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THE US Strategic Petroleum Reserve (SPR) Thread Pt. 2

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Our proven reserves keep increasing every year?

Unread postby Lore » Tue 01 Mar 2011, 13:29:59

vision-master wrote:
Lore wrote:T. Boone Pickens was on CNBC the other day and estimated that without subsidies Bakken Shale reserves would need to have oil at around $180 before it became economical to extract and refine. Which is a far cry from the touted $50 by many of the other insiders.

On top of which the extraction rates are limited by the energy and water you can put into the process. Presently we’re getting about 100 million barrels a year, or 4 days worth of US usage. Put into perspective, seven billion barrels are consumed by the U.S. every year. Total estimated reserves of the Bakken Shale, at best, is around 4.5 billion.

We're not about to drill our way out of the problem locally.


Link?


http://www.cnbc.com/id/15840232/?video= ... 355&play=1
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Re: Our proven reserves keep increasing every year?

Unread postby Adelaidewonderer » Tue 01 Mar 2011, 13:48:28

rockdoc123 wrote:
No it doesnt. If that was the case, we would have seen a huge jump in proven reserves during the price rise of 2008, and then a huge slump in proven reserves when the price fell at end of 2008.
Its a technical term not a monetary term.

Pops is exactly correct. You should do some searching on this site as I've posted the definitions and how they are applied in the industry on several threads over the past few years. And I should also point out that many companies took massive write downs on their proven and probable reserves when oil price dropped but that would have been seen in North America only amongst those companies actively looking at the non-mining heavy oil ventures which normally require a ~$75/bbl price to stimulate investment. The economic limit on proven producing reserves is a function primarily of operating costs and not finding and development costs. Hence companies would have to take write downs mainly on 2P which would require a higher price to warrant the investment needed to convert it to 1P. If memory serves me correctly it wasn't until a year later that companies were forced to report both 1P and 2P to the SEC whereas that was required by the OSC all along.
My suggestion is to look at the annual reports from a company like Nexen during that time period as their sagd projects would have been effected.


I dont see how the SEC's reserves interpretation has any relevance to the worlds interpretation of reserves, when the likes of Aramco, iran, iraq, kuwait etc etc wouldnt even know what the SEC is. Its like saying all the libyan people love Ghaddafi, because his sons say they love him.
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Re: Our proven reserves keep increasing every year?

Unread postby Pops » Tue 01 Mar 2011, 13:58:11

That's what makes the whole PO thing so mysterious and well, really, pretty well unknowable.

If it was "just" a matter of 3d pictures and calculations instead of all this messy profit motive and political intrigue and human nature crystal ball gazing stuff, some Hubbert disciple would have had it all figured out long ago.
:-D
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Re: Our proven reserves keep increasing every year?

Unread postby americandream » Tue 01 Mar 2011, 15:55:41

Pops wrote:That's what makes the whole PO thing so mysterious and well, really, pretty well unknowable.

If it was "just" a matter of 3d pictures and calculations instead of all this messy profit motive and political intrigue and human nature crystal ball gazing stuff, some Hubbert disciple would have had it all figured out long ago.
:-D


The profit motive (which appears to know no bounds when it comes to dissemination) coupled with the absence of transparent reserve audits guarantees a gradual but terminal dislocation in capital. Similar to the lack of transparency surrounding the GOM spill and the information that is now emerging of deeper long term damage to the region and beyond.

Capitalism depends on the preservation of confidence and confidence is, to a large degree, illusory and fleeting, as fleeting as the periodic bouts of market hysteria as well as the strange disconnect between reality and fiction.
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Re: Our proven reserves keep increasing every year?

Unread postby vision-master » Tue 01 Mar 2011, 16:28:33

You sound like Planted an Obama. :lol:
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Re: Our proven reserves keep increasing every year?

Unread postby rockdoc123 » Tue 01 Mar 2011, 16:47:37

I dont see how the SEC's reserves interpretation has any relevance to the worlds interpretation of reserves, when the likes of Aramco, iran, iraq, kuwait etc etc wouldnt even know what the SEC is.


Yes but they have the ability to move reserves categories (2P to 1P) easily and without the transparency or auditing required in US listed companies.
The price drop would only have affected high cost oil. If you look around where is the majority of the worlds oil? it's in the middle east where lifting costs are in the 2 to 4 dollar range. The northsea has high operating costs but the royalty tax system is such that the barrels are the most profitable in the world so no affect on producing P1 by a $40 bbl and in most of these countries 2P can be moved to 1P by relatively low investment. Once you start to consider 3P and contingent resource category upgrading you are talking about big money.

