Is The Inclusion Of NGL In The Definition Of Oil Plausible?
Posted: Wed 08 Aug 2012, 21:18:02
Is The Inclusion Of Natural Gas Liquids In The Definition Of Oil Plausible?
seekingalpha
A new debate has emerged in recent days around the new definition of oil. In a commentary published on July 16, 2012 on Peak Oil Review, Kurt Cobb argues that the idea that global oil production has been spinning around 88 and 89 million barrels per day (mbpd) this year is wrong. This is because these figures include, following the new definition of oil, not only crude oil but also natural gas plant liquids (NGPL) (mainly, ethane, propane, butane and pentane) and biofuels.
According to him, excluding these products from the analysis, global oil production would be reduced to only about 75 mbpd. Moreover, since 2005 the volume of crude oil would have stalled between 71 and 75 mbpd, while liquids extracted from natural gas would have grown "rather rapidly" and biofuels to a lesser extent.
This finding, however, does not explain why oil prices went up so much in the last 7 years or so, leaving Cobb's counter argument to the abundance of world oil hypothesis intact not to include NGPL and biofuels in the definition of oil. I describe below the various points of view put forward by Cobb.
seekingalpha