In 1978, I flew to Europe to visit a college friend who worked in London. An oil-trader friend of his from Paris flew in for a weekend restaurant tour with us. When I asked the man what he did for a living, he replied confidently “I f*** the world”. I was shocked then, and even more-so today.
If data by the United States Energy Information Agency (EIA) is reliable, there is no actual shortage of either oil or production capacity in relation to consumption.
Between 1980 and 2004, world consumption increased by 30.8%[8], while U.S. consumption increased only 21.5%[9]. World production increased 23.2%[10], but U.S. production actually decreased by 40.3%[11].
In terms of world static supply and demand, in 2004 73,387 thousand barrels/day (TBD) of oil were produced,[12] against demand of 82,594 TBD consumed. [13] This would leave a 12% structural deficit. However, looking at 1980 world data, we also see a 5.7% deficit: 59,557 TBD were produced [14] against consumption of 63,113 TBD. [15]
The EIA data suggests a long-term physical impossibility: world consumption has been actually outstripping world production for many years. I conclude there is data missing from EIA reports. This could consist of under-reporting of production, over-reporting of consumption, or perhaps both.
World distillation capacity rose 81% from 47,049 TBD in 1970, to 85,304 TBD in 2007. However, distillation capacity increased only 6.7% between 1980 and 2007. [16] It is interesting to note that the EIA reports 2007 distillation capacity of 85,304 TBD, which factoring-in demand growth, is roughly in-line with 2004 consumption of 82,594 TBD (post-2004 consumption data is not available yet.
In the United States, distillation capacity actually decreased from 17,988 TBD in 1980 to 17,397 TBD in 2007. The lowest point in U.S. distillation capacity occurred in 1994, when capacity was only 15,034 TBD. [17]
Proven reserve data suggests a very positive future outlook. Proven U.S. reserves rose 734% from 29.81 billion barrels in 1980 to 213.32 billion barrels in 2004. [18] Proven world reserves grew 204% from 644.93 billion barrels in 1980 to 1,317.44 billion barrels in 2007. [19]
Next Page 1 | 2 | 3 | 4 | 5 | 6 | 7
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).