Transcript Slide 1
World Oil Production Trend: How U.S. Shale Oil Production Changes the Trend Oil Price 1. 2. 3. 4. 5. 6. 7. A play Hubbert curve Technology Examples Lambda Hubbert Curve Lambda Hubbert Change Price Forecast 1. A Play What is this? This is Haynesville It is the number of rigs Why is the rig count going down? 1) Low natural gas price 2) Technology 3) Depletion This suggests: Shale can have quick peaks and declines 2. Hubbert Hubbert is a trend Discovery and Production Discovery Hubbert Curve Discovery, Production T0 T1 T2 Time Production Hubbert Curve US Lower 48 Production over time, up to 2005 CQ Hubbert Curve CQ Quadratic Hubbert Curve Time CQD 0 URR CQD Cumulative Hubbert Curve URR 0 Time Quadratic Hubbert Curve Hubbert Curve Based on Geological MAXIMUM Supply Production 0 URR Cumulative Production US Lower 48 Production versus cumulative production, up to 2005 US Lower 48 Production over time, up to 2005 3. Technology ? US Technology 2005 4. Examples Examples of Hubbert and Technology What is this? It is the US This is the US on Steroids What is this? This is the Soviet Union This is the Soviet Union on Steroids 5. Lambda Hubbert Risk aversion Quadratic Hubbert Curve Hubbert Curve Based on Geological MAXIMUM Supply Production 0 URR Cumulative Production Quadratic Hubbert Curve Production Hubbert Curve Based on Path of Actual Oil Geological Maximum Supply Production Paths of potential oil production expansion 0 URR Cumulative Production Venezuela and US 2005 Indexed Hubbert Curve World Lambda Hubbert Curve 2009 World Normal and Lambda Hubbert Curve 2009 World Lambda Hubbert Curve 2009 Normal Quadratic Hubbert Curve Equation QP b1 * CQP b2 * CQP 2 b1 URR b2 Lambda Hubbert Curve Equation QP = b1 * CQP + b2 * CQP1+λ World Lambda Hubbert Curve 2009 World Lambda Hubbert Curve 2009 World Lambda Hubbert Multi-Curve 2012 World Lambda Hubbert Multi-Curve 2012 6. Lambda Hubbert Change Forecast 7. Price Forecasts Consolidating TRENDS World oil Production (Billions of Barrels of Oil per Year) World Oil Demand Over Time 40 Projected Demand 1.5% per year increase 35 30 25 20 1973 Oil Price Shock 15 1983 10 1979 Oil Price Shock 5 0 1880 1900 1920 1940 1960 Years 1980 2000 2020 2040 World oil Production (Billions of Barrels of Oil per Year) World Oil Demand As a Function of Cumulative Production 60 50 1973 Oil Price Shock 40 Projected Demand 1.5% per year increase 30 20 1983 1979 Oil Price Shock 10 0 0 500 1000 1500 2000 2500 3000 3500 World Cumulative Oil Production (Billions of Barrels of Oil) Conclusion 1. 2. 3. 4. Hubbert, Hubbert , Hubbert. Lambda Hubbert Multi-cycle Lambda Hubbert Looking at history shows: 2nd cycles often short 5. World economy is hanging in the balance 6. A price shock can come at any time We are still in an Energy Crisis