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.
jrwakefield says:
December 14, 2011 at 6:31 am
“Please point us to one oil field that has definite abiotic origin.
Every single oil field has been traced back to the biogenic source rocks.
If abiotic oil were true, there would be oil deposits in precambrian rocks. There are none.”
I found this:
The Drilling & Development of the Oil & Gas Fields in the Dnieper-Donetsk Basin
V. A. Krayushkin, T. I. Tchebanenko, V. P. Klochko, Ye. S. Dvoryanin
Institute of Geological Sciences
O. Gonchara Street 55-B, 01054 Kiev, Ukraine
J. F. Kenney
Russian Academy of Sciences – Joint Institute of The Physics of the Earth, Moscow, Russia
Gas Resources Corporation, 11811 North Parkway, Houston, TX 77060, U.S.A.
“The specific formations and depths from which petroleum has been discovered and is now being produced are as follow: …
2.) Production from the Precambrian crystalline basement: In addition to these reservoirs in the sedimentary rock, above, the exploration drilling has discovered five reservoirs in the Precambrian crystalline basement rock complex …
laboratory analyses are described here briefly. …
3.) Bacteriological analysis of the oil and the examination for so-called “biological marker” molecules: The oil produced from the reservoirs in the crystalline basement rock of the Dnieper-Donets Basin has been examined particularly closely for the presence of either porphyrin molecules or “biological marker” molecules, the presence of which used to be misconstrued as “evidence” of a supposed biological origin for petroleum. None of the oil contains any such molecules, even at the ppm level.”
“These results, taken either individually or together, confirm the scientific conclusions that the oil and natural gas found both in the Precambrian crystalline basement and the sedimentary cover of the Northern Monoclinal Flank of the Dnieper-Donets Basin are of deep, and abiotic, origin.”
Source: http://www.gasresources.net/DDBflds2.htm
Brian H says:
December 14, 2011 at 7:11 am
To all the abiotic oil deniers: I assume you await with bated breath the first geologic explorations of Titan, to unearth (untitan?) the fossils of the alien ferns and multi-colored algae etc. that decomposed into its lakes of hydrocarbons!
Until then, ….
——-
There is no oil on Titan.
The issue missing from the chart is the cost of oil. For a sufficient price, the supply of oil is infinite. You can always synthesize it from solar energy and raw inputs. Guess who gets priced out of the market? It isn’t the advanced economies. The emerging economies get to sit on their hands while we figure it out, or do something less friendly with them. There are going to be a lot of fireworks long before we use the last drop of oil, or the last pound of phosphate, or the last of any natural resource.
Peak oil is a political construct for the time. Those opposed to use of fossil fuels argue we should stop now because we are going to run out soon anyway. Producers can use it to say the costs are increasing so they charge more. It confirms the adage that politics makes strange bedfellows.
The entire issue will disappear because it developed out of the false premise that CO2 was causing planet destroying runaway global warming. The science created to support the politics is now exposed mostly by the failed predictions (projections) and only politics is left as COP 17 in Durban showed.
Climate as a vehicle for a political agenda is failing so the attention is turning back to more emotional and classic vehicles. First is the original Malthusian claim of population outgrowing resources with the recent claim that world population topping 7 billion is seen as a peak beyond which the natural world will collapse. Second is water, an even more emotional vehicle and one at the centre of the Club of Rome list and the focus of UN dynamics in the 1970s. Proof that this issue will be a political vehicle is because they are starting to talk about “peak water”. http://www.forbes.com/sites/petergleick/2011/09/07/is-the-u-s-reaching-peak-water/
As with oil, the business world and the extreme environmentalists will ride the same vehicle.
Doug says:
December 14, 2011 at 7:17 am
Nice post Willis. As usual, there is some good info in the comments, as well as some people who are compelled to post on something about which they have little knowledge.
Oil is biotic in origin. Anyone who looks at enough geochemical data will agree, even the current Russians. Oil does occur below the Carboniferous. Most of my oil income is from the Ordovician.
