follow us like us subscribe contact us
Loading, please wait

What the EIA's World Oil Production Data for 2011 Tells Us About 2012

By Gail Tverberg | Thu, 12 April 2012 22:15 | 13

The US Energy Information Administration (EIA) recently released full-year 2011 world oil production data. In this post, I would like show some graphs of recent data, and provide some views as to where this leads with respect to future production.

World oil supply is not growing very much

World Crude Supply
Figure 1. World crude oil and other "liquids" supply has dropped below the 1983-2005 trend line in recent years. Actual data is from EIA International Petroleum Monthly, through December 2011.

The fitted line in Figure 1 suggests a “normal” growth in oil supplies (including substitutes) of 1.6% a year, based on the 1983 to 2005 pattern, or total growth of 10.2% between 2005 and 20011. Instead of 10.2%, actual growth between 2005 and 2010 amounted to only 3.0% including crude oil and substitutes.

The shortfall in oil production relative to what would  have been expected based on the 1983-2005 growth pattern amounted to 4.7 million barrels in 2011. This is far more than any country claims as spare capacity. This is no doubt one of the reasons why oil prices are as high they are now. These high oil prices tend to interfere with economic growth of oil importing nations.

The shortfall in growth especially occurred in crude oil. Figure 2, below, shows crude oil production separately from substitutes.

World Oil and Other Liquids Supply
Figure 2. World oil and other liquids supply, broken out into crude and condensate, natural gas plant liquids, other liquids (mostly ethanol), and processing gain (increase in volume from refining heavy oil), based on EIA data.

Between 2005 and 2011, crude oil production rose only 0.5%. It was mostly the substitutes that grew.

Top Oil Producers

The top five crude oil producers in 2011, based on the new data are

1. Russia – 9.8 million barrels a day (mbd)
2. Saudi Arabia – 9.5 mbd
3. United States – 5.7 mbd
4. China – 4.1 mbd
5. Iran – 4.1 mbd

The top five producers when substitute liquids of various kinds are included are the same countries, but in a different order. On this basis, the US also appears to be closer to catching up to the top two.

1. Saudi Arabia – 11.2 mbd
2. Russia – 10.2 mbd
3. United States – 10.1 mbd
4. China – 4.3 mbd
5. Iran – 4.2 mbd

While substitute liquids are OK, they are not really crude oil. Natural gas liquids are the largest category. In the US, they sell for a little less than half as much as crude oil, based on the composition and costs shown in this post. On an energy content basis, they provide about 70% as much energy per barrel as crude oil.

“Other liquids” has also been growing. It is mostly ethanol, which has about 60% of the energy content of crude oil per barrel. This category also includes biodiesel, liquid fuels made from coal or from natural gas, and even a mixture of water with very heavy oil called “Orinoco emulsion“.

There is also growth in “processing gain”.  This term refers to the extra volume that is gained when long hydrocarbons of heavy oil are”cracked” into shorter molecules. The EIA assigns this growth back to the country doing the refining. The US comes out ahead in this comparison because it imports a lot of heavy oil, and uses its complex refineries to crack it into shorter chains, such as diesel fuel and gasoline. If the heavy oil imports were to go to another country with complex refineries (such as China), the processing gain would go with it.

Looking at the Top Five Oil Producers

Of the top five oil producers, only the US and China have been growing very rapidly, and China’s growth now seems to be hitting limits. Let’s look at the five largest countries individually.

Russian Oil Production

Between 2005 and 2011, Russia’s oil production (including substitutes) grew by 7.5%. This is better than the world average of 3.0%, but still falls short of the expected growth between 2005 and 2011 of 10.2%, mentioned above, based on the 1983 to 2005 world growth pattern.

Russia Oil Production
Figure 3. Russia oil and other liquids production based on EIA data.

In 2011, Russia’s crude oil production grew by 0.6%. Growth may be slowing even further in the future. Russian Economic Minister, Elvira Nabiullina, was recently quoted as saying that Russia’s possibilities for crude oil growth have been exhausted and that Russia’s oil output will stabilize at the 2011 level for the next 20 years.

