Also fits with what the STEM companies were saying/doing in 1980. Target for Saudi was about 15 MMBD.
STEM = Socal(Chevron),Texaco,Exxon,Mobil -- the Aramco four.
And if Saudia Arabia cannot produce at that level, then world supply and demand will be out of balance by 2020, even with very optimistic assumptions about depletion rates.
Price will make a big difference in 2010. These demand growth estimates assume oil demand is inelastic. It isn't over a 5 year period.
Go back and look at a world demand curve from 1970 to 1990. In 1979 the curve (when extrapolated) indicated 120+ MMBD demand by now. Didn't happen. This current price step change and the soon to come leg up to $100 crude will make a big difference.
US transportation use is still huge and mostly wasted. DOE data show US demand at 7.4 MMBD in 1978, 6.5 in 1982 and 9.1 in 2004. We'll be up to roughly 9.3 this year. So the last price shock trimmed 10-15% very quickly but then the price crashed right back down. We've since increased demand by 40-50% even with greatly improved technology available. We're pigs. Data at: http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_25.pdf
Last week's DOE data show 9.8 MMBD mogas production +imports. That's 12%ish of the entire world's crude production for just 5% of the world's population.... Check any traffic jam. 90% of the cars are single occupant. Time for reality to bite the American consumer in the ass.
We can easily shave US use in half in 5 years if we have to. We won't like the price or the laws that motivate people to do it, but it can be done. Most people are just too damn lazy to car pool unless they have to. Up until now, the variable cost of driving alone was small beer. A 25 mile commute or 50 miles/day at 20 MPG and $1.50/gallon was just $3.75 in variable cost. Less than the Starbucks latte. The cost of the car itself has never been a factor in most people's commuting decision. You have to have a car or you just aren't a real 'murican.
We all know we can have cars that get 60 MPG. We just don't like them (your penis might shrink you know) and could afford to humor ourselves. I still lust for a Ferrari 456 with it's 12 MPG--one of my Wall Street buds just dropped $50K for hybrid Lexus SUV that only gets 25 MPG, but it has neck snapping acceleration. But he makes 5 big ones a year and could care less what gas costs. When the price of gas or rationing limits us to real transportation needs instead of rolling Viagra, we can cut oil use way back.
The first two years we lived in London, we used the bus/tube almost exclusively. Didn't even own a car and it wasn't like we couldn't afford one. My old man took the bus to work in the 60's because he couldn't afford the cost of parking/gas/2nd car for mom. Welcome back to reality USA.
