Guest Post by Willis Eschenbach
In oil, as in other extractive industries, you have what is called the “R/P ratio”. In the R/P ratio, “R” is reserves of whatever it is you are extracting, and “P” is the production rate, the rate at which you are extracting and using up your reserves.
Figure 1. World annual oil production in billions of barrels (blue line), and years left at that production rate (R/P ratio, red line). Right scale shows the proven oil reserves for each year, in billions of barrels (dotted green line). DATA SOURCE: BP Statistical Review of World Energy 2011, a most fascinating Excel spreadsheet. PHOTO Spindletop Hill Gusher, 1901
When you divide the amount you have in reserves by the rate at which you are extracting the resource, you get the number of years the reserves will last at that rate of extraction. Accordingly, I include the R/P ratio in Figure 1 as “Years Left”
A couple of things to point out. First, the “Years Left”, the R/P ratio, is currently more than forty years … and has been for about a quarter century. Thirty years ago, we only had 30 years of proven oil reserves left. Estimates then said we would be running out of oil about now.
Twenty-five years ago, we had about forty years left. Ten years ago we had over forty years left. Now we have over forty-five years left. I’m sure you see the pattern here.
Second, this is only what are termed “proven reserves” (Wiki). It does not include “unproven reserves”, much of which is in the form of unconventional oils such as shale oil and oil sands. Even discounting the unproven reserves, while the rate of production has increased, the proven reserves have also increased at about the same rate. So the R/P ratio, the years left at the current rate of production, has stayed over forty years for almost a quarter century..
Now, at some point this party has to slow down, nothing goes on forever … but the data shows we certainly don’t need to hurry to replace oil with solar energy or rainbow energy or wind energy in the next few decades. We have plenty of time for the market to indicate the replacement.
Don’t get me wrong. I’d love to find a better energy source than oil. In fact, the huge new sources of shale gas will substitute in many areas for things like heating oil, and will burn cleaner in the bargain. And I do think we’ll find new sources of energy, humans are endlessly inventive.
I’m just registering my protest against the meme of “OMG we’re running out of oil we must change energy sources right now tomorrow!!”. It is simply not true. We have plenty of time. We have decades. We don’t have to blow billions of dollars of our money subsidizing solar and wind and biofuels. The world has enough oil to last for a long while, plenty long enough for the market to determine whatever the next energy source might be.
w.
NOTE: Oil figures, particularly reserves, are estimates. Oil companies are notoriously close-mouthed about their finds and the extent of their holdings. The advantage of the BP figures is that they are a single coherent time series. Other data gives somewhat different results. As far as I know the increase in proven reserves despite increasing production is common to all estimates.
RE: Main Article
“I’m just registering my protest against the meme of “OMG we’re running out of oil we must change energy sources right now tomorrow!!”. It is simply not true. We have plenty of time. We have decades. We don’t have to blow billions of dollars of our money subsidizing solar and wind and biofuels. The world has enough oil to last for a long while, plenty long enough for the market to determine whatever the next energy source might be.”
We may have decades, but I seriously doubt centuries. I believe this is a warning that we should be looking for a practical, sustainable replacement for carbon power such as inexhaustible thorium nuclear power. If the world decides that only ‘renewable’ power based on energy from the sun is politically acceptable, then you might expect to see the formation of something like a United Nations Intergovernmental Panel on Population Control with super-governmental authority to manage a planned global population regression back to pre-carbon era levels.
I see little reason to expect a world limited to traditional ‘renewables’ would support a population and general lifestyle (horse and bicycle) much more advanced than in 1880, and I suspect that many of the current advanced ‘renewable’ energy projects would not be practical in a world devoid of abundant carbon power.
Andrew 30 says:
“Do you know what the phrase ’5 fold’, means?
Take a piece of paper (thickness of 1), fold it five times, you have a thickness of 32, ‘five fold’ is a 32 times increase.”
I don’t think that’s correct. From my handy online dictionary:
-fold
suffix forming adjectives and adverbs from cardinal numbers:
1 in an amount multiplied by : threefold.
So 5-fold would mean five times greater. At least that’s how I’ve always understood it.
Notwithstanding the ‘input of energy’ from some unspecified source (including, but not limited to, certain feedstocks, required ‘nutrients’ etc for this/these ‘processes’) huh …
Can I say “Forthcoming Bubble”?
.