Saudi Arabian Oil Production

Figure 4 (below) shows that Saudi Arabia’s oil production has not increased much on an annual basis since 2005.

Saudi Arabia Oil Production
Figure 4. Saudi Arabia oil and other liquids production, based on EIA data.

Looking at crude oil only, Saudi Arabia’s production is down by 0.8% since 2005. If one includes natural gas plant liquids (mostly ethane, propane, and butane), Saudi Arabia’s oil production for the year 2011 is up by 0.6% since 2005. This is less than the world average of 3.0%.

Saudi Arabia’s oil production bounces around. Admittedly, for some individual months, Saudi Arabia has broken its own record for crude oil production, but there is no pattern of continuously increasing production, such as is needed to increase world oil supply.

United States Oil Production

US oil production is growing (total liquids supply increased by 21.2% between 2005 and 2011), but the major portion of the growth is coming from oil substitutes.

US Oil Production
Figure 5. US oil and other liquids production, based on EIA data.

A comparison of the thickness of non-blue bands on the US graph with those of the world (Figure 2) and with other countries shows how disproportionate the US mixture is.

If we look at US crude oil production by area of the country, we see that while Bakken production in North Dakota has been growing, it is still a small proportion of US total production.

US Crude Oil Production by Area
Figure 6. US crude oil production by area, based on EIA data.

Before the shale oil rush, the biggest growth in US oil production had been from what I have called “deepwater”(what is called “Federal Offshore” in the EIA data). This production is down by over 200,000 barrels a day in 2011, more than double the growth in North Dakota production.

The other recent area of oil production growth is Texas. While EIA data does not break the production out by field, higher production of oil from Eagle Ford shale is likely a major contributor.

China’s Oil Production

China’s oil production plateaued in 2011, after many years of strong growth.

Chinas Oil Production
Figure 7. China oil and other liquids production, based on EIA data.

Figure 7 shows that China’s oil production for 2011 slightly decreased. The Financial Times recently reported that part of the problem is an outage of over 150,000 barrels a day in the Penglai 19-3 field, which reduced production starting in September 2011, but is now coming back on line. But even apart from this, China is reported to be  struggling to find new production to offset declines in aging fields. The Financial Times calls the outlook “challenging”.

If China’s oil production fails to grow in the future, or declines, it means that China will need to import even more oil than it has in the recent past. This will put even more pressure on world oil supply.

Iran’s Oil Production

Iran is constantly in the news with discussions of more sanctions and the possibility of  cutting off Iran’s oil exports. While it is listed above as fifth in world oil production, it is almost tied with China for fourth in world oil production.

Iran Oil Production
Figure 8. Iran oil and other liquids production, based on EIA data.

Iran’s oil production hit a high point in 2005, and is down slightly from that level. Its exports are down even more:

Oil and Gas Production, Consumption, and Exports
Figure 8. Crude oil and natural gas liquids production (gray), consumption (black line) and exports (green). Data is from BP, and only through 2010. Graph from Energy Export Data Browser.

The fact that Iran’s oil production is not growing is no doubt one of the reasons it is interested in electricity production from nuclear energy.

In my view, Iran’s oil exports of over 2 million barrels a day are very much needed to maintain reasonable stability in world oil prices. We would be better off finding a different way to settle our differences with Iran than cutting off exports.

Other Areas of Interest

The North Sea has been a problem area, with declining production. EIA data does not show this grouping separate. Instead it shows data for Europe in total.

Europe has surprisingly low oil production. On a crude oil basis, Europe’s 2011 production is below that of Iran (3.4 mbd for Europe, and 4.1 mbd for Iran). With the various substitutes included, Europe’s production is approximately equal to that of China – 4.3 mbd, and slightly ahead of Iran’s at 4.2 mbd.

European Oil Production
Figure 9. Europe oil and other liquids production, based on EIA data.

