[Graeme]

This report was posted on the front page a few days ago but I think it should be posted here too.

USGS Releases Global Oil & Gas Reserve Growth Estimates

The U.S. Geological Survey has released a new global estimate for potential additions to oil and gas reserves due to reserve growth in discovered fields outside the United States. The USGS estimates that the mean undiscovered, conventional reserve additions in the world total 665 billion barrels of oil (bbo), 1,429 trillion cubic feet (tcf) of natural gas, and 16 billion barrels of natural gas liquids.

These volumes constitute a significant portion of the world’s oil and gas resources and represent an estimate of the potential future growth of current global reserve estimates over time based on better assessment methodology, new technologies and greater understanding of current reservoirs, among other advances.

Reserve growth is the increase in estimated volumes of oil and natural gas that can be recovered from existing fields and reservoirs through time. Most reserve growth results from delineation of new reservoirs, field extensions, or improved recovery techniques thereby improving efficiency, and recalculation of reserves due to changing economic and operating conditions.

usgs

[seenmostofit]

You know, the numbers being reported which OilFinder2 rounds up, and these types of estimates from oil and gas scientists, (including this recent update of the 2000 USGS work)

http://www.doi.gov/news/pressreleases/U ... ources.cfm

if you add up all the billions, suddenly you are talking about real amounts of oil.

[ralfy]

It is accepted that we've used only around a quarter of oil resources worldwide. The problem is that one report indicates that the extraction rate from NA will add 4 to 6 mb/d to production for the next two decades. Unfortunately, demand may have to go up around 2 mb/d a year to maintain economic growth.

[seenmostofit]

It is accepted that we've used only around a quarter of oil resources worldwide.

Oh, I don't think so. People have been claiming "half the oil used" and in the next breath used it to explain how peak oil has already happened.

First paragraph.

http://www.oildecline.com/

The cornucopia's have been the gang recognizing that we haven't used half the oil.

The problem is that one report indicates that the extraction rate from NA will add 4 to 6 mb/d to production for the next two decades. Unfortunately, demand may have to go up around 2 mb/d a year to maintain economic growth.

The problem is that these particular government scientists weren't talking about extraction rates, just the massive amounts of oil yet to be produced (at some unknown time and rate and price) which led back to why we certainly haven't used half the oil resources available on this planet.

[dissident]

Probability distributions of original
in-place volumes for U.S. fields were
assigned to reported original in-place vol-
umes for fields outside the United States.
Probability distributions of recovery fac-
tors for the 68 U.S. oil accumulations were
assumed for oil fields outside the United
States. A uniform probability distribution
of the mean reported recovery factor of
nonassociated gas fields outside the United
States was assumed for recovery factors
in gas fields. The original in-place and
recovery factor distributions assigned to
a given field were statistically combined
(multiplied) by Monte Carlo simulation
to provide a probability distribution of
estimated reserve growth.

Yeah, climate models are dubious but this is really solid work here. That's a mighty big assumption that the rest of the world is just like the US in terms of field development. I thing the people at the USGS forgot about the SEC rules and that oil producers in the US always lowball their reserve estimates to be on the safe side. This is not the practice around the world.

[Pops]

You stopped just short of the money line graeme

No attempt was made to estimate economically recoverable oil and gas as part of these future projections.

And then there is this part that I find really funny
"Unlike past estimates of reserve growth that relied on statistical extrapolations of growth trends, ... [this time] data acquired from U.S. fields undergoing reserve growth were used as analogs, where appropriate, for this study."

IOW, "In the past we guessed, this time we wished" haHA!


Still, what this is saying is pretty sobering, the USGS is saying there is 22 years worth (@30gb/yr) of conventional oil yet to be found - without respect to cost, merely that it is "technically extractable". If I remember, a few years ago Campbell thought there were about 200Gb yet to find – 7 years worth. ASPO's number keeps going up and USGS & EIAs keeps coming down, LOL!

