Wednesday, October 26, 2011

Shale Oil and Gas: The Years They Add

The real hot topic in energy these days is not wind or solar. It is shale. By way of an example, today’s New York Times carries a story titled “The Energy Picture, Redrawn.” The focus is on shale oil and on shale gas respectively. As is usual in such coverage, the broader context provided by current reserves and trends in consumption are not highlighted at all. The graphics suggest, instead, plenty of both for a long time to come.

By way of a useful footnote to news coverage, I’ve undertaken to calculate for you just how long current proven reserves will last and how much longer the fossil age will last assuming that projected shale reserves actually pan out.

Here is a graphic that tells the tale. After that I’ll tell you how I did it.

What we see here is that without exploitation of global shale oil reserves, oil will run out by 2037. If we succeed in exploiting all reserves of shale oil, we get another 44 years and the world runs out of oil in 2081. The same for natural gas. Current conventional world gas reserves now are seen to last longer (until 2048), but exploiting all shale gas will only extend gas use by 25 years, to 2073.

What I did was to assemble three categories data: (1) current reserve estimates; I chose the World Oil estimates (link) because they are the highest. On the oil side these already include some portions but not all Canadian tar sands—which are not part of the shale of projection. (2) I obtained shale oil reserves from this Wikipedia compilation and shale gas estimates from the Energy Information Administration (link). (3) I obtained oil and gas consumption estimates from the EIA (link, link). For oil I calculated the consumption growth trend from 1982 through 2008; I extended that trend into the future. The growth is at a rate of 1.4 percent a year in barrels. For gas, the EIA provided forward estimates out to 2035; the growth here is at a rate of 1.6 percent a year, measured in trillions of cubit feet. These I extended at the same rate into future years as well.

Having a projected consumption out through 2100, I calculated, first, how rapidly known reserves would be consumed. Next, I added shale reserves to current reserves and did the calculation once again. The results are charted above.

Part of the down-side of loudly cheering shale reserves is that it lets the public fall back into an easy slumber—of ignorance. Shale is not a long-term solution. First of all, both resources will cost a lot more to exploit than crude oil and natural gas. Exploitation will have huge environmental consequences. And current estimates may well be optimistic.

The next two graphics show the same relationships in quantitative forms, the first for oil, the second for gas.

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