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U.S. Oil Production Will Exceed Its 1971 Peak This Year

So much for peak oil doom!

OilWellsSignalHillCApostcardU.S. oil production will surge above its 1970 "peak" of 9.6 million barrels per day this year, according to the latest projections from the Energy Information Administration (EIA). The agency estimates that American oil production will average 10.6 million barrels per day this year and will rise to a daily average of 11.2 million barrels in 2019.

Only a decade ago, the world was in the grip of one of its periodic "peak oil" panics. Dire predictions everywhere announced that humanity was on the cusp of a disastrous and accelerating decline in oil production. One prominent analyst declared in 2009 that global oil production had peaked at 82 million barrels per day in 2008 and would thereafter begin declining at a rate of 2.2 million barrels per day. Reaching peak oil would result in a "meltdown of society" and a "dying civilization" with a "landscape littered with the rusting hulks of SUVs."

What happened?

Russia and the Organization of Petroleum Exporting Countries have been trying to boost prices by cutting back on production. Political chaos has engulfed several big oil producers—Iraq, Iran, Libya, South Sudan, Venezuela. The International Energy Agency (IEA) notes with understated charm that "declines are accelerating in Venezuela, which posted the world's biggest unplanned output fall in 2017." Yet the IEA expects global production to average about 98 million barrels per day this year.

Even in 2018, you can find die-hard peak oilers projecting doom. Just this week, J. David Hughes of the Post Carbon Institute questioned the EIA's projections. "There is no doubt that the U.S. can produce substantial amounts of shale gas and tight oil over the short- and medium-term," Hughes declared. "Unrealistic long-term forecasts, however, are a disservice to planning a viable long-term energy strategy. The very high to extremely optimistic EIA projections impart an unjustified level of comfort for long-term energy sustainability."

Keep in mind that Hughes flirted with peak oil predictions back in 2010, forecasting that global crude production would peak in 2012. He based this conclusion on a consensus estimate (excluding the "optimistic" views of EIA and Cambridge Energy Research Associates) of more than 20 predictions.

After my 2016 column "Where Have All the Peak Oilers Gone?" appeared, I received an anonymous email chastising me for daring to report on this subject. My interloctor wrote:

How can you say that peak oil is dead, when oil's sell price is one third of the price needed to sustain current production level? That's silly. Many oil companies are going broke, oil exporting countries will be broke soon. You just don't understand the subject. But when you don't understand it, you shouldn't write articles about it. Peak oil happened in 2015, instead of 2005-2007 probably only because of coal boom in China. But that coal boom has now ended. Before making a fool of yourself again, please get to know the subject first.

I replied: Well, I guess you told me! As the mirage of peak oil continues to recede, I await future emails from you confidently asserting that peak oil occurred in 2020, in 2025, in 2030, etc.

I just can't seem to help making a fool of myself on this subject.

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  • Libertymike||

    Hubbert will haunt Bailey in perpetuity.

  • BestUsedCarSales||

    Before making a fool of yourself again, please get to know the subject first.

    How does one know one doesn't know! It's the great paradox of our lives.

  • $park¥ leftist poser||

    If Donald Rumsfeld can do it, anybody can.

  • LarryA||

    How does one know one doesn't know!

    The idea that "oil's sell price is one third of the price needed to sustain current production level" signals scarcity is a pretty good clue.

  • Brandybuck||

    That's Bellflower? Looks more like Bakersfield.

  • Pro Libertate||

    Ron, who has the space beat? Yesterday's launch deserves a full article for its excellence.

  • Ron Bailey||

    PL: Katherine loves space so I thought she might be planning to do it. But she's really busy nowadays. So I did a bit of belated reporting this afternoon. Thanks for prodding us.

  • esteve7||

    Marxists, environmental or cultural or economic or whatever, can not imagine things changing. They think the world is how it is and will stay that way forever. That's why they can never fathom expanding the pie, only divvying it up

  • Sal Paradise||

    If I could upvote this, I would. Lefty economics in a nutshell.

  • Last of the Shitlords||

    They truly are obsessed with the idea that everything is a zero sum game. Other than the goodness of authoritarian government.

  • Tony||

    I don't get this fixation on peak oil predictions. Are you saying that oil is infinite in supply? And would that be a good thing considering how bad it is for the environment, and how bad humans are at protecting the environment?

