By 2020 it may be clear to everyone that oil decline has begun

Preface. There are two parts to Dittmar’s study. The first one concerns production, based on the most recent years of oil production.  Dittmar found a strong pattern of oil decline after the plateau of 3% a year for five years, followed by a decline of 6% a year thereafter.

The assumption that OPEC nations (i.e. Saudi Arabia, Iraq, Iran, Kuwait, UAE, and Qatar) can continue producing oil at the current rate is based on potentially exaggerated reserve figures, which went up substantially in 1985 and haven’t budged a barrel down since then.  But for OPEC, and all other regions and nations, Dittmar predicts the maximum possible production based on his model, and says that perhaps the Middle Eastern OPEC nations can continue to produce as much oil as they are now until 2050.

In my opinion, he overestimates the amount of North American tight shale oil and tar sands oil that can be produced given their low EROI’s and high energy/monetary cost, but since all his figures are the best possible, he assigns 4.5 million barrels per day (mbd) production for USA tight oil through 2030 and 3 mbd for Canadian tight oil plus oil sands.

Of course, no matter how accurate the model is, Dittmar points out that it won’t matter if a civil war, terrorism or natural disasters in any oil-producing or refining region occur, which would quickly reduce exports. Plus competition for the remaining oil might increase conflicts the current world’s major powers with catastrophic consequences. The model only applies to a stable world for the next 30 years.

Here are the nations already declining at 6%: the EU and Norway, Azerbaijan (2017), Asian nations Indonesia, Malaysia, Australia, Thailand, Vietnam (2016), Algeria (2015), and Mexico (2014). All other oil-producing nations will join the 6% club by 2031 except OPEC.  Many are already in their 3% decline state, which starts 5 years earlier. Western Russia & Siberia (2020), Eastern Siberia (2030), Kazakhstan (2029), China (2020), India (2025) Egypt (2026), Nigeria (2025), Angola (2019), Sub-Saharan Africa (2026), Venezuela (2025), Brazil, Ecuador & all other South & Central American nations (2021), United States conventional (2021), Canadian conventional (2018).

Part 2 deals with consumption. It appears to me that Asia is the big winner, especially China and India.  All of the Eastern Siberian Russian oil will go to Asia through existing or planned pipelines. Over 80% of Middle Eastern OPEC oil goes to Asia now—and this is likely to continue since Asia is four times closer than Europe or North America.  Plus Asia makes the goods that the Middle East wants.  Yes, the U.S. could trade for food, but Middle Eastern countries have already bought vast tracts of land in Africa, South America, farms in the U.S., and elsewhere.

Dittmar alludes to a potential financial crash because our economic system depends on continual growth. This too would reduce production and exports from the last nations still producing oil in the Middle East.  Nor does he mention their populations are still growing exponentially and consuming their own oil exponentially as well, leaving less to export.

Alice Friedemann   www.energyskeptic.com  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Derrick Jensen, Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

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Dittmar, M. 2017. A Regional Oil Extraction and Consumption Model. Part II: Predicting the declines in regional oil consumption. Physics and Society.

By 2020 it may be clear to almost everyone that the current oil-based way of life in the developed and developing countries has begun a terminal decline.

Aside from the OPEC Middle East region, where a rather stable production is modelled for the next 15 to 20 years, production in essentially all other regions is predicted to be declining by 3 to 5% per year after 2020, and some are already declining at this rate.

Based on the evolution of intercontinental oil exports during the past decade, it is predicted that in the near future Western Europe will not be able to replace steeply declining exports from the FSU countries, and especially from Russia. Hence total consumption in Western Europe is predicted to be about 20% lower in 2020 than it was in 2015. For similar reasons, although the export sources are different, total consumption in the U.S. is predicted to be about 10% lower.

Further, it is predicted that neither India nor China will be able to continue their rapid oil consumption growth. At best both countries might be able to stabilize per capita oil consumption close to their current relatively low levels through 2025 by outcompeting other countries in Asia. To put it mildly, the obtained modeled results for future regional oil consumption in almost every part of the planet disagree strongly with essentially all economic-growth-based scenarios like the one from the IEA in their latest WEO 2016 report. Such scenarios assume ongoing growth and would have us believe that the oil required to support such growth will be discovered and produced. It won’t.

The consequences of the declines in oil production will be felt in all regions but OPEC Middle East countries.

Our model predictions indicate that several of the larger oil consuming and importing countries and regions will be confronted with the economic consequences of the onset of the world’s final oil supply crisis as early as 2020. In particular, during the next few years a reduction of the average per capita oil consumption of about 5%/year is predicted for most OECD countries in Western Europe, and slightly smaller reductions, about 2-3%/year, is predicted for all other oil importing countries and regions. The consequences of the predicted oil supply crisis are thoroughly at odds with business-as-usual, never-ending-global-growth predictions of oil production and consumption.

Other factors affecting global oil production:

  1. The quality of the remaining crude and energy/cost to refine it
  2. Since crude oil can’t be used directly, but must be refined, nations with refineries import more oil than they return to exporting nations without refineries. Though if these poor oil producing nations build refineries they’d be able to lower their exports and increase their standard of living.

Whenever terminal decline in all nations begins, one can only hope that people around the globe will be able to learn, quickly, how to live with less and less oil every year, and how to avoid war and other forms of violence, as we travel the path to a future with less and less oil.

 

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3 Responses to By 2020 it may be clear to everyone that oil decline has begun

  1. JT Roberts says:

    Interesting perspective hard to tell exactly where we are on the curve. This piece helps us understand why but also how quickly things unwind.

    http://www.oilcrisis.com/reynolds/MineralEconomy.htm

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