As Pops points out peak oil is a story of non-renewable resource undergoing depletion with a complicating layer of economics which is different for each country and sometimes for each province/state (eg. Argentina, Canada). It is the economic layering on that affects the size of ultimate peak as well as the length of the plateau or for that matter whether there will be a mutipeak plateau.
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Re: Our proven reserves keep increasing every year?

Unread postby Outcast_Searcher » Tue 01 Mar 2011, 16:48:46

Pops wrote:Proven reserves is a financial term. It means:

"How much oil can be delivered at a profit, at todays price, with todays technology"

At a high enough price, oil is virtually unlimited, like soylent green.


Exactly right. The key question becomes, at what price can the middle class AFFORD to BURN oil (and competing fossil fuel products generally) without (metaphorically) turning the global economy into something that REQUIRES soylent green for survival?

What is going on now in the middle east might be a blessing in disguise -- it might just SHOW us what a big sustained oil price spike does to the global economy, independent of the housing fiasco we had in 2008 which (IMO) made it impossible to accurately guage the result of the high oil price.

Maybe if it shows us that the result is BAD, we'll start actively doing more as a global community to deal with the issue sooner instead of later.

A secondary question becomes, is the human race intelligent enough to proactively deal with a big problem once it becomes obvious -- soon enough to avoid rampant destruction? (I am NOT optimistic about this answer).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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U.S. oil reserves

Unread postby astalavista_b » Tue 14 Jun 2011, 10:17:29

U.S. oil reserves did not change since 1980's. Check the statistical Statistical Review of World Energy at Bp website. Since 1980s U.S has left oil for 8-10 years. However 30 years already passed , current reserves still shows that U.S is going to have 0 barrels of oil within current production statistics at 2020. I don't think that is true. I guess U.S has enough oil reserves for at least 50 years with current oil prices above $100. Think about north Dakota, offshore reserves, production is rising day by day within the new technological improvements. Besides about 50-100 billion barrels of oil will be converted to conventional if oil prices will be at least $120-130. Thus higher oil prices will make U.S more independent from OPEC.
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Re: U.S. oil reserves

Unread postby SpockLives » Tue 14 Jun 2011, 14:49:52

Who are you! A bot? CIA plant? Oil forum troll?

It is obvious from the data that peak oil has happened, and hundreds of millions of Americans are dealing with consequences of it as we speak! The numbers you reference are obviously falsehoods, planted by the likes of TPTB to provide talking points to people like you! Be gone!
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Re: U.S. oil reserves

Unread postby ian807 » Tue 14 Jun 2011, 16:27:44

astalavista_b wrote:U.S. oil reserves did not change since 1980's. Check the statistical Statistical Review of World Energy at Bp website. Since 1980s U.S has left oil for 8-10 years. However 30 years already passed , current reserves still shows that U.S is going to have 0 barrels of oil within current production statistics at 2020. I don't think that is true. I guess U.S has enough oil reserves for at least 50 years with current oil prices above $100. Think about north Dakota, offshore reserves, production is rising day by day within the new technological improvements. Besides about 50-100 billion barrels of oil will be converted to conventional if oil prices will be at least $120-130. Thus higher oil prices will make U.S more independent from OPEC.

I think you had better check some independent sources (clue: not from a major oil company or the Saudis). A decent quantitative assessment of the world's oil use can be found here: http://en.wikipedia.org/wiki/Cubic_mile_of_oil.

Here's a quick summary.
1) The world uses 30 billion barrels of oil a year, more or less.

2) The USA uses about 8 to 9 billion barrels of that, depending on what sort of year we're having.

3) The proven reserves of conventional oil in the USA total about 21 billion barrels or about 2 and a third years at current consumption rates.

4) We might be able to double, or even triple that amount with new technologies and drilling, but not much more.

So being optimistic, we might have 6- years of energy independence based on proven reserves if the rest of the world said "No oil for you!" With conservation, Canadian tar, natural gas and some luck, we might go for 10, or even 20 years independently if we really conserved. After that, we're done with oil as an energy source, and with our current civilization. After enough people starved, we might stabilize a bit.

