Simplified Peak Oil Picture is a Myth



Yes we are running out of oil but peak oil is not the correct wave form to describe this.

The reason that "Peak Oil" is really "Plateau Oil" is because distribution of crude oil is strongly limited by world oil refineing capacity. Issues of supply and demand have been irrelevant since 2005. Worldwide infrastructure supports the processing of 85--90 barrels a day and has so for the past 10 years.

Over the last 2-3 years the world has been able to squeeze out about 2-3 MBD more of out the Earth by building a few more refiniries, converting natural gas to liquids (a very intensive GHG emission process, and find "other" sources). All of this effort for essentially a 5% increase in the global oil supply.

The waveform of the data from Jan 2002 through Sept 2013 has important features. The overall flattening of the data relative to the expected linear trend (orange dots) has given rise to the term "Plateau Oil" that effectively should replace "Peak Oil". In an ironic way, this plateau extends our fossil fuel dependence lifetime thus given us more time to implement solutions so Plateau Oil is much better than Peak Oil in this regard.



Important features in this wave form are color coded:

  • The blue portion represents scalable distribution where supply = demand. This lasts until 2005.

  • The Red data (mostly covered up by the green flat line) covers the period of 2005-2010 where oil production was completley flat (at 84-85 MBD).

  • The final purple small rise is due to a limited number of new refining facilities that have come on line the last 3 years. This has allowed world production to increase, but only by 5%. This is the difference between qualitative and quantitative.

    Qualitative News Headlines:
      World oil Production Dramatically Increases Over the Last 3 Years

    Quantitative News Headline:
      World Oil Production gains only 5% last three years and remains well below Demand


    This overall flattening has lead to a gap between supply and demand that can in no way be made up fast enough without the sudden appearance of new refining capacity. This new refining capacity has now been added and has come ON line over the past few months. The net results is that there is an additional 4-5 MBD now on the market since January 2010. Whooppee all that effort and expense for a measly 5% increase in production. We truly are clueless.



    BUT THE GAP IS COMING: (even if the forecasts have been slightly wrong - the uncertainly is how many more years will we be in plateau before we start to see a decline).



    This gap could be seen coming a long time ago:



    That 8 MBD shortfall is in 2007. If that 4% rise in demand continued to now, then Demand would be now be 117 MBD agains a supply of 90 MBD or a shortful of 27/90 = 30%. Scalability with crude oil is no long physically possible.