31 and covers the period up until March 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • March 2013 natural gas dry production: 2,037 bcf,  plus 1.0% year-on-year
  • Average monthly production for the 12 months to March 2013: 2,003 bcf, +2.5% over the same period the previous year

Since the end of 2011, the rate of production increase has levelled off (click chart below for larger image); March saw the year-on-year growth rate move back into positive territory (keeping in mind that negative number in February was distorted by the leap year in 2012), but the 12-month moving average growth rates continues to decline.

US Natural Gas Production March 2013 jpeg

Much recent media attention has centred on a so-called shale-gas revolution in the United States and, in particular, the ability of shale gas to boost overall volume of natural gas production. Many claims are made with respect to the prospective expansion in shale gas production in the coming years including the following:

  • Shale gas will provide a low-cost source of natural gas, and thus cheap energy, for decades to come. This, in turn, will boost the competitiveness of the U.S. economy.
  • The U.S. will move toward an era of energy self-sufficiency, which will help buttress the country’s geopolitical security.
  • The scale of shale gas production will be sufficient to allow the U.S. to commence natural gas exports, thus transforming energy markets outside of the U.S. such as those in Europe.
  • Increased natural gas production in the U.S. will mitigate carbon emissions through displacing coal and so reduce the risk of dangerous climate change.

For these claims to be substantiated, significant year-on-year rises in U.S. natural  gas production will be required over an extended period. Through tracking monthly production of natural gas, a non-specialist can confirm or refute whether large rises in natural gas production are being achieved and, therefore, whether the claims associated with a shale-gas revolution are credible. In short, the monthly numbers allow you to evaluate the hype. Monthly data are currently not showing any material increase in production.

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Posted in Peak Oil, Resource Constraints

More Gas Out There (But at What Price?)

Posted on May 16, 2013 | Leave a comment

The important biennial assessment of United States natural gas resources was released last month by the Potential Gas Committee, a grouping of 145 volunteer specialists in the natural gas field. The press release for the report can be found here and the accompanying slides here.

The report always attracts a lot of erroneous claims that the United States has 100-years of natural gas; indeed, President Obama repeated the same mistake in his State of the Union address that I previously blogged on here. The report is principally concerned with “technically recoverable natural gas resources”; that is, those gas resources that can be recovered if price was not an issue. To quote directly from the press release:

Dr. Curtis cautioned, however, that the current assessment assumes neither a time schedule nor a specific market price for the discovery and production of future gas supply. “Assessments of the Potential Gas Committee represent our best understanding of the geological endowment of the technically recoverable natural gas resource of the United States,” he explained.

Keeping this caveat in mind, fracking technology has nonetheless led to a boom in gas prospecting, which is clearly visible in the recent uptrend in natural gas resources stated in consecutive biennial reports (click for larger image):

Total Potential Gas Reserves 2013 jpeg

The 2,226 trillion cubic feet of traditional gas resources (traditional by their definition includes shale gas) compares with 305 tcf of proved reserves as published by the Energy Information Administration (EIA).

Natural Gas Assessment 2013 jpeg

The EIA’s proved reserves of  crude oil, natural gas liquids and natural gas can be found here (latest figures are for 2010); moreover, the 305 tcf is for dry natural gas and can be found in this EIA table here. Proved reserves (as opposed to resources) are those known gas reservoirs from which gas can be extracted at existing prices, technology and infrastructure. To put these numbers in context, the U.S. consumed 25.5 tcf in 2012, so proved reserves are sufficient for 12 years of consumption.

Of the three resource categories—probably, possible and speculative—probable resources are equivalent to 28  years of 2012 equivalent consumption. A more thorough treatment of the assessment methodology and category definitions can be found in this this appendix to the MIT 2001 interdisciplinary report entitled “The Future of Natural Gas” which is well worth reading and can be found here.

