Something to Worry About

Posted on July 4, 2014 by Arnold Kling

James Hamilton said,

ince 2005, field production of crude oil has increased very little worldwide, with U.S. shale oil production accounting for more than 100% of the increase—in the absence of these new sources of supply, global production today would be lower than it was in 2005.

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6 Responses to Something to Worry About

  1. Mike says:
    July 4, 2014 at 10:51 am

    The interesting plot would be barrels of oil / employee and then charting the difference over time between the big nationally owned companies, the big privates like Exxon/Mobil and finally the small privates all over Texas and North Dakota.

    My suspicion is that the barrels of oil / employee has shrunk significantly over time at the nationally owned companies like Pemex, NIOC and Aramco.

    Another interesting plot would be exploration expense / employee.

    I also bet there is divergence in any real measure of investment per employee. Investment broadly defined as capital equipment expenditure (addition or replacement), etc.

    The good news is that these nationally owned oil companies are such and important part of their respective governments’ revenue stream that eventually they’ll have to invest in their fields.

    Them boys from North Dakota and the Permian Basin are eventually going to see the world. Fracking as they go.

  2. Bill says:
    July 4, 2014 at 2:05 pm

    Why should we worry about this? If Supply=demand then prices reflect relative scarcities/marginal values: end of story. The stone age did not end because we ran out of stone and the oil age will not end because we run out of oil.

  3. Jon says:
    July 5, 2014 at 1:40 pm

    This has been the long standing rebuttal to the peak oil crowd who believes in hubbert curve. It’s hard to pump exponentially faster while maintaining long term recovery. The likely scenario. Is that the production rate is going to level and hold constant and it has…

  4. Floccina says:
    July 11, 2014 at 4:19 pm

    BTW we do not so much buy petroleum but transportation, so if hybrids can be made for the price of non hybrids that is like producing 30% more petroleum.

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