I will point out that these statistics clearly show that consumption is always greater than production - although I don't know how this is scientifically possible. Nevertheless, I am assuming that this is merely a statistical characteristic common in this field of study.
What is important in this research is the "%Cons" column. What this column reveals is the "shortfall" between consumption and supply, shown as a percentage of consumption. For the 1970 figures, 45.89 mbd was produced and 46.81 mbd consumed, leaving a shortfall of 0.92mbd, or -1.97% of consumption.
The really frightening thing about this research is the increasing percentage of consumption that is falling short. As time goes on, the difference goes beyond 10% and in recent times has gone as high as 14%. This means that there is an ever-increasing gap between oil produced and oil consumed.
In layman's terms, it means that consumption is increasing faster than production.
(note: someone else may have done this research before me and may be available elsewhere)
Prod = World Oil Production, Millions of Barrels per day (source EIA)
Cons = World Oil Consumption, MBD (Source EIA)
Diff = Difference between production and consumption
%Cons = Difference as Percent of Consumption
a. Jan-Mar figures
b. Jan-Feb figures. My own estimation based on OECD figures being approx. 59% of world consumption
c. 2004 - 2006 Production Data can be found here - pdf file 14.2kb
d. 2004 - 2006 Consumption Data can be found here - pdf file 16.4kb
Update 17 July 2006:
A comments thread at Sydney Peak Oil has been discussing this article, specifically addressing the shortfall between production and consumption. I think it is important to make a comment here about the issue.
It has been put forward that the reason why such a disparity exists is because the two sources that I have used are actually measuring different things. The production figures refer to "crude oil" production while the consumption figures refer to "petroleum" consumption. Specifically, the issue of Natural Gas Liquids (NGLs) and the fact that they are not included in the EIA Production figures.
I am willing to agree that the disparity may be due to this particular issue. However it needs to be pointed out that the production figures do include "condensate", which is the raw liquid that NGLs are produced from. I suspect that the reason why NGLs are not included in the production list is because it would involve double counting - the condensate would be included, which is then refined and turned into NGLs.
What this means is that NGLs are included in the production figures via the inclusion of condensate. The real questions is whether the consumption figures include condensate only, or also include the NGLs that are derived from the condensate. The latter case would be a possibility considering that the consumption figures are labeled as "Petroleum" rather than as "Crude Oil".
But this then begs the question of whether the statistical analysis itself is misleading since it would be counting things twice. To include NGLs in the consumption figures and not in the production figures would mean that the consumption figures are being counted twice. I doubt that this is going on, mainly because the market benchmark for measuring NGLs such as Butane, Propane and Ethane is in Gallons, while the benchmark used in the EIA consumption figures is Barrels. It would be very strange to a) count something twice, and then b) to refer to the whole (crude oil, condensate and NGLs) in terms only applicable to crude oil.
So while I have offered a reason why one explanation is probably incorrect, I have yet to offer my own explanation of why a disparity exists between production and consumption.
I think it has to do with the way in which the market measures both production and consumption.
Production would be measured in how many barrels of oil have been pumped into tankers, while consumption may be measured in terms of financial transactions. In other words, consumption is actually measured first (in terms of contracts specifying how much oil is to be delivered) and then production follows.
Which means. of course, that in a given year, say the year 1999, 75.83 mbd was agreed upon, and 65.85mbd actually produced.
The important thing to realise is that the contracts may be agreed upon in one year, and then delivered the year after. A contract may be agreed upon in December 1999, and then delivered in Feburary 2000. In terms of the statistics, the consumption contract would appear in the consumption figures for 1999, but the production figures would appear in 2000.
If this is true (and remember I am only offering this as a possible explanation), then the increasing disparity between production and consumption that is noted in my figures can probably be explained by the inability of the oil producers to fulfil their contracts since oil production is not meeting demand. In this case, the contracts may be signed in September, but not delivered until February - a longer lag in delivery time that is caused by slower production.
I am prepared to be proven wrong in this - mainly because I am offering a theory and not anything based on rock solid proof. It would be great if the EIS or Peak Oil bigwigs could offer an explanation. I'm sure that ASPO has been aware of this disparity for some time.
Further Update 17 July 2006:
The Wikipedia article on Petroleum indicates that Crude Oil and Petroleum are synonymous terms - they can be used interchangably. This doesn't offer any reason why the EIA chose to use both names in the production and consumption reports, unless it is the industry's way of talking about the product still in the ground (Crude Oil) and the product that is shipped and consumed (Petroleum).
From the Peaknik Department
© 2006 Neil McKenzie Cameron, http://one-salient-oversight.blogspot.com/
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