The ONLY way to get out of this trap is to figure out how to use less fuels—efficiency, sustainable substitutions, etc. Otherwise, there is a ceiling to economic activity. Combine a fixed-size global economy with a growing population and there are a LOT of people shut out of any chance for a meaningful life. The ONLY way for the economy to grow continuously is for there to a major advances in securing energy that does not come from the ground. Very difficult and utterly necessary.
And some charts reflecting domestic oil production. This is a reminder for those credulous folks who think that secondary recovery techniques like fracking are going to lead to energy independence. Some in their enthusiasm even believe that USA will become a net energy exporter again. Well good luck with that.
Lack Of Oil Supply Growth Preempts Any Chance Of RecoveryGail Tverberg, Our Finite World | Jul. 19, 2012
Gail Tverberg is a trained actuary who writes about the impact of the limited supply of oil.
A few days ago, I showed the close relationship between growth in world oil consumption and growth in world GDP. In this post, I will extend that analysis by building a model that shows how much of an increase in world oil supply is need for a given increase in world GDP. This model indicates that if we want the world economy to grow by 4% per year, world oil supply will need to grow by 3% per year. This is more than world oil supply has grown per year since the 1970s–giving a clue as to why the world is having so much problem with economic growth now.
Theoretically, the model should also be able to predict what would happen on the downside as well–what would happen if world oil supply should suddenly start to contract. We will talk about what these indications are, but also discuss why they are probably misleading. The result may very well be quite a bit worse than the model predicts.
In my earlier post, we saw that over time, both the rate of growth in oil supply was declining, and the rate of growth in GDP was declining. In both the previous and the current post, we are looking at “real” GDP growth–that is GDP growth, with the inflation component removed.
In my earlier post, we looked at several groups of years, based on time periods when world oil supply was increasing. Let’s look at oil supply growth for the same ranges, on a year on year percentage growth basis. Note that the time periods are one year shorter (1969 -1973 becomes 1970 – 1973), because we are looking at year on year percentage increases.
In Figure 2, notice that average oil supply growth is gradually becoming lower and lower, looking at the time periods down the side of the graph. This is similar to what we saw in Figure 1. computed on a slightly different basis. more
This May Kill Your Excitement Over The US Oil ReboundGregor MacDonald, Gregor.us | Jul. 16, 2012
Excitement continues to run at very high levels, over the rebound in US crude oil production. Coming out of the new, historic low of 4.95 mbpd (million barrel per day) in 2008, the annual average of US production in the first 4 months of 2012 is currently on pace at 6.156 mbpd.
This new production has largely been made possible by the price revolution in crude oil, which finally broke through the long-term, $25 ceiling during 2003-2004, and which is now mostly sustaining marginal production around the $90 level.
A question: has the US, since its own production peaked near 10 mbpd in 1971, seen this kind of production rebound before? Let’s first take a look at the past decade.
See: US Average Annual Oil Production mbpd 2001 -2012.
If maintained, the current rebound would add back a little more than a million barrels a day to US production, compared to the 2008 low.
Some analysts fervently believe that, despite ongoing declines from existing US fields, that production will go even higher into the end of this decade.
Well, just leaving that issue aside for now, given that so much of this new production depends on sustained high prices, let’s briefly take a look at a previous rebound in US oil production.
See: US Average Annual Oil Production mbpd 1972 -1985.
Coming out of the 1976 low, at 8.136 mbpd, US production rebounded over the following 9 years by 800 kbpd–not quite a million barrels per day. However, a volume comparable to the current rebound. Afterwards, the 40 year decline in US production resumed its decline. more