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,
You need to learn to contribute to a thread instead of making baseless suggestions. Have you looked at North Dakota production recently? Did you know that US production has been increasing recently and in 2010 this was primarily due to Shale Oil.
Google also “Vaca Muerta “Shale oil” – Repsol” – perhaps you, Sir, can learn a thing or two about Oil 101.
jrwakefield says:
December 14, 2011 at 10:35 am
If you understand flow rates how come you keep on about what’s in the ground?
—————————
I haven’t said anything about reserves, I’m talking flow rates. Despite your favorite poster boy Cantarell, flow rates worldwide are doing just fine. US flow rate is climbing. My wells have new horizontal legs and are back to the rate they did 20 years ago.
Hubbert predicted our gas flow rate would be 6 BCFD. It is actually 63 bcfd. Sorry to deal in facts
Robmax says:
December 14, 2011 at 10:37 am
With the amount of oil that is released every year through natural oil seeps around the world, it’s got to be coming from somewhere. Just in the gulf of Mexico alone, the equivalent of two EXXON Valdez sized spills are released every year by natural seeps.
An introduction to the modern petroleum science, and to the Russian-Ukrainian theory of deep, abiotic petroleum origins.
http://www.gasresources.net/Introduction.htm
———-
Not sure why this has to be stated over and over, but I will again. NOT ONE oil field can be shown to be abiotic. EVERY oil field found so far have biological source rocks.
jrwakefield,
I now see you have posted all over this thread. Chicken Little would be very proud of you!
Sorry folks but the sky is not falling and there will be Oil, Gas and Coal for hundreds and hundreds more years. Long before we run out we will have migrated to other more efficient forms of energy if Mankind’s ability to apply an deliver new technologies continues to progress. I doubt we will ever seem much in the way of meaningful use of less efficient forms such as wind, solar or tidal power. I am thinking fusion or something better.
I’m not sure you actually read the blog post. The time to “running out” has been 40 years in the future for the past quarter century. What that means is that 40 years from now we will still be 40 years away from “running out”.
PAUL SCHILIZZI says:
Don’t forget that
STONE AGE DID NOT END BECAUSE WE RAN OUT OF STONES
And the Age of Sail did not end because of lack of wind.
And the transcontinetal railway was not caused by of a lack of covered wagons.
And the New York – San Francisco telegraph was not caused by a lack of pony express riders.
Faster, more efficent, less expensive and more reliable, that is how human technologies evolve to improve standard of living, health and well being.
JKrob says:
December 14, 2011 at 10:45 am
jrwakefield said:
“There wont be oil beyond the continental shelfs, wrong geology. Oil deposits are mostly from shallow marine ecosystems. Explained in the book Oil 101.”
But there *is* oil beyond the continental shelves…they have been progressing into deeper & deeper water depths (away from the shelf) as technology improves. The BP disaster in the Gulf was in over 5000ft of water & many thousands of feet below the ocean floor. Also, that new Brazilian find in the South Atlantic is in very deep water (away from the shelf) as well.
————
No, the entire Gulf of Mexico is continental shelf. The host sediments are above the basalitic oceanic crust. The Tupi field off Bazil is also on continental shelf, just above the basaltic oceanic crust, and just below a thick layer of evaporite salt.
Please before you boast about this field or that field, check the geology first. Google works.
————–
Tell me, what does Oil 101 say is the deepest water depth oil will be found and how deep below the ocean floor is the limit to find oil…eh?
Jeff
————-
Read it and learn. 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.
TomB says:
December 14, 2011 at 10:56 am
Robber says:
December 14, 2011 at 12:57 am
Oil is a diminishing resource – 40 years is little time to wean ourselves off oil, and find alternatives.
I’m not sure you actually read the blog post. The time to “running out” has been 40 years in the future for the past quarter century. What that means is that 40 years from now we will still be 40 years away from “running out”.
————-
The 40 years is bogus. Means nothing. Oil production does not shut off the day max flow is achieved. It follows a decline curve for years. The issue is not running out of oil. We will never run out of oil. What will happen is the flow rate won’t keep up with growing demand, and there will be shortage, with price spikes that destroys the economy (recessions).
Jeremy says:
December 14, 2011 at 10:54 am
jrwakefield,
I now see you have posted all over this thread. Chicken Little would be very proud of you!
Sorry folks but the sky is not falling and there will be Oil, Gas and Coal for hundreds and hundreds more years. Long before we run out we will have migrated to other more efficient forms of energy if Mankind’s ability to apply an deliver new technologies continues to progress. I doubt we will ever seem much in the way of meaningful use of less efficient forms such as wind, solar or tidal power. I am thinking fusion or something better.
—————
Fusion is dead. There are fundemental problems. The oil drum had a good article about it a few years back. Wind will never replace any fossil fuel. In the summer its output is less than 7% capacity, and 30% of the time it produces nothing. Sun in the winter is pathetic. Tidal was tried and failed.
It has nothing to do with being chicken little. It has to do with the evidence:
This is just one report of many:
http://www.ukerc.ac.uk/support/tiki-index.php?page=Global+Oil+Depletion
jrwakefield says:
“What will happen is the flow rate won’t keep up with growing demand, and there will be shortage, with price spikes that destroys the economy (recessions).”
