Peak Oil – Resources Page

Posted on December 20, 2011

0



Defined

The maximum rate of world oil production. With the exception of a few anamolies due to unusual geology and other various factors, every oil field follows a pattern in its production where oil production increase as it’s first developed, reaches a maximum point or plateaus at a lesser artifical maximum, and then declines from then onward. When this maximum production is reached on a worldwide level, that is peak oil.

The real interests of this are of course the effects decreasing oil production will have on the world economy if the mainstream is not converted to a different alternative energy infastructure beforehand. Since the world economy’s infastructure is so heavily dependent on oil, the price of everything else will go up as well as oil (which will skyrocket as the price of oil has been kept at an artifical low for the last several decades by excessive supply), and the economy will come to a crashing and spectacular finish as the world is thrown into super depression and the social instability that entails. More dire predicts based on the reliance of modern agriculture on cheap oil speak of a massive dieoff as the world’s food production, some claim, will no longer be able to support a world population above 4 billion.

Armed with such predictions, many peak oilists are strong advocates of alternative energy in the hopes these apocalyptic scenarios don’t come to pass.

Example:

Dude 1: Things will be like a paradise on Earth forever and ever. Nothing bad will ever happen to us ever again. Human genius can solve every problem no matter how unrealistically dire, just like TV!

Dude 2: But your forgetting… PEAK OIL!

THE BASIC OIL NUMBERS

Based on checking the data in the brilliant info graphic by Danny Prew above.

A – DR HUBBERT’S PEAK [Section 1 of the info graphic]

http://en.wikipedia.org/wiki/Hubbert_peak_theory

The concept behind this peal oil theory is sound and logical, and while the simplicity of the curve (as shown above in the introductory graphic on this page) does not model all the complexities of a natural oil reservoir (there is normally some sort of undulating plateau before the onset of decline, due to factors such as more advanced recovery technology), the fact remains that each individual oil producing region declines overall, each region contributing to an overall global decline as shown in the powerful graphic below right:

Also of interest is this classic quote from Hubbert

B – CRUDE OIL WORLDWIDE RESERVE NUMBERS  [Section 1 of the info graphic]

Proven Reserves = 250 E9 BBL (Billion Barrels)

According to the CIA Factbook: https://www.cia.gov/library/publications/the-world-factbook/rankorder/2178rank.html

The top 10 crude oil reserves by country (as at the end of 2010) are:

1 Saudi Arabia 262.6 E9
2 Venezuela 211.2 E9
3 Canada 175.2 E9
4 Iran 137.2 E9
5 Iraq 115.2 E9
6 Kuwait 104.0 E9
7 UAE 97.8 E9
8 Russia 60.0 E9
9 Libya 46.4 E9
10 Nigeria 37.2 E9

11 All Others 230.5 E9

TOTAL WORLD RESERVES = 1,476.9 E9 BBL (Barrels of commercially available crude oil from know fields as at Jan 2011, although not stated on the CIA website explicitly I expect these are P90 reserves as they are described as “proven with a high degree of confidence”)

So there is a massive difference in the info graphic numbers here, in fact it lines up better with the “Whats Left” section of the info graphic which = 1,292.6 E9 BBL, so I am not sure what the 250E9 number is meant to represent.

An interesting discussion section on Wikipedia (which appears to base it’s reserve figures on the International Energy Agency document) states that “Sadad al-Huseini, former head of exploration and production at Saudi Aramco, estimates 300 Gbbl (48×109 m3) of the world’s 1,200 Gbbl (190×109 m3) of proven reserves should be recategorized as speculative resources, though he did not specify which countries had inflated their reserves.  Dr. Ali Samsam Bakhtiari, a former senior expert of the National Iranian Oil Company, has estimated that Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates have overstated reserves by a combined 320–390bn barrels and has said, “As for Iran, the usually accepted official 132 billion barrels (2.10×1010 m3) is almost one hundred billion over any realistic assay.”  This means that worldwide reserve figures could easily be 30% overstated.

Also I also refer to the following documents for an assessment of Oil Reserves that is public information…

BP Statistical Review – this comprehensive document says it is based on government supplied information, i.e. it contains no results of reseach carried out by BP it’self, it is free.  BP’s Statistical Review is used extensively by OPEC and others in the industry as a key text.