The parallels to peak oil and climate change are not in that consensus is wrong on origin, they are in the fact that peak oil is built upon faulty mathematics. The esteemed Hubbert’s curve is now off by 10 fold for US gas, and well on the way to similar error bars in oil.
———-
Then you misunderstand a Hubbert curve. It’s not about what’s in the ground, it’s about flow rates. He was bang on with the US. Shale gas and oil will be short lived, have low flow rates, and have low ERoEI. Production from those locations won’t offset depletion from aging fields.
Now I understand what the O-man is doing. Reduce production to zero and we have infinite reserves! Brilliant. /sarc
Thanks Willis.
Dave Springer says:December 14, 2011 at 7:38 am
@Willis[…]So basically, Willis, you are a classic example of fiddling while Rome burns.
Lighten up Dave! It’s not like we’re not going to find any more oil, or make no breakthroughs on technology to use other energy sources.
Need new supply of energy? Just harvest methane:
http://www.independent.co.uk/environment/climate-change/shock-as-retreat-of-arctic-sea-ice-releases-deadly-greenhouse-gas-6276134.html
ferd berple says:
December 14, 2011 at 7:49 am
jrwakefield says:
December 14, 2011 at 6:31 am
If abiotic oil were true, there would be oil deposits in precambrian rocks. There are none.
This doesn’t prove oil is abiotic or biotic, only that solid rock does not hold oil or gas.
Oil and gas move upwards through rocks until they reach the surface, unless trapped by a structure underground. This happens because oil and gas are less dense than both rock and water. To accumulate, oil and gas need a porous structure with a impermeable cap. Sedimentary rocks provide this structure. Precambrian rocks do not, because they are solid rock. Thus, oil and gas are not found in precambrian rocks, because it is physically impossible.
So for example, Alberta has oil because it was at one time an ocean, and the sediments that were laid down formed reservoirs to trap the oil and gas released from deeper within the earth. The source of that oil and gas is open to question. It is hydrocarbon. Most of the carbon on earth is trapped in rocks at the bottom of the ocean. These rocks along with water are carried deep within the earth by subduction, where they are cooked under heat and pressure. It is possible that the carbon in the rocks and hydrogen in the water combine to form hydrocarbons. while the oxygen in water combines with the rocks to form oxides.
Most people assume that most of the water on earth is held by the oceans – sort of like giant swimming pools. This is not true. The oceans are simply where the water table in the earth’s crust and mantle is higher than the level of the land. We don’t know how much water is actually held by the earth and how deep it extends within the earth. The deeper you go within the earth, the higher the pressure, the higher the boiling point of water. Can super heated, super pressurized water combine with carbon bearing rocks to form hydrocarbons and oxides?
————
The abioitic process cannot produce bitumen. Read up on the Oil Window. It’s too hot down there for large hydrocarbon chains. Every oil field in Alberta has a biological source rock, deturmined by chemical markers. Not one field shows an abiotic origin.
BTW, much of the precambrian Metasedementary Belt Boundary Zone of the Grenville Province in Ontario, once marine, spaning over to Norway, has any oil in it.
For those who think shale gas and shale oil are the answer:
http://www.smartplanet.com/blog/energy-futurist/the-questionable-economics-of-shale-gas/243
Again, it comes down to flow rates and ERoEI.
Peak Oil is total BS.
We will never run out.
So far, we have been merely tapping large pools of oil that are trapped in permeable layers. This stuff has oozed out or source rocks (large shales) over tens of thousands of years.
As Oil has now reached $100+ we can now look to actual source rocks themselves and extract oil from those layers too. There are thousands more source rock layers than there are strati-graphically or structural trapped oil pools. We can also look to converting coal to liquid fuels also (by most estimates there is at least 600 years worth of coal left).
Extremely or ridiculously cheap oil is starting to become scarce that is all. This is a combination of rising demand and the extreme government restrictions (high taxes & royalties, regulations and extremely limited access to reserves) placed on Oil companies by every country. Remember that your morning cup of coffee costs far more than the equivalent in gasoline and that most of what is built into the price you pay for gasoline is government take (various forms of taxation).
