Global Deficit Between Oil Consumption and Production Remains the Norm

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WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Erik @ Cervus AS  |  June 21, 2011
The downloadable workbook shared by BP in conjunction with the presentation of "BP Statistical Review of World Energy June 2011" (http://www.bp.com/sectionbodycopy.do?categoryId=7500&contentId=7068481") reconciles the variance between production and consumption as follows: "Differences between these world consumption figures and world production statistics are accounted for by stock changes, consumption of non-petroleum additives and substitute fuels, and unavoidable disparities in the definition, measurement or conversion of oil supply and demand data." As demand and production increases, so does therfore also the consumption figures. Are we looking at increasing biofuel additives as well as an increasing percentage of additives to the gasoline? Still confounded by the big volume, though.
Tim Milliron  |  June 20, 2011
I am a retired drilling fluid engineer and my opinion is with new technology if govt control does not hinder majors/independents, old fields will produce huge amounts of new oil in the USA along with CNG as a transportation fuel the USA will not have to give OPEC billions of dollars as we do today.......AND we would not even need OPEC....thats what I am talking about.
Christine Jarvie  |  June 20, 2011
Excellent reading on the subject of oil deficit: Greer, John Michael, The Wealth of Nature, New Society Publishers, 2011
Murray  |  June 18, 2011
Be careful of statistics, especially when the source of the numbers, though honestly compiled, requires assumptions. Refining oil generally produces a volume increase, especially when distilation products are cracked, but also consumption of oil and gas. A direct balance between crude in and product volume out is not possible and variations in the difference are likely to be a result of changes in process or data collection as much as in changes in stored volumes. I suspect that the measure of consumption, equated with demend, is actualy refined product volume and this can only change if supply is available (except for storage, which is, apart from government strategic stores driven by an economic imperative, you only increase storage in anticipation of a higher price) Opec have no capacity to create shortage and have not had the discipline to do so for thirty years, Saudi has had (but not for long) the capacity to flood the market for heavy crude for which tere are few buyers. Your comment on the futures market as a predictor of supply / demand pressure is logical but futures traders are themselves a herd with few leaders and no great insight. Let the market decide, and the market will drive us to valuing ennergy more highly and using it with greater wisdom than previously.
Trey Cowan  |  June 17, 2011
Hi all- I really appreciate all the thoughtful commentary surrounding the data presented. I guess in a nutshell I view BP's Statistal Review as Mathematical Poetry that lends itself to interpretation. However, I do like the way Don does not mince words. John, I think there is plenty of oil available now for the right price. And to quote a prof from B-School - "If I knew the answers to many of your questions - I would be sitting on a yacht somewhere right now" Seriously, there is a finite amount of recoverable oil in the world. If you assume that the number is 1.55 Trillion barrels, then we are depeleting the total at approximately 2% per year. Futhermore, I doubt that new discoveries will be sufficient to offset depletion without another find on the magnitude of the Canadian Oil Sands soon. Just my two cents and thanks for reading. Trey
j.s.foster  |  June 17, 2011
I believe that "Peak Oil" is a realistic scenario. And I think these graphics are beginning to demonstrate exactly this situation. The implications of this are so significant that we cannot fail to examine them more closely and to act. I do not agree that invasion and oppression of all the oil states in the Middle East is the proper way to act in the face of Peak Oil, but this seems the current approach.
Mark  |  June 17, 2011
How do we consume more than we produce? If it is not produced you cant consume it.
Kelly Caruso  |  June 15, 2011
My concerns are that we create jobs to help rebuild our economy and lessen our dependence on foreign oil. We have reserves waiting to be drilled in the Gulf of Mexico (GOM) if this administration could/would see the "Big Picture", so to speak. Many industries along the Gulf Coast rely on business from the GOM to drive their business. It is obvious that the oil spill hit us very hard, its time to start drilling, produce our own oil and reserves again. Lets let OPEC do their thing and we will do ours.
Skintnick  |  June 14, 2011
Worth noting that the price spikes in the 1970s were brought about (so far as I remember) for geo-political reasons in the Middle East and that the 2004 spike - abruptly halted by the 2007/8 crash - is perhaps the first to be caused by fundamental production limits.
david glover  |  June 13, 2011
great depression 2 on the way
Rod Campbell-Ross  |  June 13, 2011
The issue is vastly more complex than simply the balance between supply and demand, though intriguingly this article does hint at some very hard questions. Of course consumption of oil cannot exceed production unless stocks are being drawn down. And I am not aware that has been happening. Oil does far more than keep the wheels of happy motoring turning; and the critical issue is the nexus between energy and the economy. This is poorly understood and most economists consider oil just as a commodity that the price mechanism will manage and compensate for by substitution if necessary. It doesnt take much intellect to realise this is fundamentally wrong. Oil (energy) is a vital economic input, as important as labour. If oil supply stops growing (as it has, since 2004), then our economies stop growing (as they have). In fact economic growth only lags oil production growth to the extent credit can expand. The US is maxxed out. Congress even had to legislate to allow more borrowing. I personally do not think the US govt. will ever repay the 15 trillion they owe. Not honestly anyway. Their only escape is inflation and that doesnt fix their oil deficit. Most of the western world is very oil intensive. US use is 23 barrels per capita per year. Chinese use is 2 barrels per capita per year and as such they will be far more resilient to oil shortage than the US. We are living in interesting times.
tx.chem.eng  |  June 13, 2011
An amazing chart. It raises a question in my mind. With that many consistent years of consumption exceeding production - how many million barrels are in inventory at any time?
John in Fl  |  June 13, 2011
Trey, I am bit confused. So do you think demand will outstrip supply or not? Thanks, John
Spec  |  June 13, 2011
Sure you meant the difference between oil discoveries and oil production. There is no way to run a 30 year year deficit of oil consumption over oil production. That much oil storage does not exist.
Michael Pilson  |  June 13, 2011
Most of this discussion is nonsense. In the last decade the draw down of stored above-ground oil amounts to perhaps 15 billion barrels, if the numbers reflect reality. They cant. Obviously there is a systematic under-reporting of production or a an over-reporting of consumption. It is not good to base activities on suspect data.
Don  |  June 13, 2011
This data implies all the oil in storage is being used up since 1981. Sounds like the world is running on perpetual motion creating oil from using it. Fire the staticians!
m. y. (merch) merchant  |  June 13, 2011
IN THE SHORT AND THE LONG TERM THE WORLD IS RUNNING AN OIL PRODUCTION DEFICIT COMPARED TO CONSUMPTION. NOTWITHSTANDING ECONOMIC DOWN TURNS IN THE US AND ABROAD, PRICE WILL BE ON THE HIGHER END OF THE SCALE WITH AN INCLINE. ALSO, CONSIDERING THE FACTS THAT COST OF DOING BUSINESS IS HIGHER, GOVERNMENT REGULATIONS, WHETHER THEY ARE PIT RULES IN NEW MEXICO, LIZARDS IN THE PERMIAN, PRAIRIE CHICKENS IN SE NEW MEXICO, RESTRICTIONS OF FRACING?, ONE CAN NOT SAY WE WILL HAVE ENOUGH ENERGY TO SUPPORT THE WORLD...SPECIALLY THE USA!

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