And I don’t suppose the Exxons and BP haven’t done these kinds of calculations but the ‘junior wakefields’ and PkOilers have? /sarc to the max …
Interesting post BTW.
.
The whole Hubbert thing… is massively overrated as well. It’s not the testament to geologic peakoil that peakers like to believe.
Hubbert was able to predict 1970 US peakoil because by the early 1950s it was clear to anyone savvy with the oil industy that easier oil had been found in Arabia. The US didn’t geologically peak. It peaked because industry abandoned it.
The US 1970 peak is more a testament to easier cheaper oil than to harder oil due to geological constraint.
( but don’t tell peakers this, they won’t have it )
This kind of thing has happened serveral thousand times over in the mining \ extraction industries world wide. A cheaper source is found, the old source is abandoned. Where I live, North UK, used to be a world centre for coal mining. None of it now. Because of North UK geologic peak coal ? No. It’s cheaper and easier from abroad.
That peakers have enshrined Hubbert’s trivial con-trick prediction as one of 10 commandments of peak_Oil_is_Now, pretty much sums them up – People who love hysteria rather than seeing the mundane truth.
I was reading Oil and Gas Journal (October 3rd)on all the new liquids plays coming out of the continued advances in horizontal drilling and multi-stage fracs. An interesting statistic was cited:
“Goldman Sachs economists in an Aug. 8 8 note forecast US oil production, which includes natural gas liquids, at 8.06 million b/d for 2011, and 10.27 for 2017”
I looked up what our historical production of crude plus NGL has been and found a nice graph from 2007 by the great French pessimist Jean Laherrere.
http://www.aspousa.org/index.php/peak-oil-reference/peak-oil…
He shows a nice steady decline from a peak of just over 11 million a day in about 1970, projecting to something around 5 million by 2017.
A sharp reversal of the decline has already occurred. Absent a major price drop, I would not be surprised to see domestic liquids production reach a new peak.
People like JRWakefield are just defending preconceived notions. To quote John Maynard Keynes:
“When the facts change, I change my mind. What do you do, Sir?”
After I left the oil industry because the price of oil crashed, I went into the semiconductor industry. At that time the tale was we cannot make a microprocessor bigger than xxxxx bipolar transistors because it will burn up. Then MOS happened, the new tale became we cannot make a microprocessor bigger than xxxxxx because it will burn up. Then CMOS happened and the new tale became xxxxxxxx. Then the new tale became we cannot make the lines less than 1 micron. Now we are producing microprocessors that have 32 nM lines, have xxxxxxxxx transistors and are not burning up. The microprocessor parts that are not being used are not turned on until they are needed, enabling even higher comlexity. There are allways those that see a small bump on the road ahead and like to predict doom and gloom and predict it cannot be climbed. The doom and gloom mind set would also predict that a creature with no fur, small teeth with a small jaw, no claws, and little strength, would not make it in the jungle if they did not know ahead of time what the species was.
I am seeing new semiconductor products that are going to go into energy management that will significantly reduce our comsumtion by managing it. Equipment that is not turned on until needed, lights that are off until needed and then turned off again. Water heated at the point of use, eliminating a separate hot water system and all of the associated hardware. Even though the individual heaters are less efficient in the overall scheme of things in a large building they produce big cost and energy savings. I am seeing new LED technology with variable color temperature that consume 80% less than conventional lighting. Automotive engine controllers that allow engines to skip firing cycles without causing problems (Diesel and gasoline). The list goes on. It will take time for the energy saving equipment to seep into our infrastucture, but as time goes on, I suspect it will put a serious dent on our energy consumtion.
As measured in: Dollars or equiv weight in Ag or Au?
(Beware the paper fiat ‘currency’)
.
Fortunately, ‘junior’ wakefield is easily identifiable and nearly as irritating as an incessant OWS (Occupy Wall Street) drummer to boot …
.
JRWakefield: “Read up on the Oil Window.”
Oil has been found deeper than the supposed “oil window” at temperatures of over 400 degrees Fahrenheit (Gulf of Mexico and off the coast of Brazil). The “oil window” stated that oil can’t exist at temperatures above 270 degrees Fahrenheit.
The “oil window” hypothesis has been falsified by observation & measurement in the field.