Anyway, add the USGS guess to BPs proven reserve number (based on even more political PR fluffing but it's all we have) and you get 76 years of potential oil - after that all we have left is stuff that we can't afford today at $120/bbl, of course long before that we'll have not much besides tar and at a lot higher price. That isn't 76 years before a peak in production, that's 76 years before all the flowing oil is gone, all the asphalt is gone, all the sands are all clean.

Compare that to Campbell and Laherrere's number - 61 years. Not much difference.

--
I've been looking for an updated discoveries chart and found it right under my nose at Energy Bulletin:



Note that all additions are "backdated" IOW, when drillers find another little pocket of oil in an existing field or figure out how to wash/scrape/frack another little drab out of an old well, the "addition" is added to the original discovery. What that gives is a view of how reliant we are on the "provinces" discovered long ago and how few really new finds there are left.

. Edit (got my alphabet agencies confused)

[Pops]

Yeah, climate models are dubious but this is really solid work here.

Yes.

I think there is a proven tendance for the EIA and USGS to be, well, wrong:








Of course Peakers have been known to be wrong too:

[rockdoc123]

I thing the people at the USGS forgot about the SEC rules and that oil producers in the US always lowball their reserve estimates to be on the safe side. This is not the practice around the world.

They do not "low ball" reserve estimates. The rules around reporting reserves in North America and the UK are quite strict. Publically traded oil companies want to book as many reserves as possible because it has a direct impact on their share price. The categories for reserves are Proven developed, Proven undeveloped, Probable, Possible and Contingent. The SEC only allows the booking of 2P or Proven plus Probable. Generally a third party qualified reviewer must conduct an audit of those reserves and certify them. In my experience oil companies argue quite hard to get as much of the proven and probable reserves certified. In the many years I was involved in A&D activity in the oil and gas business I can't remember seeing a case where a company "low balled" its reserves, if anything they may have been a bit generous. Of course this wasn't the case prior to implementation of the reserve rules back in the nineties.

As to the rest of the world you can only be speaking to Saudi Arabia and Iran. The rest of the world is largely comprised of foreign oil companies operating concessions and most of them are publically traded and hence governed by the same rules. As an example Exxon would have the same reserves rules applied to their holdings in West Africa as their holdings in the Gulf of Mexico. Aramco claims to adhere to the SEC/AAPG/SPE guidelines for reserve reporting but of course there is no way of proving one way or the other if they do or don't.

[Graeme]

I didn't expect to see this response! While a discussion of reserve numbers is, well relevant, if one looks at the overall picture, it becomes moot. Firstly, we have been advised repeatedly by individuals and agencies to move away from oil for mainly environmental reasons. The oil is best left in the ground. Do you think oil companies will heed these warnings? Nah. Then again they may have to invest in renewables eventually because, secondly, we have seen reports in the media that grid parity is fast approaching. We'll be there in a decade or two if not locally already. This means that these reserves are unlikely to be completely depleted, which should be a relief in more ways than one to us all.

[Pops]

[Graeme]

In an ideal world, where everyone cooperates perfectly, exponential growth of renewables (esp solar) would solve our energy problems. However, in America the powerful right-wing will try to disrupt this trend and maintain the status quo. It is in this regime where a lack of oil supply (PO) could come into play.

I just saw this disturbing article about the growth of renewables in China. Again it illustrates how imperfect our world is. Surprise, surprise, China plans to use it's coal! However, on an optimistic note right at the very end, the article says that China's contribution will be "driving down the cost of renewable energy for everybody else".

[rockdoc123]

n an ideal world, where everyone cooperates perfectly, exponential growth of renewables (esp solar) would solve our energy problems. However, in America the powerful right-wing will try to disrupt this trend and maintain the status quo. It is in this regime where a lack of oil supply (PO) could come into play.

