World Outside U.S. & Canada Doesn’t Produce More Crude Than In 2005

(By Matt Mushalik)

Incremental-World-Oil-Production-FIMAGEOutside the US and Canada, the world is in peak oil mode for more than 10 years now. There are many events which have brought about this bumpy production plateau. The sequence of these events has never allowed oil production to grow much over a longer time. We have seen the predicted negative feedback loops when oil production gets harder and more expensive. The end result of this phase is a weakened financial system with more debt and many government budgets in deficit.

The response to peaking conventional oil production was money printing and unconventional oil. In typical US style huge amounts of material, equipment and labour were mobilised to extract shale oil from tight rocks, a last resort after US production had declined since 1970. Skilfully designed propaganda of the oil industry employed the media to spread the news of an energy revolution. The objective of becoming independent of oil imports and thus beat OPEC excited the whole US nation. But it was overdone. The light shale oil – not your average crude oil – could not all be absorbed by US refineries and ended up in inventories. In a strange way, market forces did not work.

Later than expected US shale oil is peaking now. The latest case is the Chesapeake stock slump. If oil prices stay low for a longer time, oil production will ultimately go down and 2015/16 may be the global peak. Price spikes will be certain, further damaging the financial system. And then we have the Middle East. The sinkhole around Syria is widening month by month. There is no way a revived US shale oil industry could compensate for any losses when fights start in the Persian Gulf.

Incremental-World-Oil-Production-2001-2015

The red horizontal line is the maximum crude oil production level in May 2005 (the Katrina year). We can see that almost all additional oil produced now above that level is US shale oil. In other words: without US shale oil (which required cheap money from quantitative easing), the world would be in a deep oil crisis.

The grey line shows the September 2005 production level outside the US and Canada. The graph shows that the October 2015 production level is only slightly higher than in 2005, possibly within the accuracy of statistics.

We can therefore confidently say that growth of the world economy managed to make itself completely dependent on unconventional oil from the US and Canada.

READ MORE: World Outside U.S. & Canada Doesn’t Produce More Crude Oil Than 2005

This article was written by Matt Mushalik from the CrudeOilPeak,info website.  He does excellent charts and articles on the U.S. & World oil industries and production.  I started the article with his “Summary and Conclusion” because it perfectly describes what is going with the current state of affairs in the Global Oil Market.

Please click on the link and read the entire article as he breaks down the different continents production profiles.  Especially, check out Europe’s oil production since 2001 and you will see why they are in serious trouble.

Matt sent me this chart showing total world crude oil and condensate production minus the U.S. and Canada:

World-C&C-Excluding-US-Canada

Here is the link to the data from the chart above: EIA International Oil Production

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29 Comments on "World Outside U.S. & Canada Doesn’t Produce More Crude Than In 2005"

  1. Oil is up another 5% now, this will be a quick rise to $50. Then it trades between $40-$50 for a little while. Come October and a sharp rise to $150 will commence.

    People don’t understand how much China and India are thirsty for oil as their societies move to urban life. People are still blind and focused on the current surplus that will evaporate faster than it build.

    Call it a conspiracy, but I believe the US government has forced big producers to overwhelm the market for a while so they can strengthen the dollar and import massive amount of silver. I strongly believe the US will move from Petro dollar to Silver dollar. Watch silver then valuated equal or more than gold.

    As oil spikes, the demand for silver will be huge for the transportation industry. People will be forced to invest in hybrid cars and these cars run on super capacitors, fast charging modules, batteries and heat absorption for recycling. It will come so quick as the transportation industry has already done most of the experiments. Silver we be consumed in massive quantities by the car industry to conserve all the wasted energy in current ICE engines. This will be huge, I expect the car industry will overwhelm the silver market.

  2. The market has bottomed last week and everybody and his mother in the whole world has sold or shorted the market. The market will experience an epic rise from here, Dow Jones 30,000 in 2020.

    Electrification of the ICE engine and expanding technology (Tablets, smart phones and sensors) will be a huge boom in the next decade. The market will definitely rise sharply, I am positioned for the big one.

    Watch all the shorts slaughtered…..

    • Are insane?

    • “The market has bottomed last week and everybody and his mother in the whole world has sold or shorted the market. The market will experience an epic rise from here, Dow Jones 30,000 in 2020”.

      Fantasy.

      For that to happen, a prerequisite will be the dollar’s buying power will have been reduced to a tiny fraction of it’s current buying power. That is the only way. But that 30,000 figure…or any higher figure…will come after a substantial market decline or crash first. That’s what is most likely to happen.

  3. Something other than the financial world has to be in place to help physical silver find a more realistic level in true value. Newly invented reasons to keep the true value from finding new highs will surely kick in once the old ones are not working any longer. Rinse and repeat.
    Smoke and mirrors. It’s coming someday , soon , soon , soon , soon.

