Rick...

Forgot to mention: another thing that bothers me about the data on the Oil Drum link you is that the historical export data for Venezuela is simply wrong. Venezuelan exports peaked in 96, had a sub-peak in 2000, and declined steeply from 2000-2003. The Oil Drum chart shows a sharp rise in Venezuelan exports from 2000-2003. If their "country-by-country analysis" misses out on historical data that is a matter of record... how are we supposed to trust their projections?

Quote Originally Posted by aangel View Post
Given the above, it seems like a near term peak is almost certain since the assumptions of the other models are unlikely, in my view, to come to pass. For instance, $170B worth of oil projects have been cancelled in the last nine months due to the credit crunch and reduced near-term oil use projections. (See the various megaproject databases for more on that.) That's why the near peakists are asserting that we will never surpass the production of last summer. The projects to do so are no longer on the books and depletion marches on.
Some oil projects were put on hold when prices and demand projections dropped. Liquidity was not an issue: Saudi Arabia, Kuwait, Abu Dhabi etc do not face meaningful liquidity constraints. They are simply limiting new investment to the level they see as necessary. They have no incentive to produce more than the market will consume.

In the medium to long term both production and consumption are responsive to pricing. Growth and energy consumption are not necessarily proportional: look at a chart for OECD economic growth from 2002-2008 and a chart for oil consumption over the same period.

The other big question is a simple one: how much expensive oil is really out there? The only honest answer is that we don't know: for most of the last 30 years there has been little to no incentive to even look for oil in places where production costs would exceed $30-40/barrel, let alone develop these resources. We won't see significant moves in this direction until prices are sustained at a level at or above the $60-70 range. A spike will not inspire the necessary investment, it needs a clear, sustained price plateau.

High prices will flatten demand growth - it may not happen overnight, but it will happen. Look for the Chinese to build a lot of nuclear plants and burn a lot of coal over the next few decades: Greenpeace will be pissed, but the Chinese don't care. NIMBY is not a problem there.

High prices will call up more production. It won't happen overnight, but it will happen. How much more? Again, we don't know.

Political and security developments will have a major impact. 10 years from now Iraq could be producing 6mbpd... or nothing. Similarly variable possibilities exist for many other producers, and are almost impossible to project or quantify.