World has tapped just 18 percent of global oil supplies

[theski]

Interesting take.. Crosses fingers..

VIENNA, Austria - The world has tapped only 18 percent of the total global supply of crude, a leading Saudi oil executive said Wednesday, challenging the notion that supplies are petering out.

Abdallah S. Jum’ah, president and CEO of the state-owned Saudi Arabian Oil Co., known better as Aramco,said the world has the potential of 4.5 trillion barrels in reserves - enough to power the globe at current levels of consumption for another 140 years.

Jum’ah challenged oil ministers and petroleum executives at an OPEC conference in Vienna to step up exploration “and leave the minimum amount of oil in the ground.”

“The world has only consumed about 18 percent of its conventional potential,” Jum’ah said, contending that should lay to rest fears that the world is in danger of being tapped out within a few decades.

Many experts estimate that the planet’s recoverable oil resource is at least 3 trillion barrels and potentially more than 4 trillion barrels. If global consumption rises about 2 percent a year from today’s levels of about 85 million barrels a day, they say, the low end of that range would only be enough to last until roughly 2070.

Rex W. Tillerson, the chairman of Exxon Mobil Corp., said world demand for oil will increase by 50 percent in the next decade.

“When nations threaten to stop this flow, it stops economic progress worldwide,” Tillerson said.

Industry leaders have gathered this week to take stock of new challenges at the conference sponsored by the Organization of Petroleum Exporting Countries.

Earlier this week, the 11-nation cartel agreed to leave its current production target of 28 million barrels a day unchanged, but made clear it would keep close tabs on falling oil prices and consider a possible cut in its output quota before the end of the year.

Crude prices have tumbled to five-month lows and have dropped by more than $12 a barrel since hitting record highs in mid-July. Analysts say a combination of ample supplies and an easing of political tensions such as the cessation of hostilities in Lebanon and progress in talks on Iran’s suspect nuclear program have driven prices lower.

“When prices are high, passions can run high,” Tillerson said. “Economic nationalism may gain in popularity” at the expense of developing global markets and the world economy, he said.

“The new era we face, like all of the previous ones, is not an era of easy oil - nor will it be an era of easy answers. But it can be an era of continued economic advancement,” he said.

Jum’ah challenged explorationists to find enough new oil resources to add 1 trillion barrels to world reserves over the next 25 years, saying new technology and higher recovery rates would make it possible to hit that target.

Already, he noted, drilling is now going on as deep as 10,000 feet below the Gulf of Mexico and 7,000 to 8,000 feet elsewhere. Experts say a newly discovered petroleum pool beneath the Gulf of Mexico eventually could yield anywhere from 3 billion to 15 billion barrels.

BH

[J]

Uh-huh, sure, I'll believe it when they find it. The last find of a major oil field was 30 years ago (Cantarell in Mexico) and that one's peaked and in decline. The claimed find in the deep waters of the GOM is now clarified to 3-15 billion of possible oil and oil equivalents.

And let's not forget this claim is being made by the Saudis, yes, the ones who inflated their oil reserves from ~100 billion barrels in the early 70's to over 260 billion now, all this despite never having found a single significant oil field and pumping out anywhere from 2-3.5 billion barrels from the ground every year.

It comes down to people pulling numbers out of thin air based on computer models. There's 100 billion barrels under Greenland, 300 billion in the Caspian Sea, a trillion or so in Siberia, and hundreds of billions under the Arctic ice cap. But they exist in computer models only, no one has actually drilled to see if there's a single drop of oil. Models only tell you about rock formations, not what's in the rocks. They don't distinguish between oil or water, for all we know those "trillions of barrels" are just aquifers.

I'll take this with a huge truckload of salt.

[theski]

Uh-huh, sure, I'll believe it when they find it. The last find of a major oil field was 30 years ago (Cantarell in Mexico) and that one's peaked and in decline. The claimed find in the deep waters of the GOM is now clarified to 3-15 billion of possible oil and oil equivalents.

And let's not forget this claim is being made by the Saudis, yes, the ones who inflated their oil reserves from ~100 billion barrels in the early 70's to over 260 billion now, all this despite never having found a single significant oil field and pumping out anywhere from 2-3.5 billion barrels from the ground every year.

