Peak Oil is You
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Page added on June 13, 2012
World oil reserves up 8 pct, supply fears persist
The world’s store of oil and gas jumped 8.3 percent last year, as exploration rose and record crude prices made marginal projects commercially viable, yet supplies will struggle to meet demand due to political factors, oil giant BP said on Wednesday.
BP said in its annual calculation of global oil and gas reserves – considered the industry’s most comprehensive – that oil reserves totalled 1,653 billion barrels at the end of 2011.
The world had 1,526 billion barrels of extractable oil in the ground at the end of 2010, BP said last year in its Statistical Review of World Energy.
“One perennial question is whether there are enough energy resources for our needs?” Chief Executive Bob Dudley said as he unveiled the report.
“The answer from this review is certainly ‘yes’: At today’s consumption rates, the world has proved reserves sufficient to meet current production for 54 years for oil,” he added.
The report – based on governments’ official reserves statistics, including those challenged by analysts – also showed that gas reserves rose over 11 percent in 2011.
Dudley said oil companies were currently finding it easier to secure new exploration and production opportunities than a decade ago, partly because new technologies made more projects viable.
Higher oil prices have allowed resources previously known to exist, such as Canada’s oil sands and certain deepwater projects, but which were previously deemed uneconomic to produce, to be profitably extracted, and therefore suitable for entry in the calculations.
Also, higher oil prices have spurred exploration, leading to new finds. Brent oil prices were on average 40 percent higher than in 2010 and exceeded $100 a barrel for the first time ever. At $111.26 per barrel, they were the second-highest in inflation adjusted terms, behind only 1864, BP said.
SHALE GAS
However, the reserves upgrades are not significantly impacted by shale gas and oil finds, BP said.
Though shale gas and oil have led to a turnaround in U.S. oil and gas production, BP Chief Economist Christophe Ruhl said it would take time to say confidently how large the resource base was.
BP’s optimistic outlook comes as OPEC countries met in Vienna to discuss possible production cuts to stem recent crude price falls.
Yet the current price weakness and the abundant oil reserves did not mean an easy outlook for consumers, Ruhl said.
Despite the increase in opportunities for Western oil companies to invest in new projects, most oil reserves remain in the hands of state-backed oil companies whose investments follow political mood swings rather than economic signals.
Hence, fields may remain undeveloped while demand goes unsatisfied.
“The world faces challenges in growing supply rapidly enough to sustain growth in energy demand and the economy,” Ruhl said.
Dudley declined to comment on BP’s plans to sell its Russian joint venture TNK-BP, or a report that BP was moving closer to a deal to settle litigation with the U.S. Department of Justice around its Gulf of Mexico oil spill.
15 Comments on "World oil reserves up 8 pct, supply fears persist"
Max Reid on Wed, 13th Jun 2012 3:45 pm
If the reserves are more, then how come the major oil companies had declining production.
They should also classify the reserves based on heavy crude. Heavy crude needs hydrogen, heat & electricity to process it into lighter motor fuels. Things are getting harder for the oil companies day by day.
bill on Wed, 13th Jun 2012 4:51 pm
54 yrs worth of oil? Yeah, at ever increasing costs. Until it costs as much to extract as people are willig to pay. That is the question; when do we get to that point?
Grover Lembeck on Wed, 13th Jun 2012 5:07 pm
That was my thought, Max- a lot of these reserves can’t be recovered unless the price of oil is too high for a resource based economy to function well.
Also, a lot of people are lying.
anonymous on Wed, 13th Jun 2012 7:37 pm
BTW, Venezuela has the Worlds highest oil reserves. And most of them are extra heavy crude with 8 degrees whereas most of the Saudi crude is between 15 to 40 degrees.
The crude quality is ignored and just the volume is taken. Is this correct.
Kenz300 on Wed, 13th Jun 2012 8:59 pm
Quote — ” At today’s consumption rates, the world has proved reserves sufficient to meet current production for 54 years for oil,” he added.
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At todays consumption rates —– that means no growth for China and India and the developing world — I do not think so. China GDP is growing at 8% and uses more oil every day. The Saudi’s and all other oil producing countries are using more oil internally every year. Consumption is projected to grow until/unless price increases cause world GDP to stop growing.
James A. Hellams on Wed, 13th Jun 2012 11:04 pm
This, again, is an effort to present a rosy picture by the oil companies, to keep the good times rolling for a lifestyle that is in dire need for change.
Living in a world that is insanely dependent on aviation and highways is NOT sustainable. We DESPERATELY need to get back to the trains, while we still have the precious time left!
Trains possess the technology to be the MOST ENERGY EFFICIENT AND MOST ENERGY ALTERNATIVE means of transportation we will ever have!
What this article clearly overlooks is the fact that extracting this oil is going to take ever increasing amounts of energy to produce, refine, and ship the oil products. When the energy needed to extract, refine, and ship the products of the oil is greater than the energy produced by the oil its self; then it is useless to produce any more oil. The energy return on energy investment factor will kick in long before all the oil cited in this article will be produced!
