Monday, August 15, 2011

The Mystery of Rising Oil Reserves

On its web page showing world crude oil reserves (link), the Energy Information Administration shows a link to what it labels an Important Note. Here is that note in full:

Reserve estimates for oil, natural gas, and coal are very difficult to develop. The Energy Information Administration (EIA) develops estimates of reserves of oil, natural gas, and coal for the United States but does not attempt to develop estimates for foreign countries. As a convenience to the public, EIA makes available foreign fuel reserve estimates from other sources, but it does not certify these data. Please carefully note the sources of the data when using and citing estimates of foreign fuel reserves. [Typography as in the original.]

The note becomes significant when you look at the second table referenced there—the source of my data for the following graphic. A word or two about second chart I want to talk about. The curve on it shows total world crude reserves (1981-2009) in billions of barrels, right axis. The rest of the chart shows percent change in reserves in each of seven world regions. Thanks to some huge changes here and there, which is my actual focus today, these data are hard to see. To help you interpret the second chart better, I am first showing an enlargement of its first five years here:

In 1981 we have data for all regions except the Middle East; the Middle East neither added to nor lost reserves. The first blue bar is North America. Its reserves increased by 18.2 percent. The last region is Asia and Oceania; its reserves went up by 2 percent. Note that in 1982—and all following years, Eurasia’s reserves did not change; hence its bar is not visible. Notice that in 1983 the North American reserves registered a negative change; they fell 11.2 percent. Europe’s reserves declined by 7.3 percent. Identical data are shown in the second chart but for the period 1981-2009. Now for the second graphic. If you want to study the regions more closely, the link provided above will get you the data. Here I’m interested in the pattern, and especially unusual growth in selected years.

The most telling feature of this chart is that world reserves in actual barrels have had two major increases, the first in 1988-1990, the next in 2003. And going with these changes are a few large up-spikes in the regional estimates of proven reserves, along with smaller upticks. The BIG one, in 2003, is by North America. But when you look closer, you discover that the source of it is Canada. Between 2002 and 2003, Canada suddenly discovered 175 billion barrels of crude. Wow! Where was I in 2003 not to have heard the news? It must have fanned the globe like a wildfire! Or maybe I’d read the EIA’s Important Note already and just ignored the news? Something like that. In 2002 Canada had reserves of 4.9 billion barrels of crude. In 2003 it decided that its shale oil deposits ought to have some respect. They put them on the books officially. Now when I see the words “crude oil,” I think of gushers, wells, stuff that flows. I don’t think of rock. To see how far shale rock is from oil in your car, see this post here.

This then led me to investigate other interesting new spikes and up-ticks on this chart. They make you wonder. Indeed they cause you to want to read that EIA note again—wishing it said more. But international politeness causes EIA to murmur, almost inaudibly. Here then some annotations to the massive table from which the graph was wrought.
  • Ticks in 1981-1982 in North America came from Mexico. It added 25.7 billion barrels to its reserves in those years. The North American dip in 1983 (see first table) was also a Mexican revision.
  • In 1985, Kuwait improved its reserves in one year by 26 billion barrels.
  • In 1988 Iraq (this is still Saddam Hussein’s time), discovered 52.9 billion barrels it had overlooked until then.
  • That must have troubled the Saudis. In 1990 they upped their reserves by 85 billion barrels. Take that, Saddam!
  • In 2003, alongside the Canadian miracle, Lithuania also kicked up its reserves 11.4 billion. I wonder if that’s also shale. I’ll have to look. Just did. Yes it is.
  • In 2007, Kazakhstan found 21 billion, and I suspect some rocks there too, but I haven’t looked.
  • The last notable discovery came in Venezuela, in 2009. The country upped its crude reserves by 14.2 billion barrels. Well, that one gives me a little less concern than the others—either that or paranoia is fatiguing.
In any case, thanks for that Important Note, EIA. Hard numbers are always hard to come by, but, as advertisers firmly believe, false hope is better than none. And based on that, folks, why should you worry? Reserves are going up, up, up—even as our draw down grows by ever mightier leaps every year. Up, up, and away! Deep sigh. Thank the Lord for those infinitely fertile wells.

1 comment:

  1. You see, this is a post of the sort that is important to have "out there." Yes, there is plenty of information available in the world and ever more easily availalbel thanks to the Internet. However, clarity is another thing. For those truly interested in understanding things, having reliable pointers to clear and supported data is important. It is also important that those looking for clarity, even if a small number, find islands upon which to rest in the flood of often unsupported information.

    So, keep the posts coming, even if not as frequently!