  4. I checked the data he referred to. For all countries , “crude oil including lease condensate” (condensate is not oil btw), quatrerly since 1994, got the XLS file and built the chart that excludes USA and Canada. Production has been growing during the last 10 years, albeit slowly — higher highs, higher lows, quite steady for such a tumultuous time. Just data and a simple regression, no interpretations.
    http://s27.postimg.org/5miz68ib7/Untitled_1.gif

  5. Joe,

    I have got to admire your optimism but things are a lot worse then you think. And NO the markets, any of them, have not bottomed yet. Oil will break $25/bbl, silver will break $14/oz, the DOW will likely hit 12,000 and the S&P will hit 6,000. Things are going to get a whole lot worse before they get any better and because of the EROI the recovery will be very difficult and slow. The chance of the DOW being 30,000 is virtually zero in the next 10 years.

    The Baltic Dry Index, a measure of shipping (read trade in the western world )is at 295 today, up 5.00 since the 11th at 290, but it is down 97.% from its May 2008 high. Do you know why it is ip 5.00? It is up because Iran has booked a bunch of oil tankers and is now shipping oil to Europe and this will continue until it, Iran, is shipping up to 1 million barrels per day. Do you think that even if somehow OPEC and the Russians agree to cut production that the price of oil will actually go up when every one else is going to continue pumping everything they can every day?

    The world is in the grip of a world wide deflation. The Chinese are and always have been lying about their economic output. Didn’t matter when everything was going up but now that it is going down it was probably around 3% last year not the 6.9% they claim and it is falling fast.

    All of the European banks are failing, all major US banks are being downgraded and China’s banks are not in any better shape but we won’t know the details until they fail. The Chinese have the worlds largest shadow banking system that no one really knows the scope of, but given their economic downturn, must be failing too.

    Your right about the shorts – they will get slaughtered but the longs have a long, long, long way to go.

    The silver to gold ratio almost hit 80 to 1 last week, so silver is still not been monetized. In spite of the fact that silver has been the go to metal for money through out history, that it is only 15-20 times more plentiful in the earth and that it may be that the above ground supply is nearly equal to gold, it has not happened yet. Until it does, silver is just another commodity.

    Good for us stackers who understand this time of market confusion is our opportunity to secure our future. Especially those of us that were late to the program.

    Buy for cash and stash.

    SteveW

    • Sorry S&P 600 not 6,000

    • SteveW,

      The Baltic dry index is the best buy signal. You buy when it is very low and you sell when it is high. The Baltic dry index is the reason I am calling for 30,000. All the gurus out there got it wrong.

      There is 3 trillion dollars in excessive reserve sitting at the fed forbidden from going to silver and the markets. As we go to negative interest rates, the banks will front run the world into Silver.

      Silver is already being monetized by stackers, you don’t need governments to monetize it. The stacking process is heating to go viral worldwide as the facts become more mainstream to average Joe.

  6. You are being generous with Joe; let’s not mistake delusion for optimism.
    There is a high probability to the downside for all equities and fiat currencies, but not so much for silver and gold. When countries experiment with demmurage (cost of storing/securing currency), that is either a sign of desperation or extreme manipulation. It has been tried unsuccessfully a couple of times in the 1930’s and both times reduced the legitimacy of their respective currency. Now it is being done on a gradually intensifying scale around Europe with their negative interest rates; this is just another way to inflate their currencies due to stagnate economies. When we see it spread to the U S, we will know change is afoot.

  7. Saxon, negative interest rates are not an attempt to inflate currencies. To the contrary, negative interest rates are a desperate attempt to deflate currencies in order to force people to spend their money instead of keeping it in the bank. There is to much money in the world resulting in economic growth below potential. The idea is to increase economic growth by forcing people to spend since negative interest rates mean nominal loss of purchasing power when keeping the money in the bank. The idea of artificially lowering the purchasing power of money was introduced for the first time by Gesell in Austria in the 1930’s I believe.

    There is an argument in favor of negative interest rates. The value of money is the value of work. However, the products resulting from work decay in value over time. They either fail to function or they get obsolete by technological progress or change in fashion. The new is always the enemy of the old. The same thing applies to services. Even scientific research has a declining value over time due to more recent work making older work obsolete. In other words, work and its product are subject to the laws of thermodynamics which says that everything falls apart in the long run. So why should the money, earned by producing products subject to the 2nd law of thermodynamics, not lose its value over time ? That is an important question which is never being considered or discussed. The question becomes more urgent at times of zero economic growth (like today). Hence the idea of negative interest rates.

    • Robert
      You are partially right. Gesell was the one to introduce demurrage to Austria from 1932-1934 and it did not accomplish the stated goals as an unemployment tax. The concept was this: “we must make money worse as a commodity if we wish to make it better as a medium of exchange”. John Keynes pursued it further with inflation of currency through velocity of money to inhibit its storage value. Negative interest rates will have the same effect as demurrage in promoting money to more rapidly circulate,
      It is interesting that you mentioned thermodynamics, but the only one of the three laws relating to entropy is the 2nd as you alluded. Specifically, it says that we are going from a highly ordered state to one of disorder or equilibrium. In such a state there can be no higher forms of life as we know it. You might think there is no consideration of the interrelationship of these concepts, but I have researched it quite extensively and I am glad to share this knowledge with any receptive minds wanting to know.

