BP's Statistical Review of World Energy, published yesterday, appears to show that the world still has enough "proven" reserves to provide 40 years of consumption at current rates. The assessment, based on officially reported figures, has once again pushed back the estimate of when the world will run dry.
However, scientists led by the London-based Oil Depletion Analysis Centre, say that global production of oil is set to peak in the next four years before entering a steepening decline which will have massive consequences for the world economy and the way that we live our lives
BP and ODAS are speaking past each other. BP is making a stock measurement of the total projected global oil supply market and reporting that number forward. They are including non-traditional sources of fuel such as the Alberta oil sands, very deep water projects (Jack 2) and potentially oil shale.
ODAS and most other peak oil stories are not as concerned about the quantity of oil in the ground. Instead the primary concern is over the production rates. Reserve totals are only a secondary variable instead of a primary concern in these stories. It is highly plausible that both BP and ODAS are fundamentally correct --- production could have already peaked or soon could peak, and proven reserves at current consumption rates are sufficient for forty years.
As I mentioned earlier this week, good policy will face diminishing marginal returns. In simple terms, the easy and highly profitable things should be done first, and the more difficult things done after the easily profitable actions are exhausted. This has been the basic discovery profile of major oil fields. The massive and cheap to operate oil fields were discovered early and often. These fields are getting depleted.
The replacement fields are tougher fields to cheaply work and they tend to be much smaller than the earlier discoveries. MonkeyFister passes along this article on the problems in extracting 50% of the world's accessible reserves in Alberta's Tar Sands:
Canada’s Alberta oil sands are integral to providing a secure supply of oil to gas-guzzlers in the U.S. But new research reveals that zealous oil production coupled with climate change has left the water supplies that are used to steam oil out of the sand in critical condition. An influx of water-conserving technologies and policies is needed.
Current provincial regulations don’t protect the Athabasca River system, the industry’s source of water in and around Fort McMurray, Alberta. As a result, oil production in the area has spiraled without meaningful environmental safeguards. The controversy about the state of the Athabasca prompted scientists at the University of Toronto and the University of Alberta to assess the impact of oil production on the province’s water resources. In a report (PDF size: 2.1 MB) issued on May 10, the scientists conclude that the explosive demand for water has put the oil industry on a collision course with the river, which is rapidly drying up...
If oil sands production triples to 3 million bbl/day by 2015, as predicted, industry would require 15 cubic meters of water per second, more than allowed by the critical red-zone threshold, the report says.
The reserves may be there for exploitation, but the rate of production is severely constrained by the geology and hydrology of the region and the deposits. The problems in Alberta are symptomatic of problems in other large new production complexes. The oil may be there, but it is harder to access, harder to transport, and more vulnerable to man-made and natural disasters.