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Page added on June 11, 2013

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World Has 10 Years of Shale Oil: US Department of Energy

Geology

Global shale resources are vast enough to cover more than a decade of oil consumption, according to the first-ever U.S. assessment of reserves from Russia to Argentina.

The U.S. Department of Energy estimated “technically recoverable” shale oil resources of 345 billion barrels in 42 countries it surveyed, or 10 percent of global crude supplies. The department had previously only provided an estimate for U.S. shale reserves, which it on Monday increased from 32 billion barrels to 58 billion.

The pace of oil and gas production gains has consistently surprised forecasters since horizontal drilling and hydraulic fracturing, better known as “fracking”, were pioneered in U.S. shale rock formations about ten years ago. Only the U.S. and Canada were producing oil and natural gas from shale in commercial quantities, the department said.

Monday’s assessment indicated that Russia has the largest shale oil resource, with 75 billion barrels. Russia and the U.S. were followed by China at 32 billion, Argentina at 27 billion and Libya at 26 billion.

The report said gas from shale formations increased world natural gas resources by 47 percent to 22,882 trillion cubic feet.

The question of whether other countries can replicate North America’s success in drilling in shale rocks has captivated geologists and diplomats. U.S. crude imports are at a 16-year low, reconfiguring the map of global oil trade.

“Looking at shale resources has typically been understated by outside market participants because the geology is new and the technology is growing rapidly,” said Edward Morse, head of commodities research at Citigroup.

Production from shale has helped keep a lid on crude oil prices at about $120 a barrel, giving western countries leverage to impose sanctions on Iran, a key supplier. World oil demand is about 90 million barrels a day, suggesting the world shale oil resource covers 10.5 years of consumption.

The U.S. and Canada have advantages including large domestic pipeline networks. Both countries also have enough water and specialized drilling rigs to support fracking, which involves pumping huge quantities of liquid and sand underground to crack open rocks and release energy reserves.

Private U.S. landowners also have rights to hydrocarbons beneath their properties. According to Mr Morse, this situation is “truly unique to the United States” and makes oil and gas exploration more efficient.

The U.S. report looked only at technically recoverable resources without regard to profitability, and warned the estimates are “highly uncertain”.

Adam Sieminski, head of the department’s Energy Information Administration, said: “Today’s report indicates a significant potential for international shale oil and shale gas, though the extent to which technically recoverable shale resources will prove to be economically recoverable is not yet clear.”

Prospective shale areas including formations beneath large oilfields in the Middle East and the Caspian Sea region were left out of the assessment.

The International Energy Agency said in its five-year oil market forecast last month: “Although uncertainties remain, it is impossible to ignore the possibility that current non-conventional technologies, as they spread and get both perfected and mainstreamed, could lead to a wholesale reassessment of global reserves.”

The new U.S. estimate of world shale gas resources at 7,299 trillion cubic feet is 10 percent higher than a previous estimate made in 2011.

Inside the U.S., shale now constitutes 30 percent of oil and 40 percent of natural gas production, the department said.

CNBC



22 Comments on "World Has 10 Years of Shale Oil: US Department of Energy"

  1. SteveK on Tue, 11th Jun 2013 9:51 pm 

    Only 10 years? And at current usage levels – no economic growth/recovery?!

  2. northstation on Tue, 11th Jun 2013 11:03 pm 

    “The U.S. report looked only at technically recoverable resources without regard to profitability, and warned the estimates are “highly uncertain.”

    Without regard to profitability? Then the 10-year estimate is meaningless because it will be much less than that.

  3. rollin on Tue, 11th Jun 2013 11:03 pm 

    10 years spread out over 50. There is no rate data in this article and we all know fracked wells have a notorious production fall-off rate. So after a while you keep drilling just to keep up and if you ever stop down it goes, quickly.
    Of course they don’t differentiate between technically recoverable and actually producible. They will be lucky if there are 200 billion barrels produced.

  4. mike on Tue, 11th Jun 2013 11:27 pm 

    If this is supposed to somehow make everyone feel better then holy crap. 10 years, that’s actually less than I thought and I’m an ultra pessimist. How can they even think this is some kind of good news? the situation is worse than I imagined.

  5. DC on Tue, 11th Jun 2013 11:32 pm 

    More cheerleading for the most destructive form of sorta-oil extraction we have yet come up with. It didnt take long for the avalance of But-we-have-ten-years-of-incredibly-diffuse and low-density energy left.

    I guess all the really matters is not how expensive and destructive shale(frak) gas is, but the real concern is…

    Will it fit in the tank of my SUV?

    At the end of the day, for the auto-oil-sprawl cheerleaders, thats all that matters. Saying there is 10 years of the stuff (?), makes it sound like we have all the time in world. Time to do what exactly though? Why, find another ten years supply, hopefully…

  6. James A. Hellams on Wed, 12th Jun 2013 12:09 am 

    This article means that we have only 10 years of shale oil to make the drastic changes we desperately need to make to be prepared for the end of the oil age.

    We are running rapidly out of the precious time we need to address the end of the oil age. When the end of the oil age comes; the toll it will take in human suffering will be immeasurable.

    I read in an article that we are keeping the status quo going at all possible costs. I agree with this assessment.

    Human suffering has taken a back seat to keeping us dependent on aviation and highways (which cannot survive without oil); when we needed to go back to the trains, which would have prepared us for the end on the oil age. The trains are the best (only) means of transportation that can survive without oil; and could have gotten us through the oil collapse to come.

  7. anselm on Wed, 12th Jun 2013 1:55 am 

    It looks to me like they are making a very big mistake. They’re getting that number by using the 10% of SUPPLIES and then applying that to the RATE. Shale ain’t producing 9 mb/d. And this outlines the entire problem with people and their understanding of the problem of peak. It’s going to last longer than ten years because you can’t get it produced quickly enough.