Resource Assessment by Category jpeg

The migration of speculative, possible and probable resource toward, or into, proved reserve is dependent on two main variables: price and technology. A rising price may move some possible resources into proved reserves, but it may also reduce the competitiveness of natural gas vis a vis coal and renewables and ultimately stymie economic growth. Accordingly, any commentary within the media claiming that fracking technology has removed the energy constraint on the U.S. economy should be taken with a pinch of salt.

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Posted in Peak Oil, Resource Constraints

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Data Watch: US Natural Gas Monthly Production February 2013

Posted on May 2, 2013 | Leave a comment

The U.S. government agency The Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on April 30 and covers the period up until February 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • February 2013 natural gas dry production: 1,852 bcf,  -2.0% year-on-year
  • Average monthly production for the 12 months to February 2013: 2,001 bcf, +2.9% over the same period the previous year

Since the end of 2011, the rate of production increase has levelled off (click chart below for larger image); for the most recent two months of data, we have seen year-on-year declines.

US Dry Gas Production Feb 2013 jpeg

Much recent media attention has centred on a so-called shale-gas revolution in the United States and, in particular, the ability of shale gas to boost overall volume of natural gas production. Many claims are made with respect to the prospective expansion in shale gas production in the coming years including the following:

  • Shale gas will provide a low-cost source of natural gas, and thus cheap energy, for decades to come. This, in turn, will boost the competitiveness of the U.S. economy.
  • The U.S. will move toward an era of energy self-sufficiency, which will help buttress the country’s geopolitical security.
  • The scale of shale gas production will be sufficient to allow the U.S. to commence natural gas exports, thus transforming energy markets outside of the U.S. such as those in Europe.
  • Increased natural gas production in the U.S. will mitigate carbon emissions through displacing coal and so reduce the risk of dangerous climate change.

For these claims to be substantiated, significant year-on-year rises in U.S. natural  gas production will be required over an extended period. Through tracking monthly production of natural gas, a non-specialist can confirm or refute whether large rises in natural gas production are being achieved and, therefore, whether the claims associated with a shale-gas revolution are credible. In short, the monthly numbers allow you to evaluate the hype. Monthly data are currently not showing any increase in production.

→ Leave a comment

Posted in Peak Oil, Resource Constraints

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Data Watch: US and Global Crude Oil Monthly Production

Posted on April 30, 2013 | Leave a comment

On April 29th, the U.S. government agency The Energy Information Administration (EIA) announced provisional crude oil production figures for February 2013. Key points:

  • February crude oil production 217.1 million barrels, equivalent to 7.2 million barrels per day
  • Change over previous month, + 2.4% on barrels per day (bpd) basis; year-on-year change, +10.9% on bpd basis
  • February total crude oil plus natural gas liquids 269.6 million barrels, equivalent to 9.6 bpd

As can be seen from the chart below (click for larger image, link to original data here), the fracking of tight oil formations in the U.S. has made a significant impact on U.S. crude production. The critical question is whether the current large year-on-year percentage growth rates in oil production can be sustained (click for larger image).

U.S. Crude Oil Production jpeg

Crude oil is a globally traded commodity, and U.S. production numbers need to be placed in the context of world supply and demand. In its April 2013 Oil Market Report, the International Energy Agency (IEA)  records global ‘all liquids’ production as averaging 90.6 million bpd in Q1 2013, flat over the same period the previous year.

For March 2013, global supply was 90.7 million bpd (here). Over the last 3 months, rises in non-OPEC supplies have been offset by falls within OPEC. The degree to which this is due to supply constraints or deliberate production cuts by Saudi Arabia to maintain the oil price above $100 per barrel in the face of a slowing global economy is difficult to tell.

World Oil Monthly Supply jpeg

Full quarterly IEA world supply-and-demand figures, including Q3 2013 estimates, can be found here. Click for larger image to see the summary table.