It might go this way in a 20 year time-frame anyway. Given the realities of politics worldwide, there'll be a lot of sudden "resource nationalism" also known as "hoarding" as countries like Russia and Saudi keep their remaining oil for their own consumption. Expect the world's oil supply to drop in large sudden steps, not because there isn't oil, but because the elites and militaries of the world will try and grab what's left while the grabbing is good.

You and I, will walk.
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Re: U.S. oil reserves

Unread postby astalavista_b » Wed 15 Jun 2011, 01:52:37

SpockLives wrote:Who are you! A bot? CIA plant? Oil forum troll?

It is obvious from the data that peak oil has happened, and hundreds of millions of Americans are dealing with consequences of it as we speak! The numbers you reference are obviously falsehoods, planted by the likes of TPTB to provide talking points to people like you! Be gone!


Blaming someone who thinks other than you as a troll, CIA plant, calm down on your chair and talk with the statistics not with the ideas at cloud. Not only hundred of Americans but also millions of people suffer with the high oil prices. I am buying gasoline by paying $10 for a gallon in my country.

If Peak oil is already happened how production of crude oil is expected to be 96m b/d at 2030. I checked the data the world oil production, except the year 2008 which is a global finance problem occurred, all years show that oil production is increasing. If you have a data showing other than this, tell us that we learn.

"Oil demand (excluding biofuels) continues to grow steadily in the New Policies Scenario, reaching
about 99 million barrels per day by 2035 – 15 mb/d up on 2009.Oil remains the dominant fuel in the primary energy mix to 2035"

http://www.worldenergyoutlook.org/docs/ ... sheets.pdf
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Re: U.S. oil reserves

Unread postby astalavista_b » Wed 15 Jun 2011, 02:14:54

ian807 wrote:3) The proven reserves of conventional oil in the USA total about 21 billion barrels or about 2 and a third years at current consumption rates.
4) We might be able to double, or even triple that amount with new technologies and drilling, but not much more.

So being optimistic, we might have 6- years of energy independence based on proven reserves if the rest of the world said "No oil for you!" With conservation, Canadian tar, natural gas and some luck, we might go for 10, or even 20 years independently if we really conserved. After that, we're done with oil as an energy source, and with our current civilization. After enough people starved, we might stabilize a bit.


I can not understand one thing that how USA oil reserves did not change since 1980s. I checked the
"statistical_review_of_world_energy_full_report_2011.xls" that historical oil reserves for USA is telling us the same amount for almost 30 years. It must be vanished for 3-4 times with the production through 1980s to 2010. If you have another data telling us the USA oil reserves since 1980s I will be appropriated to check that. Moreover giving oil reserves as conventional and unconventional is a controversial issue. How conventional reserves are estimated, according to a price 60$, 80$, what if we have a price 150$. I am thinking about the huge tar sands that Canada have, most of the sources I checked told me that that counts for at least 1 trillion barrels of oil which can be profitable to extract half of it if the oil price is above $100. Do you have a data that tells us other than this?
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Re: U.S. oil reserves

Unread postby astalavista_b » Wed 15 Jun 2011, 07:45:32

pstarr wrote:So astalavista_b, what is it called when you pump your own web site? Is that what you are doing? You haven't gotten hits yet. That's sad :cry:


Hi Pstarr, I removed the signature to make myself clear that I am behind what I said before. That's not a fake discussion for me in order to get hits to my site. I hope this will prove what I am doing right now here.
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Re: U.S. oil reserves

Unread postby Pops » Wed 15 Jun 2011, 08:50:03

Hi a_B, thanks for removing your sig link, welcome.
astalavista_b wrote:U.S. oil reserves did not change since 1980's.

You are incorrect on this, they don't look like big numbers but they are:

from BP, US reserves, thousand million bbls
'80 - 36.5
'90 - 33.8
'00 - 30.4
'10 - 30.9

Just a guess, but the increase from '00 - '10 is oil from the nonconventional sources made available with the decade long 600% increase in price, sources like deep water/pre-salt, sand, shale, wet gas, etc.

You are right though that increased price for crude makes it possible to "book" reserves that would not be reserves at a lower price. Some percentage of those "new" reserves have been known about for a long time so aren't really "new", they are just newly profitable.

