I will be happy to give an opinion. Others may wish to comment, of course.
a. First of all, no one really knows how much oil there is, and I really mean no one. It's all underground, and we cannot see it, and even the best geologists in the world have differences of opinion about how much there is. Furthermore, even if you do know how much oil there is, there is some question as to how much can be extracted, until you actually drill the hole and see what happens. So, there is a lot of uncertainty,even among the experts.
b. In this one instance, in my opinion at least, the government and corporations actually work in your favor. The fatcat large scale investors and people who run the huge mutual funds really hate to get scammed out of money by characters like this
big strike
who make claims of X amount of billions of barrels of oil under some barren piece of land somewhere. As a result, there are a lot of pretty rigorous SEC regulations set up to do auditing, independent geological estimates of your oil fields by experts, etc. to verify that you have as much oil as you say you have. These laws were put in place by the "powers that be" to give themselves some security .
c. As a direct result of (b) above, and also tougher regulations brought about by Sarbanes Oxley legislation in the wake of the corporate mega-scandals like Enron, the corporations right now are probably the most conservative and reliable source of reserves data, because the officers of the corporation want to avoid going to jail or getting fired like the guys from Shell Oil did last year. The laws in Europe are at the very least similar if not even better than the US laws in this regard.
d. For the actual "production" numbers, I think the data right now is actually pretty good because oil needs to be refined before it can be sold, and since the big corporations are running the refineries, they at least have to be straightforward about how much they are refining, so you can figure if the world is using X amount of finished products, and there is not some big quantity of product that has been "produced" i.e. "pumped" but not refined that no one knows about, you can get a pretty good idea about what "production" is for a given time period by looking at the amount of finished products produced. This data is sent out periodically by the US-Department of Energy and the International Energy Agency. There are other links on this website to direct you to this information.
e. Where you really get into trouble is in places that do not fall under US or European legal jurisdiction, namely any "national" oil company, the middle east, Russia and China. These characters can basically claim to have as many barrels of reserves as they want, and unless they agree to it, they do not need to fall under the same auditing standards as the US corporations, so there is no telling what is happening. An excellent presentation to describe this situation, and the resulting potential problems it causes is here:
Reserves Reporting
A particularly annoying example of a country that is irresponsibly reporting reserves is Oman, who everyone knows is in depletion, but their official annual reserves estmates are constant. Saudi Arabia consistently reports the same reserves year after year, regardless of how much they "produce".
This problem affects the reserve numbers a lot more than it affects the consumption numbers, though, because people have ways of tracking crude oil tanker shipments and refinery output so even though the Saudis and others will not tell us exactly what their "production" is, people have a pretty good idea of what these guys are producing, even though they do not allow any direct auditing.
f. My favorite source of energy data, because of a-e above, is the BP Statistical Review of World Energy. Annually, in June, BP (
www.bp.com)puts out a summary of all of the reserves, production, etc. and publishes it in handy spreadsheet form so people like us can analyze it. Also, they include a lot of historical data, so as to let all of us make our graphs, etc. The information is derived from corporate and government data, and is consistent from year to year, so if they are off, they are presumably off by the same amount every year, so you can at least do consistent modeling.
g. The best source of information about unconventional energy and/or undiscovered reserves is the US Geological Survey, who, periodically, makes an estimate of all of the potential sources of petroleum products based on the presence of source rocks, seismic data, etc. They have done this for everyplace in the world that has been explored, and even made some estimates about the places that have not been explored, so it is considered "authoritative" by some. Here is the link for the 2000 report:
USGS 2000 World Energy
The annoying thing about this survey is the method they use to estimate "undiscovered reserves". Here is an example: They say that based on their computer modeling and monte-carlo simulations that there is a 95% chance that there is at least 333 gb of undiscovered hydrocarbon products in the US. By the same simulation, they say that there is a 5% chance that there is 1,107 gb in the US. The average of these two is a 50% chance there is 650 gb of hydrocarbon reserves, therefore, that's the number they assign to the US. Well, I am not personally particularly comfortable with some of this, so you have to take it with a grain of salt. They claimed that there are still nearly 5,000 gb of hydrocarbons (oil plus gas plus unconventional) still out there someplace, by this method.
h. Well, sorry to be long winded, but here you have the whole story. If you find a better source of information, please let us know. Simmons' point, which is correct, in my view, is the idea that we have based our whole society, financial and economic system, food supply, and everything else, on the unaudited word of some Saudi prince who claims he has X amount of oil in the ground and all is well. I will let you think about the ramifications of that for awhile.
Others may wish to comment.
), it seems that past 2005 we'll only have about 2.5 years (~2008) before we hit peak. i.e. we'll be trying to use more than we discovered.
