Peak Oil update

About a third of the growth between 2005 and 2012 came in the form of natural gas liquids, chief among which are ethane and propane. These are useful hydrocarbons, but you can't use them to power your car. The growth in NGL production has been a big benefit to industrial users of these chemicals; for motorists, not so much. Another important source of gain has been biofuels, which themselves require a significant energy input to produce. Actual field production of crude oil, which accounted for 87% of the total liquids produced in 2005, accounted for only 41% of the growth since 2005.

It's also interesting to look at where the growth in field production came from. U.S. production grew by 1.3 mb/d and Canada by 770,000 b/d. Between them, these two countries could account for more than 100% of the 2.0 mb/d increase in world crude oil production since 2005, Production from all of the other countries in the world combined actually fell a little between 2005 and 2012. Significant gains in places like Iraq, Russia, and Angola were more than offset by declines in the North Sea, Mexico, and Iran.

Within the United States, more than all of that 1.3 mb/d increase could be attributed to production of oil from tight formations, which the EIA estimates accounted for 2.0 mb/d of total U.S. oil production in 2012. And within Canada, more than all of that 770,000 mb/d increase could be attributed to production of liquids from oil sands, which the National Energy Board estimates increased by 830,000 b/d between 2005 and 2012. In other words, without oil sands and tight oil, crude oil production in the United States and Canada, and for that matter the world as a whole, would have been lower in 2012 than it was in 2005.

The EIA anticipates that U.S. tight oil production can continue to increase another 800,000 b/d above 2012 levels before peaking in 2020.

The surge over the last two years is unprecedented. Even so, the levels for the first half of 2013 remain 2.5 mb/d below the peak of 1970. If the EIA projections above are correct, none of this is going to change the fact that U.S. production peaked 40 years ago. Instead, tight oil will give a dramatic but temporary bump back up in a longer trajectory of decline, similar to that provided by new production from Alaska in the mid 1980s.

The peak in world oil production is yet to come (Econbrowser)