The trend is now consistent across all regions, with the West up 2.5%; North Central up 1.6%; North-East up 0.8%; South Gulf up 2.8%; and South Atlantic up 1.8%. When the 12-month rolling total is plotted, the trend is now definitely upwards.
June 2009 12-month rolling total of miles travelled (FHWA)
The report breaks the miles travelled down into rural and urban sectors, and while the rural number has been above last year for a couple of months, it is only this month that the urban miles has also risen above last year.
June 2009 Travel on US Urban Highways by month (FHWA)
This is, again, a somewhat encouraging sign that the economy is in a state of turn around, although, apropos my post yesterday, the big question of what happens when not only the U.S. but all the other countries, including Western Europe also begin to pick up steam and look to additional fuel supplies may be answered more rapidly than had at first been feared. (Although the result of finding out may not be pleasant either).
UPDATE: I changed the plot below of US gasoline demand to the new plot that TWIP published today.
A quick look over at the TWIP shows that gasoline demand has really not changed much – if any, relative to last year, but the volume demand would have to increase quite a bit for that number to detectably change on the plot (the numbers show we are still around 300,000 bd short of last years demand at this time). (Number went up 100,000 bd relative to last week with the new data).
U.S. gasoline demand though August 22, 2009 (TWIP)
As I mentioned last week I expect that OPEC will be able to cope with the increase in demand next year, but will start to strain at the demand in 2011, and have difficulty meeting it towards the end of that year and into 2012.
Now that is not what you will hear from the cornucopians and Michael Lynch had an editorial in the NYT excoriating those of us who doubt.
A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum.His main target at the moment happens to be Fatih Birol, the Chief Economist at the International Energy Agency (IEA) whose predictions I wrote about with concern at the beginning of the month. The particular one of concern is that the decline rate that has been reported for older oilfields is now at 6.7%, rather than the 4.5% which has been historically assumed and which models for future supply have been based on. Over a year ago Sam Fourcher in The Oil Drum showed in two graphs (one at the top of the post and the more worrying one, hidden in comments what a difference a change from 4.5% to 5.2% had on the time at which global production would peak (it moved it forward in time about 3 years) and in the steepness of the resulting decline. Now (and Fatih Birol is by no means the first to report these higher numbers) declining production is shown to be 1.5% worse that the second graph assumes. This is not “anecdotal information, or a vague reference.”
Unfortunately when the facts don’t support his argument our good cornucopian carefully changes his topic so that he can tar those of us concerned about the future supply of oil with a set of arguments that he can shoot down, vide:
for the most part the peak-oil crowd rests its case on three major claims: that the world is discovering only one barrel for every three or four produced; that political instability in oil-producing countries puts us at an unprecedented risk of having the spigots turned off; and that we have already used half of the two trillion barrels of oil that the earth contained.
Actually, at the moment none of my immediate concerns and the subjects of recent posts include any of those points. Yes there is a longer concern about the state of reserves – The graphs that are assembled from the Megaprojects database come from the predicted times of planned projects coming on-stream. These are projects that are of significant size, and thus take time to bring to fruition and, at that scale, receive significant coverage in the technical press (Rigzone and the Oil & Gas Journal spring immediately to mind as sources I look at every week among more than a dozen others).
Declining production from different countries (such as the UK and Mexico – as I pointed out yesterday) is a matter of public record, and the amounts that are disappearing from the world stage are not trivial. And when, as I reported yesterday, the major Russian oilfield at Samotlor now finds itself are producing at 90% plus water cut this significantly impacts production (pumps can only physically move certain volumes at a time and if most of it is water you can’t speed up your pump much to increase the oil flow for simple fluid mechanics reasons– a point that seems to be lost on our cornucopian.)
Yes the world continues to find oil in new fields, but they are not as easy to find and develop and they don’t last as long as the old giants. In Russia successive oilfields moved further East as the original fields wore out, and they have now reached as far East as Sakhalin Island.
Sequence of Major Russian oil discoveries and developments (after Grace shown on a Google Earth map )
So, according to Michael Lynch, we should anticipate that if they go North and East of Sakhalin Island they will make their next discoveries and we can all relax.
Oops! There is only one slight flaw in the argument – you see that new area is known as Alaska – Russia sold it some years ago, and I believe that somebody else has already been there and got that oil!