    Anyway, oil and oil-related industries are hurting everywhere because oil is too cheap. Meaning too much production. But go Merica I guess.

  • ||

    Are you saying that oil is infinite in supply?

    Scans article for terms 'infinite' and 'supply'. 0 results.

    And would that be a good thing considering how bad it is for the environment, and how bad humans are at protecting the environment?

    Scans article for 'protecting' and 'environment'. 0 results.

    If not infinite, what is the total supply of oil Tony? If the supply is a finite and knowable number and we get it consistently wrong for the long side of half a century, could/would/does that carry any implications with regard to other speculative analytics?

  • Tony||

    It's just such a juvenile argument. Obviously there is some point at which it becomes prohibitively expensive to extract oil. I genuinely don't understand the counterpoint. That we will always and forever invent new technologies to continue cheaply extracting? Or what? So cherry-picked predictors of peak oil were wrong on the date. So... what? This is not something that lends itself to easy prediction.

    If we weren't partisans for particular natural resources (and how absurd is that), we'd be talking about the only oil-related story that matters: how to do civilization without it, even if there is an infinite supply.

  • BYODB||

    Of course, you miss the point in that predictions of how much oil are actually contained within the planet are off by truly astounding orders of magnitude. The implication M.C. puts forward being that perhaps other speculative mathematics regarding certain other meteorological phenomena may also be off.

    Of course, oil is definitely finite on this planet. It's also an obvious truism that should oil run out, some other source of power will by necessity replace it.

    Electric cars aren't necessarily 'evil' and people around here aren't even against them, but rather it's amusing that people like you continually fail to understand that poisonous shit comes out of the ground to make them run in either scenario.

  • Tony||

    It's also an obvious truism that should oil run out, some other source of power will by necessity replace it.

    Hardly a truism! Especially as we are doing as little as possible to figure out how to do civilization without oil. Civilizations have disappeared before. We are not special. We're just especially stupid with respect to ignoring how we're affecting our habitat. Easter Islanders didn't have Exxon lying about how everything's OK for decades, and they still bit it.

    In fact here you are shilling for oil right this moment. As I said, magical thinking from libertarians is not convincing to me.

  • ||

    Blah blah blah. Blah. And furthermore, blah.

  • Last of the Shitlords||

    Tony, everything on the universe is finite. No one really thinks otherwise. Beyond that, do you have some discernible point?

  • BYODB||


    Hardly a truism!

    Considering that the alternate sources of power we would need clearly already exist and are indeed well understood, it is a truism that as carbon-based energy becomes more expensive those other sources of energy will become more common until the replacement is at an optimal balance.

    The truth is we'll never run out of oil because at some point we'll stop caring about it as getting it and refining it will be more expensive than the alternative. It's a gradual and natural process that will likely take a hundred years or more, not something you're going to achieve through activism tomorrow.

  • Alcibiades||

    Seriously, why does anyone ever respond to this fool.

  • BYODB||

    Sometimes, if you respond, he doubles down. It's basically free entertainment.

  • Fuck you, Shikha (Nunya)||

    And it is evidence to esteve7's observation above about zero sum games.

  • ||

    Of course, you miss the point in that predictions of how much oil are actually contained within the planet are off by truly astounding orders of magnitude.

    And, not to get too kooky, but our explanations of how it got there are a bit hand-wavy as well. I mean, presumably, it all or mostly came from the atmosphere and large portions of it are relatively permanently mineralized but, apparently, those estimates could be off by huge margins.

  • Paloma||

    When it becomes too expensive then people will find a substitute or another source of energy. Until then, it seems to be plentiful and cheap which is a good thing.

  • Tony||

    Except for the fact that burning it is changing the chemistry of the atmosphere and oceans so radically that no catastrophe of this scale and speed has ever happened without a large meteor.

  • ||

    ...catastrophe...

    Citation needed.

  • ||

    When it becomes too expensive then people will find a substitute or another source of energy.

    This ignores its phenomenal abilities as a storage medium and if we synonymize plastics with oils the potential benefits of 'using' 'oil' reach far beyond anything generally envisioned by 'green energy'.