World Supply and Demand IEA copy

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Links for the Week Ending 7th April

Posted on April 7, 2013 | Leave a comment
  • The Economist magazine last week carried a long article on climate sensitivity together with a leader article on the same theme here. Skeptical Science’s Dana Nuccitelli posted a rebuttal here, which captures some of my own concerns over The Economist‘s interpretation of the science. It is obvious, however, that Nuccitelli has never read The Economist, since he characterises the magazine as having strayed into the field of climate change commentary almost by accident. This is ridiculous: The Economist has been doing in-depth reporting on climate change issues for many years and has been far more consistent in its coverage than either The Wall Street Journal or The Financial Times. Moreover, The Economist does matter since it has become the house journal of the global corporate, financial and political elite.  Indeed, The Economist‘s coverage of climate change deserves a post all of its own (I am working on one).
  • If I was rather ambivalent on Skeptical Science’s treatment of The Economist, they quickly redeemed themselves with a wonderful post on the history of climate change science. The definitive book on this topic is Spencer Weart’s The Discovery of Global Warming, but John Mason has produced a great condensed version of the history including some wonderful timeline graphics.
  • Professor James Hamilton, one of the world’s top econometricians, is a rare example of an economist who understands the threat posed by oil depletion. In this post on his blog Econbrowser, he evaluates the oil supply and price prediction record (from 2005) of the cornucopians, as represented by Daniel Yergin, and the peak oilers, as represented by Boone Pickens. The conclusion? Pickens won hands down.
  • If you are curious about alternative views on economics, then I recommend having a look at such ecological economists as Herman Daly. Jushua Farley, the co-author with Daly of the iconic textbook Ecological Economics, explains the difference between ecological economics and traditional neoclassical economics here. Farley’s main complaints are with the obsessive quest for economic growth in traditional economics and the inability of neoclassical economics to accept the empirical evidence before their eyes; for example, markets are not taking us toward a stable equilibrium.
  • If you want to understand what could possibly be driving the weird weather in northern European and beyond then read this article by the leading climate scientist Stefan Rahmstorf via Eli Rabett. You reap what you sow.

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Posted in Climate Change, Peak Oil, Post Growth, Resource Constraints

One Reason We Struggle to Grow: Energy Return on Investment (EROI)

Posted on April 7, 2013 | Leave a comment

This week’s edition of Scientific American has a couple of great infographics put together by Mason Inman on Energy Return on Investment (EROI). Strangely, these graphics are behind a paywall on Scientific American’s web site but are available open access on the site of Nature, the sister publication, here (click for larger image).

Liquid Fuels EROI jpeg

The infographics show that we are needing to use an ever-larger amount of energy in order to harvest energy from liquid fossil fuels. From a world in which we used to invest one unit of energy in conventional land-based oil production and get perhaps 50 units out, we are moving to a world where we now invest one unit of energy in unconventional fossil fuels but only get five or six units out.

For those interested in the source of the numbers that sit behind this graphic, then Inman has done us a service by listing them all here. As would be expected in any piece on energy extraction efficiency, he also references Professor Charles Hall, the father of EROI and, indeed, conducts a Q&A with Hall here. If you want to understand the implications of a low EROI, Hall explains it this way: Continue reading →

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Data Watch: US and Global Crude Oil Monthly Production, January 2013

Posted on April 3, 2013 | Leave a comment

On March 28th, the U.S. government agency The Energy Information Administration (EIA) announced provisional crude oil production figures for January 2013. Key points:

  • January crude oil production 217.1 million barrels, equivalent to 7 million barrels per day
  • Change over previous month, -1.3%; year-on-year change, +14.5%
  • January total crude oil plus natural gas liquids 290.3 million barrels, equivalent to 9.4 million barrel per day

As can be seen from the chart below (click for larger image, link to original data here), the fracking of tight oil formations in the U.S. has made a significant impact on U.S. crude production. The critical question is whether the current large year-on-year percentage growth rates in oil production can be sustained.