It comes down to people pulling numbers out of thin air based on computer models. There's 100 billion barrels under Greenland, 300 billion in the Caspian Sea, a trillion or so in Siberia, and hundreds of billions under the Arctic ice cap. But they exist in computer models only, no one has actually drilled to see if there's a single drop of oil. Models only tell you about rock formations, not what's in the rocks. They don't distinguish between oil or water, for all we know those "trillions of barrels" are just aquifers.

I'll take this with a huge truckload of salt.

I knew I could find you here.

I think they are basing some of the predictions on Future tech ..

[K. A. Pital]

A big oil producer says that everything is dandy with oil. Should I really believe him?

[theski]

A big oil producer says that everything is dandy with oil. Should I really believe him?

Only if they decide to open thier books to the public..

[J]

A big oil producer says that everything is dandy with oil. Should I really believe him?

Of course you should! Have you no faith in the Saudis' claimed abilities to pump 15-20 million barrels a day for the next 50 years?

Oil has been an interest of mine ever since I wrote my undergrad thesis on oil and its effects on international politics, facinating subject by the way. By far the best & most detailed source of information on the Saudi oil fields is the book Twilight in the Desert by Matthew R. Simmons, who was a former energy advisor for George Bush. The book is a little dry at times but the technical information it presents is second only to the primary sources available to the Society of Petroleum Engineers.

[Ted C]

Supposedly, the US actually has huge oil reserves in the form of oil shale, but extracting the oil is so difficult and expensive that it only becomes cost effective in a $75+ per barrel oil market. Last time we toyed with it was during the Energy Crisis of the 70's (due to the Arab Oil Embargo), but some companies are bringing it up again.

Of course, I've also heard the breakfast cereal has higher energy density than oil shale...

[SirNitram]

Like it or not, we're getting closer and closer to the bottom of natural oil fields. Mind you, this won't be the end of the world; end of cheap oil, end of easy industralization, and the beginning of mass attempts of many countries to go nuke power.. But there's still hope for synoil, IMHO, for the simple reason that we know how oil is made, and we produce no end of waste carbon.

[Rocker5150]

Did anybody see the peak oil program the other day on (I think) the Science channel? It focused only on transportation, but did a decent job of describing the situation. I've never noticed any broadcast show about peak before; it was nice to see one come out. I bet there will be more and more such documentaries in the future....

One big problem seems to be that nobody really knows just how much is left. The Saudi claim of 4.5 trillion barrels seems way optimistic. I sure hope they are right, but it seems to go against most other studies.


It has been estimated that there was initially a total of 2-2.3 trillion barrels of crude oil on Earth, and we have used 45-70% of that total. In 2006, BP relesed a 'Statistical Review of World Energy' and said that between 1965 and 2005, approximately 917,558,609,280 barrels of oil were produced throughout the world. The USGS estimates the remaining oil in the Earth at about 1 trillion barrels, and determined that the known reserves will be exhausted within fifty years.

-http://en.wikipedia.org/wiki/Oil_reserves


"Worldwide resources of oil shale comprise an estimated 2.6 trillion barrels, of which two trillion are located within the United States. The richest deposits, 1.5 trillion bbl with high concentrations of kerogen, lie in Colorado, Utah, and Wyoming. An additional 16 billion barrels of rich but physically different oil shale is found in Kentucky, Indiana, and Ohio. A recent estimate is that, from the Green River deposits, 130 billion barrels of oil may be produced."

-Hirsch Report, Febuary 2005

http://en.wikipedia.org/wiki/Hirsch_report


I think the most startling conclusions of the Hirsch Report are the three scenarios they considered:

- Action is not initiated until peaking occurs
- Action is initiated 10 years before peak
- Action is initiated 20 years before peak


- Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.

-Initiating a mitigation crash program 10 years before world oil peaking helps considerably but still leaves a liquid fuels shortfall roughly a decade after the time that oil would have peaked.

- Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period.


The most optimistic estimates (besides this new Saudi claim and an oil exec or two) put peak oil at around 20-30 years from now, but many seem to think it will be much earlier than that- maybe 2010ish....right around the corner. Since we usually wait until the house is falling down before we shore it up, I fear we will blow, or already have blown, our opportunity at a graceful transition.


-Kevin

[Stark]

I don't know much about the oil situation, but 'peak oil' is responsible for some ridiculous misinformation even in universities. Some of my friends who are studying are told, by their professors as part of their course, inane things like 'zomg teh petrol will cost AU$10 a liter in two years' and 'collapse of civilization' and crap. I mean, what the fuck? How can you say that to a lecture hall full of paying customers without getting sacked?