Seems to me there is a larger question than how much oil we have left. What about the damage being done to our environment by using fossil fuels and living in a plastic state of mind. PCBs are even in breast milk now. While I do not agree with fear mongering, I do think we need to stop being in denial about what we are doing. We are not working towards sustainability, but rather, how much time to we have left to keep doing things in the same old way. We need innovators–movers and shakers in the energy field. We have 8 billion people on the planet to house, feed and provide water to. Sustainability is not just about the United States, although it seems impossible to glimpse our own narcissism.
Oldone: Read this article too. Perhaps there is another opinion on the basin, Sounds like some Russian authors.
Palaeozoic source rocks in the Dniepr–Donets Basin, Ukraine
Reinhard F. Sachsenhofer1,*,
Viacheslav A. Shymanovskyy2,
Achim Bechtel1,
Reinhard Gratzer1,
Brian Horsfield3 and
Doris Reischenbacher1
+ Author Affiliations
1 Department of Applied Geosciences and Geophysics, University of Leoben, Peter-Tunner-Str. 5, A-8700 Leoben, Austria
2Shell Ukraine E&P, Rylskogo Lane 6, UA-01025 Kyiv, Ukraine
3GeoForschungsZentrum Potsdam, Section 4.3, Telegrafenberg, B 424, D-14473 Potsdam, Germany
*↵ Corresponding author (e-mail: Reinhard.Sachsenhofer@unileoben.ac.at)
Abstract
ABSTRACT The Dniepr–Donets Basin (DDB) is a major petroleum province in Eastern Europe. In order to understand the regional and stratigraphic distribution of source rocks for the dominantly gas-prone petroleum system, 676 fine-grained rocks from 30 wells were analysed for bulk parameters (total organic carbon (TOC), carbonate, sulphur, RockEval). A subset of samples was selected for maceral and biomarker analysis, pyrolysis-gas chromatography and kinetic investigations. Organic-rich sediments occur in different intervals within the basin fill. Maximum TOC contents (5.0 ± 1.9%) occur in the Rudov Beds, several tens of metres thick. The oil-prone rocks (Type III–II kerogen) were deposited in basinal settings above an unconformity separating Lower and Upper Visean sections. While maximum TOC contents occur in the Rudov Beds, high TOC contents are observed in the entire Tournaisian and Visean section. However, these rocks are mainly gas condensate-prone. Highly oil-prone black shales with up to 16% TOC and hydrogen index values up to 550 mgHC g–1TOC occur in Serpukhovian intervals in the northwestern part of the DDB
We are not likely to replace oil with wind or solar regardless. We don’t USE oil to produce electricity anymore. Heating oil however, could be replaced with gas or heat pumps (electricity).
Jeremy says:
December 14, 2011 at 8:48 am
Peak Oil is total BS.
We will never run out.
So far, we have been merely tapping large pools of oil that are trapped in permeable layers. This stuff has oozed out or source rocks (large shales) over tens of thousands of years.
As Oil has now reached $100+ we can now look to actual source rocks themselves and extract oil from those layers too. There are thousands more source rock layers than there are strati-graphically or structural trapped oil pools. We can also look to converting coal to liquid fuels also (by most estimates there is at least 600 years worth of coal left).
————-
You need to read Oil 101 to understand how oil is formed and migrates from source rocks.
Steve Keohane says:
December 14, 2011 at 8:35 am
Now I understand what the O-man is doing. Reduce production to zero and we have infinite reserves! Brilliant. /sarc
Yes, the latte’ Commies love scarcity. If it’s not there, they produce it, whether wittingly, unwittingly, or half-wittedly. That’s why they never create wealth but instead only appropriate and destroy it. Scarcity is also the necessary result of Obamacare. Dr. “Zeke” Emmanuel, Rahm’s brother and a key advisor to Obama, was salivating at the prospect of redistributing healthcare as a scarce item well before Obamacare, because people like him were going to get to dole it out according to their
brilliant management skills“complete life” metric whims. While, of course, they saw no necessity to ever enter their own “complete life” values = Zero to Debit amount, into these same equations.Right, “Communism is dead, long live Communism!”