Clearly Europe has a very serious problem with falling oil production. In 2011 alone, crude oil production was down by 8.9%, and more broadly defined liquids were down by 7.4%. Europe’s declining oil production is no doubt contributing to it financial problems.

In contrast to Europe, there are a number of bright spots with respect to world oil supply.

Canada’s oil supply is increasing:

Canada Oil Production
Figure 10. Canada oil and other liquids supply, based on EIA data.

Of course, one of the issues relating to Canada is that quite a bit of the increase is from the oil sands. This production is of concern for environmental reasons.

The Former Soviet Union excluding Russia is another area where production has been increasing, at least until recently.

Former Sovier Union (excluding Russia) Oil Production
Figure 11. Former Soviet Union (FSU) excluding Russia oil and other liquids supply, based on EIA data.

The graph would seem to suggest that production may have plateaued in this area, as well.

Qatar is a small country, but is showing rapidly increasing production from a small base:

Qatar Oil Production
Figure 12. Qatar oil and other liquids production, based on EIA data.

Iraq is often mentioned as an area which may have increased production in the future.

Iraq Oil Production
Figure 13. Iraq oil and other liquids production based on EIA data.

Figure 13 shows that there really hasn’t been a huge increase in production so far. Past history is so unstable that it raises questions about Iran’s ability to ramp up production in the future.

Libya is mentioned as having a possibility of increasing production, at least relative to the drop off in 2011.

Libya Oil Production
Figure 14. Libya oil and other liquids production, based on EIA data.

While some increase from the 800,000 barrels a day production seems likely, it may never fully get back to its old level. A recent analysis says Oil Production Still Unstable in Libya. According to this article, security concerns are likely to hold back future investment by outside companies in Libyan production, and sluggish political decision-making is likely to hold back actions of Libya’s National Oil Company.

Various African countries are mentioned from time to time as providing new sources of production. But when we look at African production, excluding that of Libya, we see that at least so far, African production, excluding Libya, is on a plateau.

Africa (excluding Libya) Oil Production
Figure 15. Africa excluding Libya oil and other liquids production, based on EIA data.

Brazil is also mentioned as a growth opportunity.

Brazil Oil Production
Figure 16. Brazil oil and other liquids production, based on EIA data.

The actual increases to date have been small, however. Crude oil production in 2011 increased by only about 51,000 barrels a day over 2010. Ethanol production decreased, so that total liquids production decreased slightly in 2011.

Conclusions

It is easy to find small opportunities where it looks possible to increase oil production, but on a world-wide basis, it appears likely that at best, very slow growth will continue. The oil production of China and Russia were previously increasing, but now seem to be hitting plateaus. Even smaller groupings, such as the FSU excluding Russia, seem to be hitting plateaus.

Future prospects for oil supply look to be worse, especially if Iranian exports are taken off line, or if there are unexpected surprises on the downside. One concern is that political disruptions may take oil production offline in additional countries. Another is that financial disruptions (perhaps related to European debt defaults) may lead to lower oil prices, cutting off some marginal supply.

On balance, it would appear that at best oil production in the near future will be virtually flat, leading to more spiking of oil prices and greater world economic problems. Another possibility is that world production will begin to decline. The likelihood of decline would appear to be increased if more oil exporters encounter political disruptions, or if the world enters a major recession leading to an oil price decline.

By. Gail Tverberg

Gail Tverberg is a writer and speaker about energy issues. She is especially known for her work with financial issues associated with peak oil. Prior to getting involved with energy issues, Ms. Tverberg worked as an actuarial consultant. This work involved performing insurance-related analyses and forecasts. Her personal blog is ourfiniteworld.com. She is also an editor of The Oil Drum.

