Eye on Depletion | Green Energy News

March 14 2004 – Vol.8 No.51

EYE ON DEPLETION.

Shell has done it again. After cutting its reserves numbers by 20 percent in January, the company has further revised downward its proven stocks of crude.

If Shell has to re-tally its inventory are others soon to follow?

But there’s an equally compelling question.

If oil is vital - for now - for the stability of the world’s economies, why is it so difficult to get a reasonably accurate accounting of how much is available?

According to an article in the Wall Street Journal, guesswork and conjecture, but only a dabbling of hard numbers, are used to analyze remaining oil reserves on the planet.

OPEC members, which control 70 percent of the world’s oil reserves, often keep information confidential.

The U.S. Geological Survey (USGS) gets some direct oil field data, but also buys international reserves information from consulting company IHS Energy, once known as Petroconsultants.

The International Energy Agency (IEA) and the U.S. Energy Information Administration (EIA) get their information from the USGS, says the Journal.

Publicly traded oil companies, of course, also supply reserves numbers to shareholders in their annual statements.

But, despite the scarcity of hard information on available reserves, the estimates for future oil demand are clearer, if only just estimates.

The International Energy Agency (IEA) said in November of 2003 that Saudi Arabian production will have to reach nearly 20 million barrels per day (bpd) by 2020, up from the current 8 million bpd, to meet demand.

More recently the world’s largest oil producer, Saudi Aramco, after some claims that its oil supply had peaked, made its reserves information public as well as unveiling a plan that would supply up to 15 million barrels per day for another 50 years.

The U.S Department of Energy (DOE) agrees with the IEA and predicts that production from Saudi Arabia needs to reach 13.6 million bpd by 2010 and and 19.5 million bpd by 2020.

If the IEA and DOE are correct, Saudi Aramco will be about 5 million bpd short by the year 2050. Somebody will have to take up the slack.

DOE also predicts that worldwide demand for oil could increase by as much as 36 million bpd by 2020. Current production of oil is about 78 million barrels per day. So, if production equaled demand by 2020, 114 million bpd would be needed to supply an oil-thirsty world.

Today, according to Saudi Aramco, there are about 1050 billion barrels of proven reserves, yet that number could be imprecise if oil companies are overstating reserves as Shell did.

Of course oil discovery continues all the time and additional reserves are proven regularly. It’s the rate of discovery - whether it’s keeping up with the pace of anticipated demand - that concerns analysts and should concern everyone.

Visit Saudi Aramco at http://www.saudiaramco.com/ , International Energy Agency at http://www.iea.org/ , OPEC at http://www.opec.org/ , U.S. Energy Information Agency at http://www.eia.doe.gov/ , U.S. Geological Survey at http://www.usgs.gov/ .