The R/P graph represents the oil sector’s supply chain best practices. It gives stability to the market place. It cannot be used to predict flows ‘cuz it assumes production falls to “zero” in the 46th year. In reality, extraction takes the form of a bell curve. This is derived by estimating demand and bottom-up flows and reconciling them with OOIP (original oil in place) of 19 trillion barrels (Tb), URR/EUR (ultimately economic recoverable resource) of 8 Tb and proved reserves of 1.256 Tb. Technology advancements and secular price increases allow more OOIP to be converted to URR & in turn some URR to proved reserves. In general, each $1/barrel increase adds 30-Gb to URR.
Should oil production seek its natural Geologic Peak (based on long-term demand trend), oil would rise to 105 Mbd in 2030. In reality, the demand growth rate has been waning in recent years and it appears the sector will face a leveling off and ultimate Demand Peak of 100 Mbd in 2029. The main forcing for a dampening of the Consumption growth rate is rising prices. The growth rate will level upon oil surpassing $213/barrel. The threshold is determined by a definitive petroleum/GDP ratio that tracks demand destruction. It was represented by $90 in 2007. Today it is $103/barrel and rises with time (and GDP).
Present resource implies of conventional and non-conv reserves will run out in five hundred years. After that point, there will be an infinite plateau of 6 Mbd BTL (renewable biofuels). Charts of URR, future prices and a depiction of the five century production profile are updated monthly by Trendlines Research: http://www.trendlines.ca/free/peakoil
We didn’t leave the stone age because we ran out of stones, and we won’t leave the fossil fuel age because we run out of fossil fuels.
By the way, Iraq had virtually no exploration whilst Sadam was in power-why would you-when you would have to fix social issues, rather than just build another palace for yourself.
And your graphs above don’t count oil shale and tar sands, of which there is vastly more resources than conventional oil.
And for minerals its even more extensive, since minerals are produced by the earth’s crust-they are virtually inexhaustible-we will only run out of e.g. Al, Cu, Au, Mn, Ni, Fe etc etc when we run out of rocks.
A general rule of thumb is: for each 10% lower grade, we have around 3-10 times more resources of that mineral, ie for gold we have about 3 times as much at 0.9ppm Au as we do for 1.0ppm Au, and 9 times as much at 0.8ppm Au as we do at 1.0ppm Au, and so on-the increase with each lowering of grade is exponential, for this reason we will never ‘run out’ of gold, and nearly all other minerals as well (soemthing Elrich and the Club of Rome could never understand). (There is a paper on the ‘resource pyramid’ ie how the size of resources increases with each lowering of grade-by the USGS which explains and is highly recommended, yet every once in a while we hear someone (usually an academic without any minerals training) warning us that we will ‘run out’ of this mineral or that, and because they are ‘non renewable’. (Something can be non renewable, but virtually inexhaustible, and renewable but very limited (a concept the greens never mention)).
There are vast resources of copper for example at about 0.6% Cu which are not being mined now because they don’t compete with what is being mined currently at about 0.8% Cu. But when the 0.8% Cu runs out, there will be about 9 times as much available at 0.6% Cu. Hundreds of years worth, in fact, and thousands of years worth at 0.4% Cu.
The only exception to this general rule, is those minerals not produced by crustal procesees, such as fossil fuels, which are much more limited because they are organically derived, not crustally derived.
jrwakefield says:
December 14, 2011 at 8:31 am
Then you misunderstand a Hubbert curve. It’s not about what’s in the ground, it’s about flow rates.
————–
Actually I understand Hubbert’s work just fine. He is now off 10 fold on gas FLOW RATES in the US.
And please, stop setting up absurd premises such as “we need to find seven Ghawars a year”. All we need to do is keep getting a percent or two more recovery factor from all the existing fields every so often, find some giant deepwater fields, prove up a few billion in old fields like Wattenberg through new technology, apply horizontal drilling to liquid prone shales etc. That is exactly what we are doing, at economical costs and realistic energy inputs.
Dave Springer, 07:38
Absolutely correct that there is a huge infrastructure dedicated to vehicle refuelling. Why does that have to be limited to oil-based fuels?
