92 comments on IHS Data Suggest Kuwaiti and Global Proved Oil Reserves Significantly Lower Than BP Estimates
Comments can no longer be added to this story.
Blogroll
- ASPO The official site of the Association for the Study of Peak Oil & Gas.
- Energy Bulletin Clearing house for news regarding the peak in global energy supply.
- PowerSwitch Dedicated to raising awareness & discussion of the impending & permanent decline of cheap oil & gas supply.
- ODAC Oil Depletion Analysis Centre working to raise awareness and promote better understanding of the world's oil-depletion problem.
- Global Public Media Public service broadcasting for a post carbon world.
- Post Carbon Institute Learning to live in a low energy world.
- PeakOil.com US site and forum to educate and promote awareness of global hydrocarbon depletion.
- FEASTA The Foundation for the Economics of Sustainability
- Tradable Energy Quotas (TEQs) This website describes an effective and fair response both to climate change and oil/gas depletion
Other Blogs
User login
Personnel
Editors
Contributors
Peak Oil Primers
Archives
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- March 2006
Vital Trivia
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
First of all I must note that this information points towards the same conclusions taken by Laherrère (who uses HIS as one of his data sources). If take out all the political additions to ME reserves you get the same technical numbers.
Some comments:
Are we talking of Resources or of Reserves? Because resources are the fraction of reserves than can be ultimately recovered (me thinks).
I always have a hard time with this kind of stuff. How can the price determine if a resource is recoverable or not? It is the net energy of the yielded oil that determines that, not the price; the price just gives you an idea of the balance between supply and demand.
Take the good old US data set. Production started to align with the logistic curve in 1958 pointing towards an URR 200 Gb (Lower-48). Now in 1979 with WTI at 80$/b the data still pointed towards 200 Gb. Today with oil at 60$/b it still points towards 200 Gb. To me it makes no sense to say that prices grow or shrink reserves. What do you make of it Euan?
As a side note, looking at this data from IHS it really makes CERA's report look silly.
In the real world price is everything, if a company can earn money for doing something the EROI is irrelevant, to that company. What's the EROI of manufacturing Duracell batteries, or even corn ethanol? Whilst we can say extracting oil from the ground when the EROI is below 1 with the express intent of burning it in the pursuit of energy is a futile exercise from a global net energy supply point of view, it doesn't necessarily prevent it being done.Oil could be extracted with EROI < 1 if it's application will be as a chemical feedstock rather than energy source or if the input energy isn't in as usable form as the resultant oil. For example if it takes 1.5 units of nuclear fission generated heat energy to extract 1 unit of liquid hydrocarbon energy it still might be worth doing if your objective is to fly a 747 from London to New York. And if the 1.5 units of nuclear energy only cost $10 and the 1 unit of liquid hydrogen energy cost $20 you're making a profit!
Currently, quality is usually measured by market forces. But liquid fuels IN REALITY are much higher quality than the market realizes, implying that the EROI that society collectively chooses to pursue does matter.
Re Resources versus Reserves I'm using the IHS terminology. I said this:
Money and energy have not yet become equivalents. High oil price in the North Sea has meant a larger number of field decomissionings being postponed, old fields geting refurbished (Forties), and keeping the infrastructure out there means satelite fields can get developed. All that means more oil produced owing to higher price. The higher the price goes, more and more marginal projects will get developed world wide - until that is as you correctly point out that you use more energy to develop than you recover. I think there's a ways to go yet before we reach that point - but that will be the ultimate ceiling.
My feeling is that we go over peak in 2012±3 before net energy constraints kick in. I think eventually electric cars will be cheaper to run than ICE cars with gasoline at $200.
I don't think the equation is quite that simple. The problem is that costs also rise with rising oil price, and perhaps surprisingly, oil companies don't factor that in. I'm not even sure how you could predict how much costs would rise, it depends so much on external economic factors.
So when they say "economic recovery at $60/bbl", they mean if underlying costs don't change. As Luis points out, poor EROEI tends to mean poor $ROI, but the link is not 1:1 for the reasons Chris outlines. Marginal projects will stay marginal, and if the price of oil has been undervalued, in fact become more marginal. It's a classic case of diminishing returns, which IMO is the underlying reason for the shape of the Hubbert curve.
While projects with paid infrastructure can be squeezed to produce more, new projects are facing escalating costs and I have read several reports saying certain planned projects are "under review" due to costs.
Incidentally this appears to be a major Achilles heel in CERA's assumptions, which I haven't seen mentioned much. They don't seem to take account that the rate of exploitation of marginal sources will be much lower than conventional sources, which is why they can't make up for decline, and why their predicted plateau is highly unlikely.