They are stating a worldwide reserve

1,383.2 E9 BBL

as as the end of 2010 – but this includes a small amount of Canadian tar sands 26.5E9 BBL that are currently under production (BP also estimate that the Tar San reserves are 143.1E9 BBL in total, this figure not included in the reserve number I am trying to get a handle on in this review).  Below is a nice graphical represetatation that someone has produced using “statistical review numbers” but they don’t actually line up exactly with the above BPdoc, for any of the preceding years or 2010, so they must come from some other document….?  they are pretty close to the BP numbers and they do show nicely the geographical spread of the remaining oil.

Let us now have a look at the International Energy Agency IEA figures if we can, this organisation is “a Paris-based autonomous intergovernmental organization established in the framework of the Organisation for Economic Co-operation and Development (OECD) in 1974 in the wake of the 1973 oil crisis.  The IEA acts as a policy adviser to its member states, but also works with non-member countries, especially China, India and Russia. The Agency’s mandate has broadened to focus on the “3Es” of sound energy policy: energy security, economic development, and environmental protection. The latter has focused on mitigating climate change. The IEA has a broad role in promoting alternate energy sources (including renewable energy), rational energy policies, and multinational energy technology co-operation. IEA member countries are required to maintain total oil stock levels equivalent to at least 90 days of the previous year’s net imports. At the end of July 2009, IEA member countries held a combined stockpile of almost 4,300,000,000 barrels (680,000,000 m3) of oil”

While the official report costs report costs over 120EuroDollars, I am only interested in the overall Crude Oil reserve figure they are suggesting, so as to compare it with the above BP and CIA estimates:

= XXXXXE9 BBL

During my research, I came across this interesting article / allagation, suggesting strongly that the IEA reserve figures are spurious and overstated in order to avoid political pressure on the USA to change the nature of it’s oil based economy, from an anonymous ex employees of the IEA.

Another organisation is the American Energy Information Administration, they show stated reserves in the figure below:

By law, EIA’s products are prepared independently of policy considerations. EIA neither formulates nor advocates any policy conclusions. The Department of Energy Organization Act allows EIA’s processes and products to be independent from review by officials. 

But they state their source from yet another organisation (with some national adjustments) the Oil and Gas Journal, a paid service… The Oil & Gas Journal is a leading petroleum industry weekly publication with a worldwide coverage. It is headquartered in Tulsa, Oklahoma and the journal has a major presence in Houston, Texas. The journal is published by PennWell Corporation. Its publisher is Paul Westervelt, Vice President of PennWell Corporation, and editor is Bob Tippee. The first issue was published in 1902. Its online information services started in 1994.

The EIA estimate of Crude Reserves to the end of 2010 is:

= 1,471.2 E9 BBL

Here are a couple of good reads – although now a little dated on the realibility (or not) of the global reserve numbers:

http://planetforlife.com/oilcrisis/oilbartlett.html

http://planetforlife.com/oilcrisis/oilreserves.html

The more one looks at the reserve numbers the less confidence you gain in what we actually know about it… Because of a number of factors, it is almost an “unknowable” subject area:

There is no global standardization in the way reserve numbers are Calculated

There is no global standardization in the way reserve numbers are Reported in terms of certainty

There are various Conflicting Motives from a wide array of interests – both government and corperate on what reserve numbers should be reported- the following video is a very brief summary of these conflicts….

http://videos.howstuffworks.com/howstuffworks/40403-is-the-world-running-out-of-oil-video.htm

A further discussion on the conflicting motives can be found here:

http://heinberg.wordpress.com/2006/07/01/171-an-open-letter-to-greg-palast-on-peak-oil/

Speaking of mystical reserve numbers, another source of data is the OPEC statistical review, they are citing a worldwide oil resource for 2010 (presumably at the end of the calendar year) of

1,467.0 E9 BBL

The 108 page document they produce is really well put together and has tons of interesting production, distribution and economic facts relating to both the world wide and the OPEC nations.  It also has a really interesting review of the Oil Majors (Shell, ExxonMobil, etc) revenues profits and margins which will be pulled from the respective annual reports – be that as it may, the reliability of the actual reserves numbers from the OPEC countries leaves us, according to this former employer of the IEA, “Stuck in a Haze” http://www.theoildrum.com/node/8797#more, as mentioned above the OPEC reserve figures are likely to be overstated for production reasons.

In any case – what is really important, is not so much what the actual reserve number is (this will only let us know for how long the chronic crises of oil restrictions will drag on and how acute the problem is going to be) but at what point is our production capacity going to be outstripped by demand, I will now take a look at this in the following section:

Cumulative Production = 90 E9 BBL

Future Discoveries = 910 E9 Barrels

Advertisements