Leave a comment

  • Hans on April 13 2012 said:
    Ms Tverberg, is a well known Peaker, who can not admit when she is wrong...
  • Philip Andrews on April 14 2012 said:
    And can Hans, whoever who are, tell us why, in your opinion, she is wrong?
  • David Hrivnak on April 14 2012 said:
    Thank you for all your work here. It confirms my independant research that oil production has nearly leveled off at 2005. With automobile growth about 5% a year it points to tight and rising oil prices in the future.
  • greasySpoon on April 15 2012 said:
    Only one chart showed the increasing domestic consumption of a producing country at least theoretically capable of increasing production putting the squeeze on volume available for export. Perhaps an update of this article with internal consumption data, or charts, for the named producers and maybe an historical example or two of countries that are indisputably past peak production and their internal consumption lines would be entertaining. Here in the USA decreasing domestic liquid oil consumption is working out so well for us :)
  • Hans on April 16 2012 said:
    Thank you for your question, Mr Andrews...

    I had a chance to speak with, Ms Tverberg, several years ago and she impressed me with her accessibility and intelligence, however, as a Peaker she is badly misinformed..

    Peakers, are nothing new and have been advancing their theory since the decline of Pennsylvania crude production...

    The fact remains, after nearly 150 years of the Industry Revolution, not a single mineral, has been depleted...The same can be said of crude oil...

    This depletion nonsense is no different than that of those pronouncements coming from the Cub of Rome, in the 60's...

    If one examines the production level of 1960 to today's, the world has seen a four fold increase in goo production, over the past fifty years...

    Not only is oil production expense and risky, it is subject to numerous market pressures..It is not a manufacture process, wherein production can increase rapidly to meet consumer demand...

    Peakers have little understanding of economics, market forces and governmental interference through regulation and their devoted Enviro friends..

    The general theme of GET and her friends at the OilDrum, is to post production charts and draw the conclusion that goo production is coming an end...

    Moreover, Peakers, have even redefine what Peak Oil means, it order to accommodate their theory to today's world...When one has to restate their theory, they are already in big trouble...

    Sorry to disappoint you Peakers, but it will never happen...Not only will technology work again your theory, but price discovery or higher and higher prices for oil will cap demand...

    Despite the meddling of governmental units and their precious allies, The Enviros, goo production will continue to grow, year after year...

    What do you think would happen to Mexican oil production, if it was privatized?
  • Tom on April 16 2012 said:
    Hans,
    "Peakers", as you call them, are usually lumped into the "we are running our of oil" camp. I think that is unfair. While we are not ever going to run out of oil as shown with the proven reserves in the ground, we seem to be unable to keep up with demand on a worldwide basis. If you have not already done so please take a look at the BP Statistical Review of World Energy 2011 (it is an Excel spreadsheet).
    This document shows clearly that world production has not met world consumption for years. In fact you would have to go back to 1981 to have production exceeded consumption I am not a "Peaker" but this data tells me that we are headed for trouble. Regards, Tom
  • Hans on April 17 2012 said:
    Tom, I must agree with you, that the globe is not a wash with goo..In the 40's and 50's America had a large excess capacity and when a crisis developed, it could produce hundreds of thousand in extra production, something it is not capable now...

    Today, the difference between production and consumption, is indeed very narrow...This has and will again result in price spikes, as witnessed in 2007 and today...

    The principal reason US oil production has declined since 1960, is because of government interference and over regulating: as well as their conspiratorial environmental friends, who on many occasion have received block grants from the EPA and other units of government; who have sought to destroy property and mineral rights under the guise of protecting mother earth..It is after all their only God...

    "This document shows clearly that world production has not met world consumption for years."

    If the above was true, would not the market place demand higher and higher prices, Tom?

    The fact remains, that over 50% of world goo production comes from nationalized oil companies or state controlled enterprises, which clearly lack the incentive to be productive and hence lower output..

    All that would be needed to collapse taday's oil prices, is a sustained decline in demand of 5 to 10%, something that may in the offering with natural gas...
  • Philip Andrews on April 17 2012 said:
    What we seem to have here is the anti-Peaker, Hans, bashing the so-called Peaker,Gail Tverberg on the head for being in the other camp.

