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50 comments on Review Response: Depletion and the Future Availability of Energy Sources
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50 comments on Review Response: Depletion and the Future Availability of Energy Sources
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Rembrandt, expanding on your comments above, I find it astonishing that the USGS, or anyone else for that matter, would take the OPEC reserve estimates at face value. They are clearly political and have shown little or no change since the mid 80s. If we used OPEC's reserve figures and accepted their reported decline rate for the last 25 years as the norm, then OPEC's current production would last forever.
Reserve growth is another matter. As you say above, all reserve growth is due to errors in the original estimate of reserves. There is no guarantee that future reserves will continue to be underestimated as they have in the past. In fact, the exact opposite may be the case. We have already seen many instances of this, the most notorious was Shell's overestimate of Oman reserves. Shell overestimated its proven oil reserves in Oman by as much as 40 percent. And more recently we find dramatic overestimates of reserves in Australia. Woodside May Downgrade Oil Reserves at Neptune, JPMorgan Says Production from the Neptune field dropped almost 60 percent from the third quarter of last year.
Also, it must be admitted that the EIA's production estimates, based largely on the USGS's 2000 reserve estimates, have proven to be much higher than actual production levels in the last eight years. Not only that but new discoveries have not lived up to the USGS's estimate.
Bottom line, all estimates of production and reserves should be based on the very latest factual data, not wild guesses from almost a decade ago or political estimates of reserves made a quarter century ago that have remained unchanged despite continued production during the ensuing years.
Ron Patterson
I largely agree with the "reserve growth due to errors/uncertainty" arguments. The typical reserve growth curve has what Laherrere calls a "hyperbolic" profile. Like Rembrandt says, most of the reserve growth occurs early on and then it reaches an asymptotic limit over time. In most of the cases one can fit the profile arguably well to a 1/(1+k/time) curve. This characteristic time dependence comes about when one probes an unknown depth with random guesses as to where the oil lies, aka as in dispersive reserve growth. http://mobjectivist.blogspot.com/2008/07/role-of-dispersive-discovery-in...
What keeps people intrigued by the notion of reserve growth is that although the initial reserve growth is fast, the long tails of the hyperbolic extend beyond the much faster exponential dampening that everyone expects to see. They therefore think there is something mysterious beyond this easily understandable effect of a conservative statistical estimator. In other words, reporting as a reserve whatever you have found with certainty guarantees future reserve growth. It is essentially the nature of conservative estimators to behave this way. It is quite possible that if people used the dispersive reserve growth estimator right away, we would not have such "under"-estimates to begin with. And this means that anomalous reserve growth would not even occur and the mystery would disappear. This might in fact happen in regions that are smart about estimating potential reserves.
That is not to say all reserve growth occurs in this way, just the portions that show the smooth asymptotic growth with time. Any discontinuous jumps in growth are likely due to technological advances. Also difficult to disentangle is the aggregation of reserves that Rembrandt refers to, as close proximity fields get combined at some later date, and the reserve growth jumps.
I agree with Ron that the data reporting is horrible and we are left to come up with more-than-educated-guesses to figure out what's happening. I bet if we had access to good data, we would have this figured out long ago.