One post has already pointed out the wide-spread use of CNG and LNG in Europe. By the way, that is also spreading to rail and shipping.
Then there are the liquid fuels produced from gas; Shell is leading the way with this. Beyond that, we have long-established technology to derive fuels from coal. And, of course, Biofuels might chip in a bit.
So the fuel infrastucture investment will serve us well for a long time yet, with or without ample supplies of oil.
Willis
You missed prices.
Prices are going UP.
Driving the economy DOWN.
Because global oil production plateaued – and is NOT keeping up with population.
Oil prices rise. US costs, OPEC sales hit records
SP Wells says:
December 14, 2011 at 8:52 am
We have 8 billion people on the planet to house, feed and provide water to. Sustainability is not just about the United States, although it seems impossible to glimpse our own narcissism.
“We” don’t have to feed 8 billion people. We have to take care of our own system of Constitutional Capitalism. Strangely, the rest of the world benefits greatly anyway and would benefit even more were it to adopt the same system, which needs to exist somewhere to begin with. Getting panicked back into a Totalitarian Stone Age instead is not a plan.
Take care of your own house first.
Doug says:
December 14, 2011 at 8:53 am
Oldone: Read this article too. Perhaps there is another opinion on the basin, Sounds like some Russian authors.
Palaeozoic source rocks in the Dniepr–Donets Basin, Ukraine
Doesn’t surprise me that there are differing viewpoints. Would be interesting to see which wells & what depths those “fine-grained rocks” were from, as well as the rest of the article.
Do you have a link to the full article that’s not behind a paywall?
All I could find was the abstract, which you posted.
Thanks
jrwakefield says:
December 14, 2011 at 6:00 am
“Cannot be sidestepped with technology”? You were doing well up to that point. But since the “EI” part of the ERoEI involves the energy invested to get the energy, it is definitely a function of extraction technology, and is not simply the “laws of thermodynamics” as you claim. If we can extract it more cheaply (in an energy sense) the ERoEI goes up, so we can sidestep it with technology …
w.
There’s an interesting book titled “Eating Fossil Fuels” by Dale Allen Pfeiffer. He explores this issue from the standpoint of how quickly we run out of oil will deterine if we gracefully adapt or all h377 breaks loose. I think it’s an interesting read for anyone on either side of the AGW debate.
I tend to agree with Willis that there is plenty of fossil fuels left for now and the natural forces of supply and demand will move us in the correct alternative directions in the future.
Knowledge of our oil situation is really frightening if many of these comments are for real.
– Abiotic oil? Wake up! It doesn’t exist.
– The amount of Shale Oil has be seriously downgraded by the USGS. It will have a short life. It’s also expensive to extract thus having a low EROI. Think bubble.
– There is a serious lack of understanding of just how dependent we are on liquid transportation fuels from oil. The world moves on oil. A massive transition to natural gas is far too expensive for one thing and NG doesn’t have the energy density or transportability as gas. A typical gas station can only store 1/10 the energy of NG as gasoline. NG cars/trucks will remain a curiosity more than a reality.
– Known oil reserves are always upgraded, never downgraded. I wonder why? Maybe it’s because saying you have a large reserve makes investment money easier to come by.
– And speaking of investments the IEA reports that the world needs to spend about $38 trillion dollars by 2035 to meet the projected demand. That’s not going to happen because 1) No one has that kind of money and 2) We’ll be on the down side slope of the oil curve by then.
– The U.S. and German Military are well versed in Peak Oil and have written reports outlining the national security problems that Peak Oil entails.
– Leaked cables from the U.S. State Dept. reveal that the Saudi’s are much closer to peaking than they let on in public. The former head of Saudi Aramco say in private they overestimated reserves by 40%. BTW, all OPEC countries overestimate so they can sell more oil because production quotas are based on reserves. In the middle 1980’s all OPEC members doubled their reserve estimates overnight. Sound fishy?
– All major non-opec producers are in terminal decline; Mexico, Alaska and the North Sea are crashing.
All this means we can expect steadily raising oil prices. The only thing that’ll bring down prices is demand destruction caused by recession. When those born today reach 30 years old they will live in a very different world than we do today.