You have no faith in the free market. As supply gradually diminishes, costs rise and alternatives become more cost-effective. Economies are not “destroyed”. Recessions occur, but they are part of the business cycle and not due to diminishing supply. An exception was the 1973 oil embargo, when the supply was entirely disrupted overnight. But in a normal free market, the market adjusts.
The reserve stays at 40 years for decades and decades because there is no incentive to look for more oil once a company has over 40 years of reserves on the books. Finding oil is expensive, and usually fails anyway, so why spend any more money hunting for resources you won’t need for generations? The engineers may say they’ve got an interesting lead, but the financial types say “why bother?”
flow rate only has to start dropping for the economic damage to occur, running out isn’t even an issue nor is it what peak oil is about
the other factor is net energy you get from the resource which has been dropping since oil was discovered
@ur momisugly jeremy, you have nothing to back any of your assertions while others have posted data and links to back up theirs
I’d like to see this whole mess cross posted at someplace like theoildrum.com and you guys will get summarily torn apart with little effort.
kbray in california says:
December 14, 2011 at 7:38 am
—
You buy imported burgers????
Andrew30 says:
December 14, 2011 at 10:56 am
PAUL SCHILIZZI says:
Don’t forget that
STONE AGE DID NOT END BECAUSE WE RAN OUT OF STONES
And the Age of Sail did not end because of lack of wind.
And the transcontinetal railway was not caused by of a lack of covered wagons.
And the New York – San Francisco telegraph was not caused by a lack of pony express riders.
Faster, more efficent, less expensive and more reliable, that is how human technologies evolve to improve standard of living, health and well being.
———–
What alternative is there that has the same energy density, in liquid form, as oil? We keep hearing about this mythical alternative, but we never see anything close to oil. It’s going to take decades to switch over, we need to start now if some alternative exists.
Except for the Arctic, the entire planet has been searched. The big easy fields have all be found and exploited.
—
That explains why they keep finding new, big fields.
Here are some links to various reports:
Industry Peak Oil Task Force, UK:
http://peakoiltaskforce.net/wp-content/uploads/2010/02/final-report-uk-itpoes_report_the-oil-crunch_feb20101.pdf
Hirsch report prepared for the DoE: Dated 2005 but still relevant: http://www.netl.doe.gov/publications/others/pdf/Oil_Peaking_NETL.pdf
Joint Operating Environment. U.S. Military:
http://www.peakoil.net/files/JOE2010.pdf
Peak Oil Report by the German Military:
http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf
IEA World Energy Outlook 2011 Summary:
http://www.worldenergyoutlook.org/docs/weo2011/executive_summary.pdf
ASPO International. A clearing house of information:
http://www.peakoil.net/
The Oil Drum. Another clearing house of information:
http://www.theoildrum.com/
Smokey says:
December 14, 2011 at 11:11 am
jrwakefield says:
“What will happen is the flow rate won’t keep up with growing demand, and there will be shortage, with price spikes that destroys the economy (recessions).”
You have no faith in the free market. As supply gradually diminishes, costs rise and alternatives become more cost-effective. Economies are not “destroyed”. Recessions occur, but they are part of the business cycle and not due to diminishing supply. An exception was the 1973 oil embargo, when the supply was entirely disrupted overnight. But in a normal free market, the market adjusts.
————–
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/oil-price-spikes-and-recession-intertwined/article1919899/
http://www.cbsnews.com/8301-505123_162-36743203/oil-prices-and-recessions-40-years-worth/?tag=mwuser
http://www.theoildrum.com/node/8268
http://www.theoildrum.com/node/7562
http://www.theoildrum.com/node/6912
for starters.
“PCBs are even in breast milk now.”
PCBs have always been in breast milk.
“While I do not agree with fear mongering,”
Then why do you do it?
Doug says:
December 14, 2011 at 10:49 am
jrwakefield says:
December 14, 2011 at 10:35 am
If you understand flow rates how come you keep on about what’s in the ground?
—————————
I haven’t said anything about reserves, I’m talking flow rates. Despite your favorite poster boy Cantarell, flow rates worldwide are doing just fine. US flow rate is climbing. My wells have new horizontal legs and are back to the rate they did 20 years ago.
Hubbert predicted our gas flow rate would be 6 BCFD. It is actually 63 bcfd. Sorry to deal in facts
—————
US oil production:
http://www.energybulletin.net/image/uploads/27804/us-production.jpeg
thingadonta says:
December 14, 2011 at 9:08 am
—
I’ve said for years, that today’s dumps are tomorrows mines.
@ur momisugly smokey
you fail to understand the nature and relationship of money to energy
oh and the oil embargo was a mere 5% of the total market and it threw the US into turmoil forcing it to capitulate a year later
Stephen Harris says:
December 14, 2011 at 9:40 am
@Doug
U.S. oil production peaked at 9.1 mbd in 1971.
—
Isn’t that the year the EPA was founded? It isn’t a coincidence.
Yes. Can’t hide anything from you. It was a conspiracy to steal oil and pour it down the drain………….just for spite.
And so what? Does it show anything more than production dropped when demand dropped? We are in the middle of a global economic meltdown. What are conditions like on your planet?
Yes, oil does mostly form in shallow ocean deposits. However what is shallow ocean one year, can be on a mountain top, or deep ocean, a few million years later.
@ur momisugly MarkW
new big fields huh? like?
when was the last time the world found a field in excess of 100gigabarrels that had a potential flow rate once developed in the millions of barrels per day range?