BP
Statistical Review of World Energy June 2014
For the love of the human
race.
Wednesday, December 17, 2014
This is a very comprehensive and thorough report. It contains much more than what we have
emphasized. Please download it and read
it at your leisure.
Oil
Page 6: Reserves
From the last three columns for the top nation listed, the
United States we find these very important figures:
·
Total proved crude oil
reserves at the end of 2013 is 44.2 thousand, million barrels. In modern terms that would either be 44.2
billion barrels or 44.2 G-bbls. This
means that all the oil presently available in United States wells that are
drilled and immediately available for pumping is 44.2 G-bbls. This is far short of the reserve estimate
that we allowed based on EIA data and the commonly held myth that we have only
produced half of the oil that lies beneath our feet: namely, 208.9 G-bbls.
·
R/P ratio for the United
States is 12.1. No units are stated for
this ratio, but it is measured in years.
This means that if more wells are not drilled and put into production
that the production of oil in the United States will stop in 12.1 years. We will return to this ratio later.
Page 8: Production
The third from the last column on page 8 reveals that:
·
United States crude oil
production for 2013 is 10,003 thousand barrels daily; which is that same as
10.003 M-bbls per day. Since there are
365.25 days in one year, we conclude that United States oil production for 2013
is 3,654 million barrels per year or 3.654 billion barrels per year or 3.654 G-bbls
per year. The EIA reports a crude oil
production of only 2.716 G-bbls per year.
This is a considerable difference of reported fact, which we cannot
explain.
·
If we divide the crude oil
reserves by the annual oil production we get the length of time that the oil
will last in years. 44.2 G-bbls divided
by 3.654 G-bbls per year is 12.1 years.
This is what the R/P ratio means.
If the smaller EIA production figure is used we still only have 16 more
years-worth of proved crude oil reserves left in the ground at our feet.
Page 9: Consumption
The third from the last column on page 9 reveals that:
·
United States crude oil
consumption for 2013 is 18,887 thousand barrels daily. Oil is a perishable commodity, so pretty much
everything that is produced is consumed.
The difference between the consumption and production represents the net
amount of oil that we had to purchase and import in 2013: 8,884 thousand
barrels per day; 8.884 million barrels per day; 3.245 G-bbls per year. The EIA, on the other hand, reported a consumption
of 5.674 G-bbls per year, as opposed to the 6.898 G-bbls reported by BP. Although, this is also a considerable
difference in reported fact, we believe it is explain by the idea that we have
not gleaned all the sources of oil consumption reported by EIA.
·
The gross purchase may be higher
because the United States buys and resells oil to other countries.
·
If we buy oil we cannot be
energy independent. If we don’t buy oil
we will run out of oil in about 12.1 years counting from 2013, so 11.1 years,
almost 10.1 years now.
Undiscovered oil
What the report doesn’t reveal is how much oil exists for
which no one has ever drilled. Aw,
nobody can know that, can they? Wrong! Since around 1910 oil exploration has been
done by seismic technology. At first an
oil man would throw out a stick of dynamite.
The seismic echo told him where he was likely to find a salt dome with
oil beneath it. This technology improved
over the years until somebody invented a hydraulic machine to make shock
waves. Seismic instruments also became
more sensitive. By placing very
sensitive seismic sensors around a central shock making machine the geological
structure of the United States could be mapped with considerable
precision. By comparing this map with
known producing well structures a statistical evaluation could be made. Such statistics are then reduced to data
points for the amount of undiscovered oil with 95% odds that drilling will be a
success, for 50% odds, and for 5% odds.
We pretty much know where the oil is already, and how much is
there. The United States Geological
Survey (USGS) reports these statistics.
The United States Department of the Interior (USDI) also publishes
reports, but these are generally less accurate, and are far more
optimistic. We’ll report on these
figures separately.
By now you’ve figured out that the R/P ration assumes that
the United States demand for oil will not increase. Obviously, United States oil production is now
increasing at 7.41% per year, while consumption grows at a modest 0.76%. This doesn’t sound like much, but it adds
up. For comparison United States budget
planning ranges between 2 and 5% growth per year. 7.41% growth means that we will double our crude
oil production in about 9.7 years and 0.76% growth means that we will double our
crude oil consumption in about 91.6 years, unless we run out of oil first. 2 to 5% annual growth means that we will
double our energy demand in 35 to 14 years, respectively.
Conclusion
Obviously, we are mortgaging our children’s energy
future. Growth means that we are
mortgaging our children’s future faster than we think we are. Growth is a dirty word to anyone who wants to
think in terms of conservation.
The figures that are reported are not consistent. If we accept the EIA figures as accurate, we
are left without a real estimate of reserves.
The BP report also fails to include reports for undiscovered oil. It is also possible that shale oil has been neglected
in one or both reports. We need better
data, and better explanations of data from both EIA and BP.
Of course it is always possible that the BP report does not
analyze world energy as it suggests. In
this case it would seem that BP plans to be out of the crude oil business in as
few as 12.1 years. Since BP is a big
producer in the United States, their closing would have a massive effect, even
if other producers stayed in business.
The real crux of the situation is that if we don’t drill we
will run out of crude oil in a very few years, perhaps only 12.1. If we do drill to open the undiscovered
reserves, we will have a decade or two more of crude oil production, then we
will run out of crude oil in a few more years.
Whether, we drill or don’t drill we are still on the brink of running
out of crude oil. That is the problem we
must deal with.
Moreover, if we develop crude oil self-sufficiency,
production will increase, and we will run out of oil more quickly. Then we will be at the mercy of remaining
world oil markets. If we import more
oil, the price will go up and we will still be at the mercy of remaining world
oil markets.
No matter which way we turn we remain trapped between Scylla
and Charybdis. The only sensible means
of defense is to cut consumption drastically, at least by one-half this year,
and more in the ensuing years. Now, who
is willing to listen to that? Who is
willing to do that?
The real hard choices are: either face suffering today, and
live tomorrow; or live like grasshoppers today, and die tomorrow. Even so, it is our children and grandchildren
who will face death, not us.
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