And the other thing to keep in mind is most forecasters believe we are somewhere around the halfway point in extracting all the oil we'll ever get. That means we know where some of the remaining oil is (proved and probable) but there is still a lot of oil yet to be found! It is not at all inconsistent with the idea that we've 'found most and pumped half' to think we'll still find more - it has to be found somewhere so even in the US with lots of holes we'll still find more in little pools here and there and in the world we'll still find some big fields too. Although probably not as huge and easy as in the past.
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Re: U.S. oil reserves

Unread postby Pops » Wed 15 Jun 2011, 10:23:02

astalavista_b wrote:"Oil demand (excluding biofuels) continues to grow steadily in the New Policies Scenario, reaching about 99 million barrels per day by 2035 ..."

Notice on this chart by El Dudearino that the EIAs projections have been continuously downgraded over the Outies:

Image

In 2000 they predicted production would exceed 120mbd by 2020 but their latest guess is 92
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Re: U.S. oil reserves

Unread postby astalavista_b » Wed 15 Jun 2011, 17:24:13

Pops wrote:'80 - 36.5
'90 - 33.8
'00 - 30.4
'10 - 30.9
.


Hi Pops, what is actually hidden is at this period USA produced
8million( I take 8 mil barrel as an average) *365 *30 = 87,6 billion barrels cumulative total.
What we are seeing at 2010 is 30.9 billion barrels.
Then according to the 2010 result real USA oil reserves at 1980 is 87.6 + 36.5 = 124.1 billion barrels.
You can do the same calculations for 1990s, 2000s etc.
Therefore how can I believe that current oil reserves left is 30 billion.

The point you mentioned that most of the forecasters believe that half of the oil is already extracted, true or not , hard to prove that.

Even though I think that oil will remain the biggest energy source following 50 years, I do not want to use it anymore in my car. I am paying $10 for a gallon .If I have enough money to buy an electric car and find a way to charge it at my apartment, I will get rid of my gasoline sucker.
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Re: U.S. oil reserves

Unread postby astalavista_b » Wed 15 Jun 2011, 17:30:50

Pops wrote:Notice on this chart by El Dudearino that the EIAs projections have been continuously downgraded over the Outies:

Image



Ok, this data make sense that oil is losing his priority year by year.
One more thing came into my mind that higher oil prices especially the ones above $100 make some unconventional sources available to us. On the other hand some renewable sources such as wind,solar become more attractive to governments. There is a trade off in between them which makes a balance( Adam Smith's hidden hand). But the truth is oil will lose it sooner or later .
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Re: U.S. oil reserves

Unread postby Pops » Wed 15 Jun 2011, 17:45:57

astalavista_b wrote:On the other hand some renewable sources such as wind,solar become more attractive to governments. There is a trade off in between them which makes a balance( Adam Smith's hidden hand). But the truth is oil will lose it sooner or later .

Yes. Both the renewable alternatives and the more expensive "unconventional" hydrocarbons become viable when oil reaches a certain price. But - for investors to take the risk on those sources, they need some assurance that energy prices and energy demand will both stay high.
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Re: U.S. oil reserves

Unread postby ian807 » Thu 16 Jun 2011, 16:39:25

Looking at reserves alone doesn't tell you much. Counter-intuitive but true.

The way to understand oil depletion in a useful way is to graph energy return (usually called EROEI) against oil price. Look at both over time.

To pick an extreme example, Titan, Jupiter's moon, is brimming with hydrocarbons. They're useless because:

1) Their energy return after delivery would be negative.
2) The price for the hydrocarbons would be prohibitively high.

But wait! You don't have to go all the way to Jupiter to find that situation. We have it right here on Earth! In the 60s, aggregate EROEI from oil was about 100:1. 50 years later, it's about 12:1. Still not bad, but you can see where this is going.

In the 60s, cheap, low-sulfur oil close to the surface was easily available. Today, not so much. Companies aren't drilling in deep water because it's fun. It's because that's where the oil is left. Oil extraction is only going to get more difficult, and expensive. Price increases also happen with scarcity. Oil producing countries with oil will deal with scarcity by hoarding so that their elites and military can continue to function. Expect big blocks of oil to suddenly disappear from the international market and prices to increase suddenly and dramatically

Politics aside, estimates are well.... estimates. We have tar sands, oil sands, shale oil, kerogen and natural gas. Estimating how much of this stuff is economically recoverable is a bit of a black art, and the "increases" in reserve estimates are sometimes a jiggering of figures based on other estimates like the impact of new drilling and extraction technologies. As any honest reservoir engineer will tell you, however, you really don't know how much was there until after the reservoir runs dry.
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