Proved U.S. oil reserves, without condensate, increased to 23.3 billion barrels at the end of 2010, according to a new report from the Energy Information Administration. The full report is here. The report and discussion on the ‘net is focused on 25.2 billion, which includes crude oil and lease condensate.
In 2009, proven reserves increased by twice the amount of oil we pulled out of the ground. In 2010, proven reserves increased by 2.5 times what we produced.
How can this be?
It is a mystery. Or magic must be involved. Or the oil fields are having babies, breeding like rabbits.
Those are the only possible explanations according to Peak Oil concepts. Doctrine from that school of thought is that the only oil we will ever see is what we know about and can produce at this moment. We will never find any more oil than what we have this afternoon. So, the info from EIA must be a mystery. Or magic.
Okay, I’ll stop the sarcasm. I really don’t enjoy using that. It’s just so easy to use ridicule when discussing Peak Oil.
Now I’ll get serious.
I think the biggest fallacy in the concept of Peak Oil is that the only energy we will ever get is what we can economically produce today using technology of today.
What the Peak Oil concept considers an upper limit of everything we can ever reach is actually the definition of proven reserves. That is what we know about today, is economical to produce with today’s prices, and we can get to with technology that we have on hand. Here is EIA’s explanation:
Proved reserves are those volumes of oil and natural gas that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Reserves estimates change from year to year as new discoveries are made, existing fields are more thoroughly appraised, existing reserves are produced, and as prices and technologies change.
That definition contains at least three incredibly huge assumptions: what we know about, economically feasible, and technically
feasible. All three of those assumptions change constantly.
What has happened in the last two years?
Here’s the data from table 7 of the EIA report. I will look at oil reserves only, excluding lease condensate. In the last two years, proved reserves have increased 7.6 billion barrels at the same time as we have produced 3.5 billion barrels.
Why the increase? New fields are a very small part of it. The biggest factor is revised estimates as drilling proceeds along with finding out the field is really bigger than what the engineers thought.
Here’s the data for two years:
- 19,121 – Proven reserves in billions for oil only, end of 2008
- 3,518 – production in 2009 and 2010
- 7,664 – increasing reserves for all reasons
- 23,267 – proven reserves in billions, end of 2010
Expect more of the same in 2011.
Proved reserves for 2011 should also increase dramatically due to the boom in Bakken and Eagle Ford drilling. Both Bruce Oksol at Million Dollar Way blog and Walter Russell Mead at Via Media mentioned this.
Oh no! We are RUNNING OUT OF OIL!!!!!
The Wall Street Journal covers this news in their article U.S. Oil Reserves Jumped in 2010.
Just in case you thought the peak oil concept was dead, which it really should be, consider the following comment posted on the WSJ article. Just to be clear, this was from a commenter, not the reporter:
Great. We’ll have a three-and-a-half year head start on our nuclear program when the reserves actually peak, and if we really need to we can supplement with natural gas and Canadian tar sands.
Where did the commenter get that 3.5 year number? I think he applied Peak Oil doctrine.
The WSJ article says US consumption is about 7B a year. Proved reserves are 25.2B, including lease condensate. Divide proved reserves of 25.2B by 7B consumption, and we have reserves equal to 3.6 years of consumption. Thus, we have 3½ years before all our oil runs out.
That means the writer believes we won’t ever find any more oil after what happened in 2010. I guess I need to find some more sarcasm and ridicule.