A national newspaper headline this past week stated we have 53.3 years of oil left. The precision is remarkable, but the accuracy is a bit off.
The story was based on information in BP’s 2014 Annual Statistical Review and was derived by dividing global proved reserves by production rates of oil.
Fortunately, proved reserves are just part of the resource story. They neglect oil and gas yet to be discovered and new plays. And they are only a portion of ultimate recoverable resources in and around already discovered fields. Advancements in exploration, drilling, completion, development and production technologies continue to add resources during the lifetime of a field or play. The best recent example of this is in unconventional oil and gas: the shale plays, and light tight oil ( for example the growth of the Bakken, Eagleford, Marcellus and Permian). But it's true in conventional fields as well. A prime example is the new Shell Mars B development in the Deepwater Gulf of Mexico which recently came on production in the prolific Mars Basin. The same applies to most of the other big deep water fields around the world as well as the giant fields of the Mideast, the North Slope of Alaska, Latin America and the Far East – in fact most of the largest discoveries of the past century. The rule is: Big fields get bigger. And as the resource base grows, the reserve base also grows, and both reserve life and the resource life are extended. History supports this: Proved reserves have more than doubled since 1980 – even while the world consumed more oil in that time period than it had proved reserves in 1980.
So, it's probably a bit premature to say we only have a half century of oil left. To be fair, the newspaper story actually recognized this early on in the body of the article ( and, clearly, the original BP review took the broader view of resource growth and historical increase in reserves.) Hopefully readers made it past the sound byte of the headline.
Why is this important? The world needs energy to feed, clothe, shelter, transport, care for and educate a population that will grow at an average rate of over a million people per week until the middle of this century. Energy is crucial to lift people from a life of hardship and poverty: for schools, farms, businesses, hospitals, and industry – and to meet basic needs.
Today in this rapidly expanding world, 1.3 billion people have no access to electricity, and nearly 900 million still use unsafe drinking water. More than 2.5 billion people still rely on biomass, like wood and dung, for cooking. The dilemna we face is that under almost any energy scenario, world energy demand will continue to grow at a pace even greater than the pace of population growth – this despite the best efforts of increased efficiency and conservation efforts.
To the worlds emerging economies and for the livelihoods and health of people around the world, affordable, available and reliable energy is essential. It is highly likely that, even while renewable energy makes gigantic and welcome strides, at least until the middle of this century the majority of that affordable energy supply will still need to come from oil, natural gas and coal, and as is increasingly evident nuclear. As I’ve discussed in a previous article, ( see Energy Pragmatism http://lawrence1energy.blogspot.com/2014/06/energy-pragmatism_17.html ) only the most innovative technologies, policies and investments across all energy sectors will allow us to both meet the energy needs of the world and mitigate the impacts of that very energy.
And that's why it's important that we have more than 53.3 years of oil left. And why it's important to read beyond the headlines.