I really believe this to be an old wives tale. Oil companies, and especially the integrated ones which have the political clout to do anything like you are suggesting will make money anyway they can. BP went into solar, other companies like Exxon are looking at their options. The problem is that there isn't anything there right now on its own that could replace hydrocarbons. If they saw a way to make money, belive me, they would. I think there is a model that would incorporate gov't subsidy for successful alternatives (as opposed to the clearly pork barrel subsidies Obama passed on to his friends). It needs to be a combination of all sorts of alternatives and those alternatives need to be industry specific (i.e. trains running on electric generated from nuclear, conversion of trucking to diesel from GTL). If someone could come up with a very efficient method of storing electricity it would be helpful as well. My view is there is too much pointing at any one item in the overall chain rather than someone standing back and trying to come up with an all incomposing plan

[ralfy]

Related, and prob. reposted:

"Dirt Cheap Natural Gas Is Tearing Up The Very Industry That's Producing It"

http://www.businessinsider.com/capital- ... gas-2012-6

As mentioned in

"Shale Gas Reality Begins to Dawn"

http://theautomaticearth.com/Finance/sh ... -dawn.html

[Pops]

Now doc you gotta admit, tree huggers didn't vote for Drill Baby. LOL I kinda think some folks believe that oil wasn't mentioned in the creation story because making it is still God's daily Job One, right after punishing the US for tolerating queers.

But you are right about Oil cos, Shell was one of the biggest PV manufacturers for a while but they got out of it in favor of biofuels. Which I think points up the real challenge, transport is liquids based and we'll naturally move to a substitute liquid first.

But I guess the question of how governments respond to the problem is contained in your and Graeme's comment. Graeme says China is "driving down PV costs" – they are doing that by subsidizing their PV industry, the American response can be one of 2 things, either subsidize our PV industry, including it's missteps – the right doesn't like that idea – so the only option is to subsidize profits: give up on competing, impose a tariff and let China do the making and innovating.


--
Thanks for the link Ralfy. Exactly what I've been saying about nat. gas and fracking as a whole. The headlong rush and crowing about a glut sound like parched desert travelers descending on a camel's piddle puddle, not salvation from the problem but a sign post of the problem.

[Graeme]

n an ideal world, where everyone cooperates perfectly, exponential growth of renewables (esp solar) would solve our energy problems. However, in America the powerful right-wing will try to disrupt this trend and maintain the status quo. It is in this regime where a lack of oil supply (PO) could come into play.

I really believe this to be an old wives tale. Oil companies, and especially the integrated ones which have the political clout to do anything like you are suggesting will make money anyway they can. BP went into solar, other companies like Exxon are looking at their options. The problem is that there isn't anything there right now on its own that could replace hydrocarbons. If they saw a way to make money, belive me, they would. I think there is a model that would incorporate gov't subsidy for successful alternatives (as opposed to the clearly pork barrel subsidies Obama passed on to his friends). It needs to be a combination of all sorts of alternatives and those alternatives need to be industry specific (i.e. trains running on electric generated from nuclear, conversion of trucking to diesel from GTL). If someone could come up with a very efficient method of storing electricity it would be helpful as well. My view is there is too much pointing at any one item in the overall chain rather than someone standing back and trying to come up with an all incomposing plan

Whenever you try to defend the oil industry, I smell a rat (corruption). Of course it's not an old wives tale. Let's start with oil company investment in renewable energy. According to the NRDC, it's 50 times less than investment in hydrocarbons. The API are involved in a deceptive "energy voter" advertising campaign. The oil industryis trying to deceive the American public that it can achieve "energy independence not with reneweable energy but with fossil fuels.

First, I want to dispense with the obvious. When the oil and gas industry speaks of energy independence for America, here is what it does NOT mean. The industry is certainly not referring to expanding renewable energy sources. Nor is the industry referring to the possibility that Americans could become vastly more efficient in their energy use and thus reduce their dependence on imported energy. The industry is emphatically not suggesting that Americans curtail their use of energy in any way, for example, by driving less and bicycling more. No, none of these possible paths to energy independence are on the minds of oil and gas executives.

And there is this NYT report on the future of the oil industry in America.