    'Sorry to disappoint you Peakers, but it will never happen': to my mind anyone who can say it will never happen, is gazing into a tunnel without realising it.

    I prefer Tom's more reasoned response to Hans' comment. There are always possibilities and always something emanating from the unexpected. I am aware of GT's qualifications from her numerous articles that I find personally quite plausible. The contributor Hans is an unknown quantity to me. I'm not in either camp and do not know much about the oil industry. My general awareness is that oil production at present cost levels cannot keep up with oil consumption. My understanding is that the peak argument is not about potential oil reserves but about economically exploitable oil reserves. The argument that we have passed the peak of economically exploitable oil reserves while human demand especially from the BRIC countries seems to be increasing almost exponentially, seems to point towards increasing shortages of economically exploitable oil.
    However much there is in the ground, if the price of extracting it is too much for our economies in their present shaky state to handle and to manage without plunging into new crises, then we have in effect to my understanding passed that peak.
    That is my understanding of world oil production as nonpartisan and completely inexpert Observer.
  • Tom on April 18 2012 said:
    Hans,
    ""This document shows clearly that world production has not met world consumption for years."

    If the above was true, would not the market place demand higher and higher prices, Tom?"

    Yes. This is one reason we are at $102 per barrel. Inflation is another reason. But it is this supply-demand tightening over the years that is IMHO the primary reason for the ever escalating oil prices. the XLS speadsheet can be found on this page:
    http://www.bp.com/sectiongenericarticle800.do?categoryId=9037130&contentId=7068669

    Regards,
    Tom
  • D C Jones on April 18 2012 said:
    If one examines the production level of 1960 to today's, the world has seen a four fold increase in goo production, over the past fifty years...
    Precisely why there will be a decrease in crude oil production. Hubbert's Curve was recognized by the The National Academy of Sciences decades ago. Scientists unlike charlatans and economist cons, recognize reality and the exponential function. Start with 2 seconds. Double it 30 times. Jump on to the utopian econo-magic-voodoo time machine, and then quick as a blink, back to the technotopia future from which it came over a billion seconds away. Welcome to the year 2046. Lesson two for those handicapped with economics. From the first oil well in 1859 to 1958 = 10% of all crude used to date. 1958 to 2011 = 90% From 1984 to 2011 50% of all the 1.16 Trillion barrels of crude ever produced was consumed. The next trillion barrels aren't low hanging fruit. Generously assuming there are a T bls. left, the extremely complex massive infrastructure and economy's of scale required to support the technology, economy and all the vital systems interdependent on all the others, it is not likely much of what is now considered recoverable, with a lot of other resources also, will be available. Efficiency comes at the cost resilience.
    Moreover, Peakers, have even redefine what Peak Oil means.
    Peak Oil has always been the same. “Flow Rate” is used commonly now, because the concept of production has no relation to depletion in Utopia where finite is mental kryptonite, and Peak Production indiscernible to the average “faither” from zero. The Sirens of Suicide merely change the lyrics to their song and the “faithers” follow.
    higher prices for oil will cap demand
    goo production will continue to grow, year after year...
    Capping demand is Peak Oil. Unless of course the act of producing more and more oil is some kind of religious experience or ritual, like being paid to not grow crops or destroy what is essential. Maybe it's me, I never have understood producing what people don't want or need, or what benefit the brain-washers get corrupting peoples minds when there is no finer thing than a fully developed mind.
    What do you think would happen to Mexican oil production, if it was privatized?
    Mexicans would suffer just like the people everywhere that have been and still are the victims of Fascism, as we all will be. America consumes the energy and resources of what is around it, directing the flow to the center, draining the periphery as all empires do. It's physics, a state of low entropy not Utopia. Entropy trumps magical thinking. Consumer economy = parasitic economy
  • Henry on May 16 2012 said:
    Amy Myers Jaffe, director of Baker Institute Energy Forum, a pocliy think tank at Rice University in Houston. "They are saying to themselves: I am going to produce the gas regardless of what the price is, because I'm making money on the oil and liquids."The article isn't about shale gas. It talks a great deal about gas production coming from drilling for oil. A lot of that gas comes from conventional oil wells, not shale. Yes, these companies can make a lot of money. But that does not mean that the shale gas producers who get a bit of liquids can make it with prices as low as they are. With petroleum selling for $90 a barrel, drillers in places like the Eagle Ford shale or the Bakken can give away their natural gas for nothing and still make 100% annual returns on their drilling dollars. -- ForbesShow me the 10-K forms that tell me that shale gas is profitable. (And when you do make sure that you are not just looking at the production cost, which is a fraction of the total.)Technology development and application are and will remain key elements in maximizing the full value of these large, long-life resources. Here are some examples: Unconventional production from Haynesville increased four-fold in 2010, while production in Fayetteville doubled in 2010. The Barnett Shale, where we currently have gross production of approximately 900 million cubic feet per day of gas, is another good example of value creation through technology. We have been able to maximize long-term ultimate recovery with longer lateral lengths and improved drilling and completion efficiency. And our net unit development cost in this shale play is about $1 per thousand cubic feet equivalent, a 50 percent improvement in the last five years ..." -- ExxonMobileWhat exactly is meant by net unit development cost? What happens when you include all of the other costs? Does this cost include the full depreciation or is Exxon using the overstated reserve estimates and the high EURs that have yet to be seen in the real world?And surely if shale gas were this profitable the pure shale gas players would be swimming in cash. But if that were true why are they swimming in read ink instead and trying to sell themselves off or find new credit lines.
  • Scott Sinnock on September 06 2012 said:
    Soon, soon, perhaps already, peak liquid petroleum. Oil sands and oil shale will fill the void but at a very high net energy and environmental cost. Price will definitely be higher, and thus living standards lower. I am about the first baby boomer, born January 1946, retired on the greatest Ponzi scheme ever, Social Security. The coming reinforcing tsunami's of baby boomer's pension expectations and peak oil are going to make for some interesting times. I will sure enjoy the show.