[J]

The general consensus among geologists is there's roughly a trillion barrels of oil left which we can pump from the ground, there's actually several times that amount in the Earth but for various reasons we can only extract a certain percentage of it. For highly porous sandy reservoirs such as the ones in Texas we can expect an 80% extraction rate for the original oil in place, for the carbonate rock reservoirs in the Mid East it's only about 30%, and some marginal fields only yield a measly 10% or even less.

I don't know much about the oil situation, but 'peak oil' is responsible for some ridiculous misinformation even in universities. Some of my friends who are studying are told, by their professors as part of their course, inane things like 'zomg teh petrol will cost AU$10 a liter in two years' and 'collapse of civilization' and crap. I mean, what the fuck? How can you say that to a lecture hall full of paying customers without getting sacked?

Unfortunately peak oil tends to attract loony Green Peace types, the end of oil fits with their agenda and they're not above inflating claims and making outright falsifications. They use the peak oil theory (with some or lots of embellishment) to pedal their propaganda.

[Straha]

I don't know much about the oil situation, but 'peak oil' is responsible for some ridiculous misinformation even in universities. Some of my friends who are studying are told, by their professors as part of their course, inane things like 'zomg teh petrol will cost AU$10 a liter in two years' and 'collapse of civilization' and crap. I mean, what the fuck? How can you say that to a lecture hall full of paying customers without getting sacked?

Not to mention they've been saying that we've been on our last ten years of oil since... oh.... 1890?

[Stark]

Yeah. The fucking 'peak oil' buzzword is such a crock of shit: people throwing it around just say 'lolz peak oil, end of the world' with no damn idea what it means. They saw a graph once!

[Havok]

I also am fairly unaware of the facts of this topic. Could someone please explain to me what the benefits of the Saudis saying that there is enough oil for the next 140 years is. Wouldn't it be better for thier buisness to say we are running out so they can jack up the prices? I guess they do that already though...

[Stark]

If they say they're running out, people will invest in different sources of oil/energy. It's best for them to keep everyone THINKING they're conducting some titanic effort to keep output where it is, but that they can keep it up indefinately. This makes them 'indispensable'.

[K. A. Pital]

It's best for them to keep everyone THINKING they're conducting some titanic effort to keep output where it is, but that they can keep it up indefinately

Essentially, that's the key strategy of modern big oil. Make everyone think that wasting huge money on you is a fact of nature that cannot be changed, but keep reassuring them that nothing will happen as long as they waste their money on you.

[J]

Yeah. The fucking 'peak oil' buzzword is such a crock of shit: people throwing it around just say 'lolz peak oil, end of the world' with no damn idea what it means. They saw a graph once!

Sadly this is true, most people get their "knowledge" of peak oil from sources which are little better than tabloid junk, there are so many lies and misconceptions surrounding the theory of peak oil that few really know what it means.

Peak oil as defined by M. King Hubbert states that the production peak will occur when half the available oil, give or take a small percentage has been pumped from the ground. Calculating it all requires a bunch of calculus and information on production and estimated reserves, and it works, Hubbert predicted the peak of US oil production 14 years before it happened. It also worked for Canadian oil production, but his prediction for world production was thrown off a few years by production cutbacks during the Arab oil embargo, the Iran Iraq war, and Gulf War II. However with all that complex calculus it's no wonder that many don't understand the theory, how it works, and what it means.

Moving forward a few decades brings us a simplified method from Kenneth S. Deffeyes, a colleague of Hubbert's at Shell Oil way back when. He noted that the oil production curve of a nation and by extension the world is almost the same as the oil discovery curve, it's just offset to the future by a few decades. Find the discovery curve and the peak point on it, then look up data for the production curve, match up the points to find the offset and this allows the peak production year to be predicted. This works out to late 2005, he arbitrarily put the date to Thanksgiving, noting that it's a very appropriate day for giving thanks to the gift of oil. Who said scientists don't have a sense of humor?

[Mlenk]

Abdallah S. Jum’ah, president and CEO of the state-owned Saudi Arabian Oil Co., known better as Aramco,said the world has the potential of 4.5 trillion barrels in reserves - enough to power the globe at current levels of consumption for another 140 years.

Note the phrase, "current levels of consumption". What about when China and India, with combined population levels of almost 3 billion, become fully modern, industrialized nations? How long will oil supplies last when all those billions in China and India start consuming oil at the same rate that your average person in the West and Japan does? Not to mention smaller countries like Brazil, Mexico and other increasingly industrializing nations.

