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World's Recoverable Oil Reserves Down 9% 1
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GregLocock
Automotive
When oil is cheap the oil companies don't bother looking for new reserves. Look up any number of zdas04's posts on the subject.
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There is more to the decline in reserves and replacement than not looking for it because the price is low, although that does not help the situation. The last times that oil was expensive, relatively few new reserves were discovered. Prices are low now due to the use of the latest production methods, which are expensive, yet so successful that oil prices declined. That has caused an inversion of prices in relation to cost of production that has forced many producers into flow at max rates to maintain cash flow, which has also resulted in over 250 oil companies into bankruptcy. That BTW has obviously not helped exploration. When you drill down into the data you can also see that almost all of oil being supplied now, especially from the US, Is from unconventional wells many of which are using enhanced production techniques, thus both total reserves are declining as well as recoverable reserves, because all of this oil we are seeing now is not being replaced by new finds. Furthermore the enhanced production methods and fracked wells have short life spans. Many will produce for less than 5yrs with steep decline curves. That is very different from traditional fields, of which many have produced for 50yrs or more.
All the above, plus a decreasing probability of finding new reserves making for low probable reward, are indicating we will soon arrive at the mother of all pinch points, from which current technology, nor currectly known possibilities in the geologist's bag of tricks, has any solution. Placing your faith in the "Higher prices brings more supply" model won't work when supplies are not governed by market principles. It flips to "higher prices brings higher prices" mode.
All the above, plus a decreasing probability of finding new reserves making for low probable reward, are indicating we will soon arrive at the mother of all pinch points, from which current technology, nor currectly known possibilities in the geologist's bag of tricks, has any solution. Placing your faith in the "Higher prices brings more supply" model won't work when supplies are not governed by market principles. It flips to "higher prices brings higher prices" mode.
We had to eventually get to a point of diminishing returns; we dodged and ducked with shale oil, etc., but it was never an infinite supply, so we had to start running out of reserves to find.
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JoshPlumSE
Structural
IRstuff said:
Agreed. In many ways it's surprising that it's taken this long. We've had dire predictions of when we would run out of oil for decades now. But, we keep finding ways to find more or extract more out of the locations we already have.
Part of me wonders is this is a slight "blip" due to the pandemic, reduced demand and such. Perhaps when oil companies start investing in discover and such again (i.e. when oil prices increase) we'll see another jump in oil reserves.
Regardless, as this forum is related to climate change, we really need to find a way to decrease our oil consumption. Both to reduce our CO2 emissions and to "wean off" our oil addiction.
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"Perhaps when oil companies start investing in discovery".
The probability of new discoveries is not expected to prevent the decrease in recoverable reserves, well before any increased demands from pop growth is factored in.
As for new production techniques being invented,..nobody has any idea of how to begin. There are no more magic wands left in the box.
The probability of new discoveries is not expected to prevent the decrease in recoverable reserves, well before any increased demands from pop growth is factored in.
As for new production techniques being invented,..nobody has any idea of how to begin. There are no more magic wands left in the box.
JoshPlumSE
Structural
That could certainly be true. Someone else on this forum (in another thread) gave some really good reasoning why this is thought to be the case. Basically walking us through a number of technologies that have been developed over the last 40 years or so.
All I'm saying is that I've heard that X, Y and Z were imminent for the last 40 years and none of them have happened. Now that we're finally seeing X (reductions in recoverable oil reserves), that could easily mean Y and Z are right around the corner. But, it might not. It might mean that Y and Z are still coming, but that it will be many years further down the road than is currently predicted..... It's just difficult to believe all the predictions after so many years of being incorrect.
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We do have difficulties predicting the future. Without the all-seeing eye, we can only read the data of the past and surmise where it might go. So far it has been good in making projections when discounting technological innovation. We would be right on track, even considering the expected probabilities of potential new fields remaining to be discovered and their probable sizes. The current disparity between recoverable reserves and previous projections can be attributed almost entirely to unconventional oil derived from tech advances that were previously unknown. That indicates future production will be entirely dependent on advanced technology, so its a huge problem if at this point that we don't have a clue as to what that will be, or when it might become available. In other words, it looks like it could be the proverbial end of the road is in sight. If the end of the road is in sight, but not the technology to extend the road, then we have indeed effectively arrived at the time to initiate Plan B, in whatever forms that may take. The X,Y,Z options have already run out.
JoshPlumSE
Structural
Yes, that might very well be true. I certainly remember that earlier thread where a petroleum engineer (IIRC) had me convinced that this was the case.... That the oil reserves issue was predicted much better than the reported levels if you accounted for better technologies (Fracking, horizontal drilling, deeper ocean wells, etc) resulting in more recoverable oil.
It's not just that oil is running out (which it probably is, even if I am not 100% convinced). It's also what these fuels are doing to our atmosphere and climate.
I add these two together (and add in the desire not to rely on foreign oil sold by countries that hate us), and I have what feels to me like a bullet proof, iron clad argument for Plan B (nuclear power, reduction in the use of fossil fuels, reduction in CO2 emissions, etc).
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