[frankthetank]

$this->bbcode_second_pass_quote('', 'O')il companies want to change reserve accounting rules raising questions about the timing with regards to peak oil.

According to the Wall Street Journal big oil companies have issued a report with the goal of justifying how they account for their own strategic reserves.

The companies think that they can "be the best judge of their own stores of oil and gas rather than use a strict formula imposed by the
Securities and Exchange Commission. The companies argue that the SEC's method -- intended to provide investors with apples-to-apples comparisons -- is archaic and arbitrary, and undercounts the amount of energy on tap for the future."

The key to the whole situation is how fast a company replaces the oil it pulls out of the ground, a key measure used by Wall Street to give the company's stock their trading value.

[strider3700]

heh why am I not surprised to see exxon mentioned. They are generally slagged in the markets because they aren't replacing their reserves. I wonder what they classify as oil equivalent?

[rockdoc123]

If you read the article futher here is actually the crux of the arguments:

$this->bbcode_second_pass_quote('', 'C')ERA's report, according to the Journal cites key constraints placed on oil companies by the SEC, such as the rules that "prevent companies from claiming hundreds of millions of barrels of crude oil that can be taken from Canada's oil sands -- oil that is notoriously difficult and expensive to extract. But critics say the SEC rules don't take into account new technology that makes producing the oil profitable. Companies also complain about a rule that requires them to use the market price of oil and natural gas as of Dec. 31 each year to calculate which projects are economically feasible, a criterion for claiming reserves. At higher prices, more oil is profitable to pump. But a Dec. 31 price can be considerably higher or lower than the average for the whole year, the measure CERA prefers."