  • ||

    There was an old meme about how, if we'd invented Powerpoint first and then the overhead projector, the overhead projector despite it's obvious inferiority would be lauded for it's obvious advantages. Currently, oil and batteries are much the same way.

    Imagine an electric car that could both heat your car and go 300+ mi. on one, 10 min. recharging with a 'recharging fluid'. You can charge it at night and in pretty much any weather. Should you run out of charge, the average adult male can transport a full 300+ mi. charge on his back and a child can transport a 30 mi. charge with one hand. It's quite possible, with modest consumer savvy, to acquire other equipment and appliances that are fully compatible with the charging fluid. Spills are not a big problem, you can clean them up with materials available to just about everyone. You shouldn't get it in your eyes and drinking it will cause vomiting but it's generally not toxic. It will burn and can, in some instances, explode but the conditions for such a situation are relatively deliberate or exotic.

    IMO, there's a bit of a question as to whether it wouldn't make sense to use alternative energy sources to produce 'oil' simply as a transport and storage medium. Even in a 'post-oil' economy, we'll still need oil to produce plastics and it will be hard to argue against it for temporary, localized heating needs such as concrete batch factories and such.

  • Ariki||

    Oh noes! Wont someone think of the children being crushed by starving polar bears as they fall out of the CO2 saturated Venus like atmosphere where mighty Mann made dragons live?

    Or something.

    News flash.
    The. Models. Are. Wrong.
    The. Predictions. Have. Failed.
    The. Science. Isn't. Settled.

  • Tony||

    Slogans aren't science, but I appreciate that you don't understand that.

  • Rebel Scum||

    He gave conclusions to available evidence, not slogans.

  • Tony||

    And you guys reached these conclusions from Anthony Watt's blog, right? Or Breitbart? Or which esteemed science reporting outfit?

  • Rebel Scum||

    Tell me an environmental model displayed by Al Gore in An Inconvenient Truth that panned out in reality as predicted.

  • Tony||

    Oh so your source on the science is a Democratic politician?

    Here's a good rundown.

  • Rebel Scum||

    No. Which prediction came true? Is the North Pole ice free? Have all the polar bears drowned? Has there been a discernible increase in number and intensity of tropical cyclones? Does it no longer snow in the mid-Atlantic?

  • Tony||

    Did Al Gore make any of those claims specifically and put a date on them? And why are we talking about Al Gore?

  • BYODB||

    Gore's little 'film' quoted the scientists of the AGW cult, so it seems pertinent to bring up how wrong those scientists were.

  • Scarecrow Repair & Chippering||

    I believe he did say something about the ice cap disappearing by now, or polar bears going extinct by now. He made so many silly predictions that I saw no point in remembering any. The few articles I have sen pointing out his failed predictions did have specific dates and examples of blown forecasts, but again, he made so many, there's no point in remembering the details.

  • Last of the Shitlords||

    Tony, there is not a word or a concept you are capable of illuminating for any of us. Don't ever think otherwise.

  • ||

    Oil is not infinite in supply. But the finite supply of oil is mediated by price as driven by demand and by extraction cost as driven by technology.

    People who predict peak oil fail to understand -- on multiple levels -- any of that. People who do understand the economics behind this refute their idiotic claims -- on multiple levels -- again and again. Yet predictions of peak oil still persist and the people who predicted it so vociferously are not laughed out of public conversation.

  • Tony||

    Peak oil is an economic argument. It's also a simple warning about what happens should production go into decline (because of the economics, not the actual physical supply) while the world still depends on it for countless aspects of civilization. Shouldn't we behave as if it were going to happen, just in case? I certainly wouldn't bank on libertarian magical thinking.

  • ||

    ...should production go into decline (because of the economics, not the actual physical supply) while the world still depends on it for countless aspects of civilization.

    Don't you see the contradiction between production going into decline because of the economics and the world depending on it for countless aspects of civilization?

    If it is depended on, then the price will rise. With higher prices, more expensive technologies can be brought to bear to extract more expensive oil. With higher prices, marginal uses that the world does not depend on for civilization find alternatives to oil. It all works out. How can it not?

    So why should "we" behave as though we are worried about things that will be resolved by millions of people cooperatively responding to natural market forces?