For those interested in the evidence for Abiotic Oil, here is a link that presents many scientific papers supporting Abiotic Oil and newspaper and other literature and commentary and discussion.
http://www.thunderbolts.info/forum/phpBB3/viewtopic.php?f=4&t=2150
@ur momisugly meemoe_uk
so you can back this up with data correct? oops no you can’t
care to explain the rig count and drilling activity in the US from the late 60’s onward?
Stephen Harris says:
December 14, 2011 at 9:40 am
Well, let’s just fact check that a bit. Here’s the data from the BP Statistical Review …
So lets see. US oil production did peak, but it was in 1970, not 1971, and it peaked at 11.3 mbd (million barrels per day), not 9.1 mbd.
It hasn’t been in decline “ever since”. It declined for a while, then increased and peaked again in 1985, at 10.6 mbd. It hit the lowest point in 2008, but that was at 6.7 mbd, not 4.2 mbd as you claim.
Finally, US oil production increased by 12% from 2008 to 2010, and in the most recent year was 7.5 mbd …
So other than everything you claimed being incorrect, the rest of your statement was good.
w.
@ur momisugly Doug
“domestic liquids” isn’t crude oil, it is everything including ethanol
actual crude oil + condensates rising to 9 million plus barrels per day or basically almost doubling isn’t gonna happen and that can be checked by using current data plus projects underway and upcoming
M. Dacey says:
December 14, 2011 at 9:41 am
Proven reserves are “proven” because they are extractable with current technology. Your claim that they may not ever be accessible is not true. You are confusing them with unproven reserves.
In addition, the fact that the amount of proven reserves continues to increase indicates that we are in fact accessing those reserves … so again, your claim is incorrect.
w.
@ur momisugly willis
depends on which stat you use, crude plus condensates or gross crude with refinery gains or “all liquids” as it is now known
and as you can see from your graph oil production has experienced brief upward bumps on its long decline downward
Crude oil plus NGL is a better measure of what we are producing. Some gas condensate can go right into the gas tank of a car and it runs. It is great for blending with heavy stuff such as the oil sands oil for refining. We’ll see big gains in NGL in the next few years as the Eagle Ford, the Utica, and other wet gas plays develop. Just compare oranges to oranges.
Dave Springer says:
December 14, 2011 at 10:29 am
Cite? I’ve never seen reports of any algae-based fuels coming in at $30 per barrel. I’ve also never seen reports of 20,000 gallons of fuel/acre/year.
I suspect you’re talking about this system:
Note that all we have so far from Joule Unlimited is … well, the same thin we have from you. Unsupported claims.
The company claims it can do this for $30 a barrel … and you report that it already has been done.
The company claims it can produce 15,000 gallons/acre/year … and you report that not only has it been done, it’s 20,000 gallons per year.
I’m not the only one doubting Joule Unlimited’s claim.
So while it is possible that Joule Unlimited may be able to deliver on their claims, your idea that they already done so is a joke. They may win, but they may also do a Solyndra. To date, your claims are not supported by ugly reality.
Nice try, though. You likely could have convinced some folks that you were actually telling the truth.
w.
@willis
No actually proven reserves are always suspect especially in nations that refuse to release their data like Saudi Arabia. Some nations are pretty honest and transparent while others are not. Even in the more honest nations they can swing pretty wildly up or down.
Shortly after OPEC was formed and they set their quotas which were reserves based almost all the middle east OPEC nations doubled their reserves at the stroke of a pen, Saudi Arabia did it after the others did and have since reported their reserves have remained static at roughly 264-265Gb ever since !! Kuwait however a few years ago publicly admitted this and it was a scam. All this is part of the oil history, even wikipedia shows it. Ever since that time we really have no real idea how much oil they have except by subtracting what they have produced and sold from the initial surveys done which for some of these nations goes back 40 years.
The problem with all algae/cyano/etc fuels….is that they can’t be grown in open cultures….
…..they get contaminated
jrwakefield said:
“No, the entire Gulf of Mexico is continental shelf. ” & “The Tupi field off Bazil is also on continental shelf…”
You obviously do not have a clue. By definition, continental shelf water is defined as *less than* 500ft. The Gulf of Mexico has a broad valley running SW to NE 300 mi long x around 200 mi wide with an average depth of around 10,000ft & a max depth if 14,000ft. That is *not* a continental shelf, that is classified as deep water. Guess what the average depth of the Atlantic Ocean is…10,000ft.