[Mlenk]

Abdallah S. Jum’ah, president and CEO of the state-owned Saudi Arabian Oil Co., known better as Aramco,said the world has the potential of 4.5 trillion barrels in reserves - enough to power the globe at current levels of consumption for another 140 years.

Note the phrase, "current levels of consumption". What about when China and India, with combined population levels of almost 3 billion, become fully modern, industrialized nations? How long will oil supplies last when all those billions in China and India start consuming oil at the same rate that your average person in the West and Japan does? Not to mention the ASEAN bloc (which has a combined population of over 550 million) and countries like Brazil, Mexico and other increasingly industrializing nations.

[Rocker5150]

Barrels of Oil Used Per Person/Year:

United States 25.0
Japan 14.0
Spain 13.8
Mexico 6.0
Brazil 3.5
China 1.5
India 0.8


I've read that if China and India were to use as much as the U.S. does, world production would have to triple. How long could that, plus the future demands of everyone else, last? Can realistic production levels even meet those needs?


-Kevin

[defanatic]

Oh no. Someone might have to find some other form of fuel that isn't solar (because it's not sunny all the time), wind (because it's not windy all the time), tidal (because we're not all near the sea), or nuclear (because... Well, I don't know. Something about hippies, perhaps?).

[J]

I've read that if China and India were to use as much as the U.S. does, world production would have to triple. How long could that, plus the future demands of everyone else, last? Can realistic production levels even meet those needs?


-Kevin

Right now we're very close to if not at peak production levels, with aggressive drilling and production methods we can squeeze another 5-10 million barrels a day from the ground but it will not be sustainable and will cause permanent damage to the oil fields which will reduce the amount of ultimately recoverable oil. Current production is a bit over 80 million barrels a day, so you're looking at pretty small gains.


But let's assume the optimists are right, and there really are 4 trillion barrels of black gold for us to milk from the ground. Let's make things even easier and say it's all concentrated in supergiant fields averaging about 50 billion barrels each. And let's say they're all top notch fields like Ghawar in Saudi Arabia which can produce at high rates. So that's about 80 of the finest oil fields which we've ever found, each them a bit under half the size of Ghawar.

Ghawar, by far the largest and most prolific field ever found produces about 4.5 million barrels a day, since these hypothetical fields are a bit under half the size we'll give them 2 million a day. 80 fields, 2 million barrels, that makes 160 million per day, add to the current 80 and that's about 240 million a day, about three times current production.

So if everything goes absolutely right in our hypothetical world we can meet demand, in theory. I don't think I have to say that it's not going to happen in the real world. Ideal reservoirs like Ghawar are extremely rare, in fact there's only three oil fields in the entire world which produce over a million barrels a day, Ghawar, Burgan (Kuwait), and Cantarell (Mexico). That's it. Countless thousands of oil fields and there's exactly three, fractions of a percent. Even if we go back decades the picture doesn't change much, Samotlor (USSR), Da Qing (China), Safaniya (Saudi Arabia), Prudhoe Bay (US) get added to the list and there's a few others I can't think of off the top of my head. IIRC there's only a dozen or so fields which have ever produced over a million barrels a day for any length of time.

Even if all those trillions of barrels really did exist we'd come nowhere close to tripling production.

[SirNitram]

Oh no. Someone might have to find some other form of fuel that isn't solar (because it's not sunny all the time), wind (because it's not windy all the time), tidal (because we're not all near the sea), or nuclear (because... Well, I don't know. Something about hippies, perhaps?).

We could use the hippies as moderators!

[Marko Dash]

Even if there's only enough crude left for another 50 years, we'll probably have gotten much better at producing alternative power sources by then.

[Master of Ossus]

Right now we're very close to if not at peak production levels, with aggressive drilling and production methods we can squeeze another 5-10 million barrels a day from the ground but it will not be sustainable and will cause permanent damage to the oil fields which will reduce the amount of ultimately recoverable oil. Current production is a bit over 80 million barrels a day, so you're looking at pretty small gains.

Unless, I don't know, the price were to go up.

Even if all those trillions of barrels really did exist we'd come nowhere close to tripling production.

Your assumption is that the price would remain the same, but that is not necessary in your scenario. A rise in the real price of oil will increase production across time.