  • Tony||

    If the market were sufficient to deal with the problems of oil then it would have rapidly switched to non-fossil fuels many decades ago.

    We would be lucky if the only problem were too little supply. The actual problem is that there seems to be plenty of oil to burn well beyond the point where it causes drastic long-term environmental effects.

  • ||

    If the market were sufficient to deal with the problems of oil then it would have rapidly switched to non-fossil fuels many decades ago.

    No, it wouldn't have. Fossil fuels are cheaper over the past several decades and they are cheaper now. Therefore the consumers of energy, especially portable energy, will choose fossil fuels to best supply the energy they need. That's the market. That's economics.

    We would be lucky if the only problem were too little supply. The actual problem is that there seems to be plenty of oil to burn well beyond the point where it causes drastic long-term environmental effects.

    This is the pattern we have come to expect. People who worry that there might be too little oil and people who worry that there might be too much oil are the same people!

  • Fuck you, Shikha (Nunya)||

    He covers both sides of the argument with double speak. I don't know if he's trolling is or himself.

  • ||

    So why should "we" behave as though we are worried about things that will be resolved by millions of people cooperatively responding to natural market forces?

    ...especially when "we" -- by which I think Tony means "government" -- can react only in ways that will reduce the diversity of solutions those natural market forces can select from.

  • Fuck you, Shikha (Nunya)||

    I assume hell tell SpaceX that private companies cannot successfully launch into deep helioliptical orbits next.

  • Last of the Shitlords||

    "Shouldn't we behave as if it were going to happen, just in case?"

    Instead of telling you to fuck off, I will instead ask you to elaborate. Please be specific.

  • Ron Bailey||

    T: Since peak oil is indeed an "economic" argument, why is it the case that most of the peak oilers are geologists?

  • Tony||

    I'm not one to speak for the rock people.

  • Rebel Scum||

    oil is too cheap

    Tony doesn't want you to inexpensive energy.

  • Tony||

    I suppose it's something for Reason to celebrate a set of conditions that is doing continuous damage to the oil industry in favor of consumers at the end of the chain. I would hope that it's not simply taking the Republican line that "moar Merican oil good!"

  • Scarecrow Repair & Chippering||

    Oil is almost as fungible as money. Why do you care where it comes from?

  • Paloma||

    But Tony, at the same time, seems to think that there should BE no oil industry.

  • Brandybuck||

    Best analogy I've heard is that it's like a mosquito drinking blood from a balloon or a swimming pool, but the mosquito has no idea if it's a balloon or a swimming pool, and that it seems infinite. It's NOT infinite. But neither is it something we're going to run out of in 1999 (or whatever the latest prediction is).

    I did some work for a California oil field a few years back. The field was officially declared dry back in the 1890s. It's now the biggest oil field in California. New oil did not magically appear, it's the result of new technologies and techniques. This is why the industry talks about reserves its' not talking about the absolute limit of oil in the planet, they're talking about usable known reserves using current technology.

    And even if our oil supply is more like the balloon instead of the swimming pool, we will NOT suddenly run out of oil on a single day, like some bad Hollywood movie. Prices will adjust, oil will get more expensive, and people will naturally go seeking other sources of energy. There is no need to tax the poor to subsidize some alternative energy soruces, when the price of oil rises people will naturally invest in those sources without needing any cops to be busting kneecaps to force compliance with Glorious Leader's wishes.

  • CqU||

    Why yes, there is an effectively infinite supply of oil.

    https://goo.gl/jgj66e (Forbes)

    https://goo.gl/oDLhaP (The Atlantic)

    As for preventing climate change, that's easy: trees! and azolla!

    https://goo.gl/6uxuNt (Wikipedia)

  • Rebel Scum||

    Like peak derp, you will never reach peak oil. //jk

  • ||

    I miss the heady days of Peak Oil panic.

    Rarely do you get an opportunity to argue against outright fallacies that are held so emotionally by people.

  • Quo Usque Tandem||

    You can move onto any number of things, like human trafficking. There's plenty of opportunity to pillory hysteria on that front.

  • Scarecrow Repair & Chippering||

    "Unrealistic long-term forecasts, however, are a disservice to planning a viable long-term energy strategy."

    Because long-term forecasts and strategic planning are both nonsense masquerading as fake news.

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