My bedtime reading tonight is “Oil: The Next Revolution – The unprecedented upsurge of oil production capacity and what it means for the world.” This mind-bending report points to a prolonged period of rising oil production, particularly in the United States (for reasons laid out below), and a potential collapse in oil prices, with all kinds of implications for security, international politics, the economy and, without doubt, climate.

The report is written by Leonardo Maugeri, a top oil company executive from Italy who is currently a research fellow at the Geopolitics of Energy Project of Harvard’s Belfer Center for Science and International Affairs.

Maugeri offers a field by field analysis of investments in oil production that provides detailed support for the emerging picture of an oil boom conveyed in recent reports in The Times, including Jad Mouawad’s article “Fuel to Burn: Now What?” Similar themes echo in Daniel Yergin’s recent book “The Quest.”

After a detailed exploration of the reasons for the current increase in oil production capacity, with much more coming after 2020, Maugeri warns that the oil industry will need to work hard to limit environmental risks from greatly expanded drilling for oil (and natural gas) in shale deposits, a vast resource that has been made tappable by hydraulic fracturing, known also as fracking. The report doesn’t address the implications for climate policy and energy efficiency that would attend a prolonged era of abundant oil. I’m sure others, here and elsewhere, will dive in on that issue.

[rockdoc123]

Whenever you try to defend the oil industry, I smell a rat (corruption)

well once again, because you conveniently ignore facts when they suit you....I am retired from the oil industry. I have very few investments that are still in the oil and gas industry other than a few large independents which deliver dividends healthier than you would find in other industries, banks etc. If that changes I will change my investment strategy.
When I post about oil companies it is because I worked for a number of them (various sizes) at various levels including senior executive over the past several decades and I know what drives their strategy. IT is ROR, NPV, DPI and a host of other factors. If they could make a significantly better return from something else they would be there. Oil companies have dabbled with the alternatives, BP in solar, Shell in GTL, Sasol in GTL etc. The fact of the matter is the returns on investment just aren't' there for the alternatives. Not sure why you would expect oil companies to be altruistic and accept year on year losses just to give the world an alternate energy source. That isn't their job. That is the job of governments to fund such research and provide incentive based on success to get them over the next set of hurdles towards full commercialization. In your world I'm sure the failure of electric car companies and other "green" companies such as Solyndra was all to do with some oil industry conspiracy rather than the fact their management was incompetent and they couldn't put together a competitive industry.

As to the environmental impacts what is first needed is factual information. Comparison of the actual government (both provincial and federal) reviews of the Alberta oil sands environmental reclamation record is at polar opposites with the press information. If companies are adhering to regulations set out by the government and the people still aren't happy then they need to get the government to change the regulations realizing that the government will do that taking into account the need to have an energy supply that although safe is also economic.

[Graeme]

New Assessment of Oil and Gas Reserves Released by USGS

The United States Geological Survey (USGS) is charged with the cataloging and assessment of land formations and mineral reserves in the United States. They have recently assessed the potential additions to domestic oil and gas reserves from reserve growth in discovered, conventional accumulations. All the assessed reserves are believed to be technically recoverable and do not include Federal offshore areas. The numbers show significant growth in the known (discovered) fields throughout the country.


The following are some highlights from the USGS report:
- Convention reserve growth for Oil: 32 billion barrels
Natural Gas: 291 trillion cubic feet
Natural Gas Liquides: 10 billion barrels
- Most reserve growth for oil is in the Alaska/Pacific region (20 billion barrels)
- Most reserve growth for natural gas and natural gas liquids is in the Gulf Coast region (144 trillion cubic feet).

USGS also released a report of oil and natural gas reserve growth in the entire world outside of the US. There was a total of 665 billion barrels of oil, 1.429 trillion cubic feet of natural gas, and 16 billion barrels of natural gas liquids.

Link to USGS US Report
Link to USGS World Report

ENN

[Pops]

Same report you posted before...

No that doesn't mean reserves doubled - LOL!

[Graeme]

Thanks. I saw another reference and thought it was new. . . Actually, there is a separate link for US oil and gas reserves.