      • Saxon, thanks for responding to my comment. Regarding thernodynamics and questions about economic growth and monetary policies, one of the deepest thinkers in that area was Frederick Sody (cf. Wikipedia on his accomplishments and views). Although not an economist by training (he was a Chemist who received the Nobel prize for Chemistry in 1921), he wrote outstanding books on the subject of money, which have not been properly understood at his time, but make perfect sense today in view of the peaking oil production. My own views are to a large extent formed by reading his articles and books about this subject. Soddy opposed precious metals to the point that he recommended they should be made illegal for private acquisition. He clearly stated the contradiction between the exponential growth of money and the finiteness of all resources, especially fossil fuels. He was in favor of controlled inflation in order to resolve the contradiction between exponential growth of the money stock and the depletion of natural resources.

        I do not agree with your statement “we are going from a highly ordered state to one of disorder or equilibrium. In such a state there can be no higher forms of life as we know it.”

        I think the opposite is true. We use high quality resources (like fossil fuels) in order to advance our civilization. The knowledge which we have accumulated over the past millennia had a prize: depletion of resources in order to gain insight into the way reality works. That knowledge, by itself the ultimate representation of order, is the ultimate purpose of our existence. On a microscopic level, life is indeed the process of consuming high quality resources in order to produce garbage. Modern economic theory is the science of speeding up the process of garbage production. On the other hand, we have also the production of cultural goods (art and music, but also science like insights into the origins of the universe, gravitational waves, the future of the universe, spectacular progress in mathematics, physics and other hard sciences, material sciences, production technology etc). All of that is not really garbage. In comparison to what we know today, the future offers even more answers to fundamental questions. There is no question in my mind that we are moving, as a civilization, to yet a higher form of life in the future. The waste and the garbage which we produce along the way is in some sense necessary in order to keep the genetic pool of talent and diversity alive. Indeed, the main purpose of education is to find the real talent in the pool of all gifted humans.We are not really interested in educating the masses. We only need to educate the truly talented.

        • For a real understanding of our current financial fiasco and the consequences I recommend that every one read the following;

          Hunter Lewis, Where Keynes Went Wrong,
          David Stockman, The Great Deformation, and
          JÖRG GUIDO HÜLSMANN, The Ethics of Money production, https://mises.org/sites/default/files/The%20Ethics%20of%20Money%20Production_2.pdf

          We are in for a major cataclysmic depression as a result of the looney toons keynesian economic policies of the worlds assorted central banks.

          Keep on stacking, the time is coming.

          Buy for cash and stash.

          SteveW

        • Robert
          You contradict yourself when you disagree with the definition of the 2nd Law: it’s not my opinion it’s what the law states. I assumed you knew what it was since you were the one who first mentioned it. I encourage you to study more physics before trying to argue from that perspective. Learn the definition of equilibrium and it will help you understand the validity of my positional statement. Also learn about the Planck era and it will give you some basics in particle physics.

    • Currency is not money but debt. Labour is the measure of value Currency is not the most liquid transactional medium, where as money is, and cannot lose value because its acquisition has always taken more value in terms of energy and labour and time etc. than its market value. Throughout history more money has been spend it acquiring it, than exists.
      Currency is created by debt and is easily expanded by the promise to repay the same plus the interest, therefore there is always more debt than currency to repay it. Therefore it its existance is reliant on its declining marginal utility and the more there is of it, the less it is worth. It has declining lquidity.

  8. Robert that is not possible.In general we have saturation worldwide.The second is there is a lot of money.That’s true.But look to the distribution.

    The FED money rarely hit the real economy.The jobs in the USA are low paid and part time jobs.
    All this money printing is made to hold up the fata morgana of the financial system.There is no relation ship to the real economy.

    • Despite zero interest rate policies, there is low demand for money (=credit). In the past, lowering interest rates was THE tool in order to fight recessions. That tool does not work anymore. Creditworthy consumers do no apply for loans. They prefer to pay down past debts or hold the cash instead of spending it. To overcome that problem, negative interest rates are being promoted. That can work only if cash is abolished. Indeed, in a permanently shrinking economy, money needs to be destroyed steadily in order to force people to consume and to work. The alternative to negative interest rates is a large scale war in order to substantially reduce the size of the world population. I vote for negative interest rates in order to avoid the death of billions of people.

  9. Since economics haven’t helped silver, then the truth of all these emails boils down to supply/demand.
    Oil has had its affects. Demand for silver by auto manufacturers, the growth of the solar industry and
    the hopeful fact that the consumer sees that the US dollar is in trouble is the answer. Oil is passe’. Solar energy is our future. Silicon is the most abundant element in the earth’s crust. It is these consumption uses that will raise the silver demand. The crap most people email about since 2010 hasn’t done anything for silver. Supply/demand PERIOD!

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