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Two times more oil exists than producers report

Posted by: Adam Aston on June 9, 2008


Peak, shmeak. Fact is, says Richard Pike, a former oil industry man and now CEO at the UK’s Royal Society of Chemistry there’s plenty more where the last century’s oil came from. Indeed as oil grows more expensive, the volume of reserves that can be economically exploited gets bigger too. At $50 per barrel, for example, Canada’s tar sands are too costly to cook into usable fuel. Not so now. This is no surprise of course to folks in the energy industry. Reserves, for example, are typically reported only if they are considered “economically recoverable.” So prospectors have long known about far flung locations and exotic types of oil that exist, but that cannot be affordably recovered. The problem with this sort of data, though, is that the existence of such “extreme” reserves obscures far cheaper steps that should be taken before they’re tapped: higher efficiency in vehicles, power plants, and buildings should be the first and main focus of all energy strategy in the near- to mid-term.

Read more here: Oil shortage a myth, says industry insider

Reader Comments


June 9, 2008 3:33 PM

The flip side is the peak oiler recognition that the big oil producing countries are liable to exaggerate their reserves (at whatever the going price) in order to improve their credit-worthiness or for some other such purpose--one oft-cited reason is that OPEC divvies out allowable pumping quantities based on the relative size of "reserves," so each OPEC country has an inducement to claim larger reserves, and thus receive permission to pump greater quantities if it chooses. Wikipedia has some more on the topic of exaggerating reserves. Of course, that doesn't mean the peak oilers are necessarily right about this, but it throws a conceptual monkey wrench into easy acceptance of Richard Pike's perspective.


June 9, 2008 4:50 PM

Peak oil is about production, not reserves you dummy.

David Ede

June 10, 2008 4:43 PM

A very naive article. The remaining oil is in smaller deposits which is more expensive to produce. Higher oil prices only makes some of these deposits viable. Some deposits will require as much energy to drill, produce, refine and transport the oil to market as the deposit contains. In other words there is no thermodynamic benefit producing the oil, in such cases the deposit will never be economic to produce, no matter how high the price of oil rises.


June 10, 2008 6:53 PM

Well then somebody needs to tell the IEA's Fatih Birol before the IEA comes out with its World Energy Outlook in July "The Sirens Shrill".

The International Energy Agency (IEA) gives alarm: The world could run out of oil faster than expected - the danger of a supply shortage is rising

Hunger for energy vs. energy shortage: While the demand for oil is on the rise, the production is decreasing - shortages, escalating prices and inflation are looming. When talking to energy politician Astrid Schneider, Faith Biro, chief economist of the IEA demands a change in policy from the member countries. His motto: leave oil before it leaves us.


June 11, 2008 12:51 AM

From 1995 to 2004, less than 30 new wildcat wells were drilled in Saudi Arabia, compared with more than 15,700 in the United States. (Newsweek, January 23, 2006)

Most of Saudi Arabia has still not been properly explored for oil. Trying to convince 'peak-oilers' of this is harder than trying to convince the nutcases at Jonestown NOT to drink the Kool-Aid!


June 11, 2008 3:23 AM

Its easy to throw out the "ooh we are running out of oil any day now" scenario because it is accepted and expected, and because the "green" lobby like it too. Whenever a counter-argument (such as the fact that if all of the OPEC countries claim lower reserves they can actually demand higher prices and keep going for longer). This is another case of someone going against the grain and being hung for it. The only people with any real knowledge of oil reserves are the people searching and drilling for it. Claiming to have vast reserves does nothing for them but lower the price...

Rick Parmelee

June 11, 2008 8:21 AM

I suggest you do your homework prior to writing such a skewed, oil addicted view. Yes, Canada’s tar sands are too costly to cook into useable fuel then and also now. An environmental nightmare requiring twice the energy from natural gas to produce than the energy return on this black goo. What a great idea! Let's accelerate "peak natural gas" too.


June 11, 2008 11:48 AM

The fact is a non renewable resource is depleting never to be refilled again.
The smaller the source the slower the production which now by it's high price is showing that the rate of output does not satisfy demand for everyone that wants it.
Renewables will not fill that demand gap- Look at it this way. It took the sun 200 million years to store that energy.
We will use it all up in less than 200.


June 11, 2008 12:51 PM (from a 2004 article)

The Little Ice Age from 1645 -1710 a.d. was apparently caused by 3/10 of 1% less solar radiation for that period of time (a phenomenon known as the Maunder Minimum, tho there have been other earlier minimums and we're apparently due for one now) It's notable for a near total lack of sunspots. Usually there's 30 to 40,000 of them a year, but this also varies according to the 11 year sunspot cycle, reflecting varying solar activity. There were almost none during the Little Ice Age and there haven't been any for the last two years and the sun should have now returned from the bottom of it's cycle but hasn't so far.....The first article talks about that and the second elaborates on why the lack of sun spot activity results in less solar radiation.


June 11, 2008 1:43 PM

I'll never quite get the vitriol that comes with peak oil territory, as if no one could conceivably come to a different conclusion than the writer (whichever side or sides the writer happens to be on) without resorting to gross violation of all moral standards. E.g. "Youidiot"'s incorrect declaration of his/her infinite intellectual superiority--as if production occurred in an alternate universe from reserves!

David Ede is less abrasive, but why declare that someone else is naive when you aren't omniscient? Who among us knows every last detail of geology and economy? Not I! That said, I do believe that Ede is incorrect in asserting that net-energy losing deposits can never be economically viable. In fact, I think they can be. For example, consider Canada's tar sands and some hypotheticals. Assume that petroleum is fetching a very high market price and that natural gas is not. Assume that it takes more btus of energy to process the tar sands into usable petroleum than is contained in that petroleum. Now assume that the tar sands miners/processors use many btus of relatively inexpensive natural gas to derive fewer btus of relatively expensive petroleum... voila! An economically advantageous conversion of btus into a net energy loss yet a net economic gain (for the miner/processor at least). Even without my hypothetical example, Ede seems to have misunderstood the claims attributed to Richard Pike. That Pike says previously uncounted deposits become counted only when they are economically viable does not mean that he is asserting that every last drop of fossil fuel on the planet is economically retrievable. Some deposits will always and forever be too small, too distant, or for whatever reason too difficult to retrieve economically (or even physically) speaking. But there's one heck of a lot of gray area, at least in principle, between what might currently be counted as economically viable and that which is an infinitely lost cause.

My hat's off to Robert, on the other hand. Not only is his comment correct in its content, as far as I can tell, but he managed to avoid insulting anyone. Wow, a blog comment without an insult? Robert must be smoking something we could use more of.


June 11, 2008 8:41 PM

Whatever way you look at it PEAK OIL is a FACT as oil is a finite resource. Opinion should just differ as to when it has or will occur. It would be wise to prepare for it sooner rather than later.

Half empty

June 12, 2008 8:13 AM

The US economy will go bad long before the oil runs out and the tar sands are a yoke, takes to much energy not economical.
The Us finds a war a easier solution. Iran next?


June 12, 2008 8:44 AM

The US economy will go bad long before the oil runs out and the tar sands are a yoke, takes to much energy not economical.
The Us finds a war a easier solution. Iran next?

Dagny McKinley

June 16, 2008 4:51 PM

Regardless of whether their is oil or not, drilling for oil disrupts wildlife and damages the earth. Why not find another source? They are out there!

Dagny McKinley
organic apparel

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BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.

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