Future growth in U.S. crude oil reserves

The title, “New data show record growth in U.S. crude oil reserves” might lead most readers to believe that fantastic developments are afoot in the USA. However, if we study the report in detail we can see that large question marks exist over future oil production. The US Energy Information Agency, EIA, has now reported changes in proven reserves during 2011. Recently I discussed how different types of oil reserves are reported and I can suggest that readers might like to look at that blog again. For proven reserves the EIA states the following criteria: “Proved reserves are those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions”.

The Economist: ”Oil is yesterday’s fuel"

The next issue of The Economist has a front cover that says, “The future of oil – Yesterday’s fuel".

14 years ago, on 4 March 1999, the front cover had a completely different message. Then, the editors of the Economist published an article titled, “Drowning in Oil”. They wrote that “The world is awash with the stuff, and it is likely to remain so”. They thought that cheap oil from the Middle East would reduce the then price of $10 down to $5 per barrel.

One year earlier Colin Campbell and Jean Laherrere wrote in an article in Scientific American that cheap oil would reach peak production in around 2004 (read the article). It was the flow of this cheap oil that, according to The Economist, would force the price down to $5 per barrel.

How to report resources and reserves

The discussion of Israel’s oil reserves gives me reason to discuss the rules that exist for reporting of resources and reserves of conventional oil. It is this oil that still dominates world production and it is production of this oil that has now reached peak oil and has slowly begun to decline. A bright future for increased production requires that we address production of unconventional oils and for those there are not yet any firm rules about how resources and reserves should be reported. As an example I can point to how the kerogen oil in Israel was compared with Saudi Arabia’s conventional oil without mentioning that the “tap” (flow) of kerogen oil could only be opened to a far lesser extent.

Oil & Gas Journal is an industry news journal on oil that I keep an eye on and on 18 July they published an article with the title, “Resource estimate hiked for Israel nearshore license”.

Egypt condemned to continued chaos without its earnings from oil!

On the ASPO Sweden website Martin Saar has written a good article on Egypt and how declining income from oil production is a source of that nation’s current problems. It is definitely a problem for their future. (The text is translated to English by Michael Lardelli).

Egypt condemned to continued chaos without its earnings from oil!

Written by Martin Saar, 8 July 2013, 10:23 PM

Egypt has fallen into chaos again and our traditional mainstream media once again have succeeded in missing the fundamental causes of that nation’s problems – runaway population growth, declining natural resources and a continuously worsening trade balance. Unfortunately, those factors were already obvious several years ago and are now even more severe.

According to Egypt’s central bank, for the first time the nation has become a net importer or oil. It is now dependent on its current $2 billion worth of annual natural gas exports to purchase the difference.

Global ”Peak Water”

Colin Campbell and I first changed the order of the words “Oil Peak” to “Peak Oil” when we thought it would give a better acronym for the name of the NGO we were considering forming. When we did that we had no idea that the “Peak-” descriptor would one day have the impact it has demonstrated. The NGO we were discussing had the working title of “The Association for the Study of the Oil Peak”, ASOP. That acronym jarred a little and thus “Oil Peak” was swapped around to “Peak Oil” so that ASOP would be “ASPO”. Since then many “peaks” have been discussed. Indeed, Richard Heinberg has written a book titled ”Peak Everything”.

My reason for taking up the “peak” term again is an article in The Guardian where they discuss “Peak Water”: Grain harvests are already shrinking as US, India and China come close to ‘peak water’. They assert that there are already nations that have passed “peak water”:

“Among the countries whose water supply has peaked and begun to decline are Saudi Arabia, Syria, Iraq and Yemen.

”Global Energy Systems 2013” and ASPO

The conference, “Global Energy Systems 2013” in Edinburgh, UK, has now concluded with great success. The initiative to hold a conference in Scotland was taken when ASPO International met in Vienna in 2012 after the successful conference there. According to our regulations a meeting of ASPO International members should occur when an ASPO conference is held and in 2012 we decided to try to organise a conference in the UK. Euan Mearns from Aberdeen, the prolific writer for The Oil Drum website, took upon himself the task of assembling a group to organise a UK conference and report back to the ASPO International. We decided that Uppsala would be the backup destination for the next ASPO conference if the UK idea failed.

ASPO International is an entirely non-profit organisation without a budget and so the financing of a conference by a national ASPO organisation can be a difficult issue. During the organisational work it became evident that a conference on Global Energy Systems would find sponsors while a traditional Peak Oil conference would have difficulties.

Peak Oil: preparing for the ‘second half of the age of oil’

In the journal, Science Omega, James Morgan has published an interview with me where we discuss how we can prepare for "the second half of the age of oil". In light of the fact that so many articles in the last half year have tried to convince us that we do not need to worry about Peak Oil, it was a pleasure to discuss how Peak Oil will affect us in future. The title of the article, "Peak oil: preparing for the extinction of 'petroleum man' ", indicates that it is taking a very long term view but before he becomes extinct 'petroleum man' will contract and the hope is that 'the alternative man' will, instead, grow forth.

Future oil production in Canada

The Canadian Association of Petroleum Producers (CAPP) has just released a report ”Crude Oil – Forecast, Markets & Transportation”. In 2007 we wrote our article on production from the Canadian oil sands titled, “A crash program scenario for the Canadian oil sands industry” and since then I have followed developments in Canada. Therefore, it was with great interest that I downloaded CAPP’s report. Before we study the report in more detail, we should note the disclaimer on the first page, “This publication was prepared by the Canadian Association of Petroleum Producers (CAPP). While it is believed that the information contained herein is reliable under the conditions and subject to the limitations set out, CAPP does not guarantee the accuracy or completeness of the information. The use of this report or any information contained will be at the user’s sole risk, regardless of any fault or negligence of CAPP.”

The first thing that strikes me is that, under the descriptor “crude oil” CAPP discusses all oil types. We are so used to the price of oil (e.g.

Oil Production in the Polar Regions

by Kjell Aleklett and Colin Campbell

Oil in the Polar region

Today, the Arctic Council’s eight foreign ministers from Sweden, Norway, Denmark, Finland, Iceland, Russia, Canada and the USA meet in Sweden to discuss, among other things, oil production in the Arctic. They will attempt to agree on a binding joint treaty regarding what preparations will exist in case of an oil spill/accident. The amount of oil that is accessible for production is limited and large fields are required for such production to be profitable. The thing that distinguishes the polar region from e.g. the area between the UK and Norway is that the oil-bearing sedimentary layers are much older and have been subjected to more extreme conditions than those under the North Sea. This means that the likelihood of finding oil is less. So far it is mainly in Alaska that they have been able to extract oil but the reserves there have begun to run out.

Did the Russian jets practice defense of the oil export route in the Baltic Sea?

At the end of April the newspaper Svenska Dagbladet led with the story that “Russian aircraft practiced attack against Sweden” (This is an article in English about this event). In the explanatory graphics accompanying the article we read, “Instead of flying their usual route south out in the middle of the Baltic towards Kaliningrad, the six Russian aircraft turned towards Gotska Sandön [an uninhabited Swedish island]” In an article in DN on 10 May headed, “Russia did not conduct exercises against Swedish targets” our foreign minister Carl Bildt asserted that “There is no foundation in substance for the idea that they practiced an attack against Sweden”. He would not explain what led him to make this statement. We who grew up in the shadow of the threat from the Soviet Union and who remember how every maneuver during our military service ended with a victory over the enemy from the east possibly have difficulty imagining any other reason for the Russian movements than a planned attack against Sweden.

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