The total number of years, with EROEI included, will be much less than what is presented in this article!
SOS on Wed, 13th Jun 2012 11:24 pm
Exactly! Peak politics cause peak oil. As the supply rises the peak politics go into overdrive. Rising oil supplies threaten a whole lot of people.
The 8.3% is a very conservative number. New technologies, if allowed to evolve and develop, have solved the supply problems. Its taken about 30 yrs of research and development including the huge seismic effort in the 70s & 80s and the development of new fracking techniques and drilling technologies. Its these drilling technologies that are releasing the enormous supplies. Its the seismographers that found them. The drillers are tapping in.
This phenomena of development and increasing reserves is world wide. It cant be stopped and if the USA continues to try to stop it all of us are going to pay a very high price. Higher than the price peak politics is exctracting from us now.
Natural gas was the first to benefit from these technologies and now we have all the gas we need. Of course peak politics is right in there trying to stop it. The supplies and developing infrastructure will make a huge positive difference in our lives if peak politics dont kick in and stop or slow it down.
Cheap fossil fuels threaten a whole lot of people for different reasons. Peak politics = peak oil. Change the politics and change your life for the better.
SOS on Wed, 13th Jun 2012 11:36 pm
They have always fracked. In the old days the main method to loosen the hole used to be explosives. It still widely used when drilling water wells. Other down hole injections were also used like cotton seed. These were employed to tighten a hole and slow leakage.
Fracking wouldnt have been possible if technologies to control the enormous pressures at the well head hadn’t been developed. Once they could control almost any pressure the next idea was to send down sand and water brine (different brines for different formations) under tremendous hydraulic pressures to cause tiny fractures to develop in the formation. These fractures extend deeply, in all directions, into the formation and allow the hydrocarbons to flow into the well.
Some of the worlds best fracking sand is found in Central Minnesota near a town called Mankato. This sand is composed of tiny, spherical grains. They are immensly strong and worm their way into the formation with amazing efficiency.
This has of course benefited the economy in the Mankato area. Its a very good thing directly, and indirectly, for everyone.
SOS on Wed, 13th Jun 2012 11:49 pm
The problem with EROEI is its assumptions. There is no problem getting at one of the worlds largest oil reserves in North Dakota. The texans are having no problems and neither is Utah and Wyoming. Brazil is also having little problem with their new reserves and Mexico is seeing an upward trend in production with American drilling technologies. It doesnt look like the artic is going to be ignorred either. Hopefully Russian oil can flow through the Alaskan pipeline if they wont let American oil be developed.
What about all the gas reserves right there in Pennselvania?
None of these enormous reserves. oil or gas, are expensive to get at in terms of dollars or energy expended.
BillT on Thu, 14th Jun 2012 3:16 am
TOTAL Energy is the numbers you never see. Why? Because, total energy produced is falling, not growing. You cannot compare a barrel of sweet light crude to a barrel of moonshine(ethanol) They are two totally different energy quantities. Like comparing elephants and burros for pulling power.
THAT is what we should be told, but it would expose all of the lies we have been fed in article like the pone above which is nothing more than pimping for energy companies looking for more suckers.
MrEnergyCzar on Thu, 14th Jun 2012 3:52 am
Which of the 10 types of reserves are they talking about? 54 years is pretty bleak coming from an oil company… makes you wonder..
MrEnergyCzar
BillT on Thu, 14th Jun 2012 4:13 am
ALL types of energy sources will shut down before the end of the century. We will be back to solar gain to heat water for baths with the unit on the roof and the energy we get from the food we eat that is powered by sunshine. Nothing else will survive the coming financial collapse and reset to a much lower lifestyle. Say 1850?
Keith_McClary on Thu, 14th Jun 2012 6:28 am
Price quintuples, economically recoverable increases 8%.
SOS on Thu, 14th Jun 2012 6:27 pm
I think Keith_McClarys comment is a good example of how peak politics has decoupled energy supplies from energy price. I cant say the are totaly separated because we can clearly see they are not, but I can say that peak politics/peak oil causes much higher prices than necessary. Quintuples it I have heard.
BillT on Fri, 15th Jun 2012 3:15 am
There are no “increase in reserves,” there is only a supposed access increase. The amount of oil is already fixed. There is no more being made in our lifetimes. Zero, Zilch!
The access numbers change with the day, weather, stock market, war rumors, etc. How much that will eventually be pumped/mined and used is a lot less than the numbers projected by the Petroleum industry. For the above mentioned reasons. Everyone of them changes the access picture and all are in constant motion.
When the Petroleum Age is over and the American Dream is dead and buried forever, there will still be billions of barrels of oil and trillions of CF of gas in the earth and there they will stay. Just like there is more gold in the waters of the oceans than has ever been mined, there too it will stay for the same reason: EROEI.