US Crude OIl Production jpeg

In addition, crude oil is a globally traded commodity, and U.S. production numbers need to be placed in the context of world supply and demand. In its March 2013 Oil Market Report, the International Energy Agency (IEA)  shows global ‘all liquids’ production averaging 91.4 million barrels per day in Q4 2002, up 2.2% year on year (click for larger image). February 2013 production was 90.8 million barrels per day (here).

IEA Oil Supply and Demand copy

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Posted in Peak Oil

Data Watch: US Natural Gas Monthly Production January 2013

Posted on April 1, 2013 | Leave a comment

The U.S. government agency The Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on March 27 and covers the period up until January 2013.

Data is reported in billion cubic feet (bcf). Key points:

  • January 2013 natural gas dry production: 2,022 bcf, -1.1% year-on-year
  • Average monthly production for the 12 months to December 2012: 2,002 bcf, +4.1% over the same period the previous year

Since the end of 2011, the rate of production increase has levelled off (click chart above for larger image).

US Dry Gas Production January 2013 jpeg

Much recent media attention has centred on a so-called shale-gas revolution in the United States and in particular the ability of shale gas to boost overall volume of natural gas production. Many claims are made with respect to the prospective expansion in shale gas production in coming years including the following:

  • Shale gas will provide a low-cost source of natural gas, and thus cheap energy, for decades to come. This, in turn, will boost the competitiveness of the U.S. economy.
  • The U.S. will move toward an era of energy self-sufficiency, which will help buttress the country’s geopolitical security.
  • The scale of shale gas production will be sufficient to allow the U.S. to commence natural gas exports, thus transforming energy markets outside of the U.S. such as those in Europe.
  • Increased natural gas production in the U.S. will mitigate carbon emissions through displacing coal and so reduce the risk of dangerous climate change.

For these claims to be substantiated, significant year-on-year rises in U.S. natural  gas production will be required over an extended period. Through tracking monthly production of natural gas, a non-specialist can confirm or refute whether large rises in natural gas production are being achieved and, therefore, whether the claims associated with a shale-gas revolution are credible. In short, the monthly numbers allow you to evaluate the hype.

→ Leave a comment

Posted in Peak Oil, Resource Constraints

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All Liquids Are Not Created Equal (Revisited)

Posted on March 5, 2013 | Leave a comment

A few weeks ago, I wrote a blog post pointing out some of the difficulties posed by the move away from ‘crude oil’ to ‘all liquids’ reporting by BP, the Energy Information Administration (EIA) and the International Energy Agency (IEA) when they publish their flagship yearly reports (see here, here and here).

I also showed some numbers taken from Table 3.4 in the IEA’s World Energy Outlook 2012 (click for larger image). The declining share of crude oil within the overall ‘all liquids’ mix is obvious.

Oil and Liquids Supply jpg

It’s worth drawing attention to some charts taken from a post by Marco Pagani on Ugo Bardi’s excellent blog Cassandra’s Legacy. Note Pagani’s post is, in turn, a summation of original work done (in Italian) by Antonio Turiel. We start with the IEA’s headline chart that shows ‘all liquids’ on a healthy (in energy terms rather than climate) rising trend:

IEA Predictions jpeg

Turiel then makes two adjustments to the chart. Continue reading →

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Data Watch: US Natural Gas Monthly Production December 2012

Posted on March 3, 2013 | Leave a comment

The U.S. government agency The Energy Information Administration (EIA) issues data on U.S. natural gas production, including shale gas, on a monthly basis with a lag of roughly two months. The latest data release was made on February 28 and covers the period up until December 2012.

Data is reported in billion cubic feet (bcf). Key points:

  • December 2012 natural gas dry production: 2,041 bcf, +0.3% year-on-year
  • Average monthly production for the 12 months to December 2012: 2,004 bcf, +5.0% over the same period the previous year

Since the end of 2011, the rate of production increase has levelled off (click chart above for larger image).

US Dry Gas Production Dec 12 jpg

Continue reading →

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