    Scott
  • Walt on November 07 2012 said:
    The one guy said, "no mineral has peaked out". Huh? Gold is sky high because production has been in steep decline for 10 years. Liar, liar, pants on fire.

    It is silly to discuss "peaking" as an IF. We are on a FINITE planet with almost infinite growth. Look at the graph of human population vs time over the last 5000 years. The line is vertical! It took 50,000 years from the time humans walked out of Africa for the population to reach 1 Billion people. Then the population hit 2, 3, 4, 5, 6, and 7 BILLION PEOPLE all in one persons lifetime! We hit 2 Billion in 1927. There are lots of people alive today from way back when the planet had... 1/4 as many people! The planet's population has QUADRUPLED in my fathers lifetime. What idiot could think that could continue for very long?

    We put 1 Billion people on the planet every 13 years. From 3 to 7 Billion people took 14, 13, 12 and 13 years to happen.

    FINITE resources vs INFINTINE demand? Hmmmm tough to figure out which side will will that fight.

    There is no question of IF. "Peaking Out" is mandatory. If you are mining for gold or drilling for oil or... etc. etc. your production will apx. follow a bell curve. If you are Easter Egg hunting, the eggs you find will follow a bell curve. Easy at the start then you find less and less per minute to find the last few eggs. It's common sense. It's Math. Most countries are well past their peak of oil production. When Saudi Arabia peaks.... watchout.

    The ONLY question is when will it hit and how bad will it be? When the population goes to 8 or 9 Billion then back down to 7 Billion... what will that look like? How do 1-2 Billion people (more than are born) die?

    Don't be stupid people, IT IS IN YOUR LIFETIME. There's no answer for food for 8 Billion people and 9 Billion mouths. MOST major resources are near peaking out: Gold, Oil, Water, Grain, Wheat, Silver.

    It can't be more than a decade away before real problems start. Like PERMANENT gas lines.

    Walt

Leave a comment