The Tiber Oil field which is in 4,000ft water off Houston, Tx., was tapped at…wait for it…35,000ft (!!!) down (by the Deepwater Horizon platform BTW). Since the deep ocean bottom is, an average, around 10,000ft and you imply there is no oil below the ocean floor because…”There are NO FIELDS off continental shelves. Being below the ocean floor does not mean below oceanic basalt, which is what the ocean floor is beyond shelves.” Do tell, is 30,000ft below the ocean floor level above or below the “oceanic basalt”?
The Tupi oil field off South America is in 6,000ft of water so it too is not on a continental shelf but is 3,000ft from the deep ocean floor and the well is another 16,000ft below that.
Since it has been *proved* there are oil fields beyond the continental shelves AND I would guess that 30,000ft below the seabed would either be below or right in “oceanic basalt” AND I, for the life of me, can’t figure out how all those dinosaurs were able to get together & dig 35,000ft down below the surface & huddle together to make an estimated 4-8 BILLION barrels of oil…that, to me, is pretty strong evidence of abiotic oil.
And with that, I call game, set & match…and I’ll quit feeding the troll now.
Have a GREAT day!!
Jeff
@ur momisugly Doug
well if you want to go that route then you have to wipe out an awful lot of previous data as well as ignore the economic effects which are quite important
unless of course the argument is going to be turned into peak liquid fuels and not peak crude oil
refinery gains also often get double counted which doesn’t help the situation
reaching for other liquids or synthetic liquid fuels like syncrude from the tar sands is also one of the symptoms or inevitable parts of the game even though it isn’t crude oil, it’s closer to coal than crude oil yet many call it crude oil in the total liquid count anyway
you can see the same sort of thing playing out in the coal industry too, the high quality anthracite peaked here in the US a long time ago and was replaced by bituminous mostly yet despite the added volume of annual production since then the actual total heat content produced annually has dropped
All these sources of energy while relatively interchangeable or fungible they are not the same especially economically. Ultimately it comes down to total energy out versus energy used to produce it, net energy. That ratio has been steadily dropping for decades. It takes a lot more volume of a crappy fuel source to replace a good one and light sweet crude in our world is at the top of the fuel food chain and it is getting more and more scarce.
Peak Oil??
They found oil on Pike’s Peak???
Sorry – I did not scan the entire thread – so many comments were right on? I have to comment on this post:
“A question one might ask themselves. If there is all that oil in the world, why are oil prices so high? ”
There are so many ways to respond – I’ll try a few:
– Adam Smith was right.
– If the price were higher, there would even be more reserves.
– Conversely, if the price were lower there would be fewer reserves.
– Bottom line – as somebody already posted – we will never run out of oil. We may eventually run out of oil at today’s price.
@TomL says:
December 14, 2011 at 5:52 am
“…Abiogenic oil makes CAGW look like well established science. It doesn’t just require making a lot of assumptions about things we don’t know, it requires ignoring everything we do know about stable isotope geochemistry, organic geochemistry of source rocks, thermal history of oil and gas, and actual distribution of carbon in the earth’s mantle….”
Bless you. This whole discussion above makes most conspiracy theories look dull. I cannot believe the lack of economic and other knowledge being displayed.
@JeffK says:
December 14, 2011 at 6:42 pm
“…Since it has been *proved* there are oil fields beyond the continental shelves AND I would guess that 30,000ft below the seabed would either be below or right in “oceanic basalt” AND I, for the life of me, can’t figure out how all those dinosaurs were able to get together & dig 35,000ft down below the surface & huddle together to make an estimated 4-8 BILLION barrels of oil…that, to me, is pretty strong evidence of abiotic oil….”
N0t in the least. These deposits off Brazil (and in the deeps of the Gulf of Mexico) are formed in sedimentary deposits laid down in rift basins. Look at a globe. See how South America and Africa look like they almost fit together. Well guess what, they did. The splitting apart formed something like the current East African Rift, filled over millions of years with detritus, then ocean water, then great deposits of salt, and so on. Today we are beginning to explore the half of the old rift on the SA side of the ocean. There’s a mirror-image on the African side, yet to be explored. Come to think of it, once NA, Africa and Europe were joined and split in the same fashion. Maybe there’s another mirrored rift sequence in the North Atlantic to be explored. Wait, it has been to some extent: Mobil/Chevron off Nova Scotia (forget the field name; big though).