  8. SilentRunning on Wed, 12th Jun 2013 1:55 am 

    The “10 years” of shale oil is illusory – we’ll have far less, because most of it is pure speculation and “technically recoverable” IS NOT “economically recoverable” OR “energetically recoverable”.

    Gold from the ocean is “technically recoverable” – but nobody does it that way because it is far too expensive.

  9. Feemer on Wed, 12th Jun 2013 2:37 am 

    345 billion divided by 90 million is 3.83 years, and think of how much a gallon or Liter will cost? much more than it does now

  10. BillT on Wed, 12th Jun 2013 4:17 am 

    You probably own the last car you will ever have. Your next transportation buy may be a bike or a good pair of hiking shoes.

  11. Stephen on Wed, 12th Jun 2013 8:02 am 

    We need to make some very serious policy decisions NOW. We should have made them back in 1985! If there is not enough oil to satisfy demand and supply is going to fall significantly in 10 years or less, we need to organize a world summit on implementing policies to seriously reduce fossil fuel use by destructing demand, putting alternative transportation and renewable energy systems in place (as much as we can, especially ones with high EROEI), and re-localizing agriculture by turning some homes, businesses, and the like back into farms. Instead of putting policies to punish people from not paying debts, jubilee the debts and let them keep their property (use it to plant gardens). If oil supply falls, unemployment could rise very rapidly. I predict a best case scenario may involve a period of famine, anarchy, riots, hyper deflation of most items while inflation of food and basic needs. I don’t even think gold will be that valuable as a currency alternative because it doesn’t produce food, and a lot of the mass scale marketing which relies on oil to run may not function or may function at a very reduced level. Even the military industrial complex relies on oil, coal, and natural resources so I wouldn’t count on that running indefinitely. Survival is going to depend on the lower class is willing to band together on their own to work out solutions on a local level. I am convinced that we cannot rely on corporate america or the government to do this for us in time.

  12. Stephen on Wed, 12th Jun 2013 8:08 am 

    Basically we are going to have to start making decisions based on SURVIVAL, SUSTAINABILITY, and what makes a QUALITY LIFE that uses significantly less fossil fuels and natural resources. The human race and our policy leaders are going to have to be willing to put this as a higher priority nationally and internationally than economic growth, trade, or corporate profits to survive. We will have to give people other than investment bankers and CEOs the majority of seats at the table when it comes to policy. If we don’t start making that decision soon, the outcome will be bleak.

  13. csatadi on Wed, 12th Jun 2013 8:26 am 

    10 years only?

  14. BillT on Wed, 12th Jun 2013 10:19 am 

    ” The human race and our policy leaders are going to have to be willing to put this as a higher priority nationally and internationally than economic growth, trade, or corporate profits to survive.”

    Stephen, You are asking for miracles now. Do you see ANY indication of that ever happening? I don’t, not until there are no governments or corporations. You say that cannot happen? You yourself say that they need plentiful energy to continue, and that is not the direction we are going.

    If you wait for someone to make a decision to change the flow of the universe, it would be more likely.

  15. Ed on Wed, 12th Jun 2013 11:29 am 

    The calm before the storm. Value this time, enjoy this time and make the most of it while it lasts. The zenith of our civilization. At the same time think about where you live; can your neighborhood become sustainable if it had to. For example, I live in small market town with good rail links, good agricultural land with good wind energy potential. Most people have no idea what is going to hit them in the coming decade. Governments and corporate media are always behind the curve so you can’t rely on them.

  16. Norm on Wed, 12th Jun 2013 11:33 am 

    Looks like good news. Gonna buy me a Greyhound Bus. Drive me, the wife & kids to the Republican party convention, 200 miles each way. Then have a cookout and an overnight, at the RV park.

  17. Beery on Wed, 12th Jun 2013 11:41 am 

    “Inside the U.S., shale now constitutes 30 percent of oil and 40 percent of natural gas production, the department said.”

    That’s pretty fricken sad, because it basically means that shale oil is all we have left. And it’s going to take 30 years to get all that oil out of the ground. So we’d better start thinking about how we’re going to power down.

  18. luap on Wed, 12th Jun 2013 12:34 pm 

    Canada is said to have 100 year supply of oil..yes its crap ..and yes its expensive ..total all of the oil left and we Will prob have 140 years of oil….are we really going to use every last drop..at that point it would be rarer than gold ..but stupid greedy humans Will do nothing till its to late.. as per usual ..Easter Island here we come…..by the way society Will have collapsed way before this all happens …buy a big fence a gun and lots of tinned food…bottles of water…make the fence bigger …shoot yourself in the head ..because who would want to live like that…..God Im so glad I’m not just being born…poor basterds

  19. mike on Wed, 12th Jun 2013 3:27 pm 

    I love how all the papers are pushing news this as a positive headline this morning. 10 years appears to be a long time to the idiots.

  20. Harquebus on Thu, 13th Jun 2013 1:54 am 

    Who can afford this expensive oil? As economies slowly decay, the consumption of oil will level out and then decline. Economies of scale will be reduced and increasing costs will have a positive feedback.
    EROEI mates, EROEI.

  21. shortonoil on Thu, 13th Jun 2013 6:50 pm 

    CNBC *********** got that!

    These numbers are wrong and I can prove it, unless the MMM has found a way to change the Second Law. But more to the point, this may be the the most desperate attempt to keep the illusion alive that I’ve seen so far! It is no wonder that “1984” is now seeing the fastest sales growth of any book in the US.

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