October 7th 2017

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Articles from this issue:

COVER STORY Green energy push has left us blowin' in the wind

EDITORIAL Lessons for Australia in NZ election results

CANBERRA OBSERVED Assurances on religious freedom needed now

ENERGY Peak oil turns out to be another moral panic

FOREIGN AFFAIRS Timor Leste, Australia reach new border treaty

BUSHFIRES Disaster awaits as advice again goes unheeded

GENDER POLITICS Does biological sex matter?

SAME-SEX MARRIAGE Intolerance of the 'Yes' campaign for all to see

EUTHANASIA Medical murder: three historical cases

INTERNATIONAL AFFAIRS Gallant Taiwan survives alone in the bitter sea

SAME-SEX MARRIAGE Prepare for apologies in a generation's time

SAME-SEX MARRIAGE A reflection on the use and abuse of the thought of the Angelic Doctor

MUSIC Stupendous talent: What to do with all that ego?

CINEMA Trollhunters: Guillermo del Toro's TV fantasy

BOOK REVIEW Debunking the 'harmless' tag


EUTHANASIA Victoria's death bill: questions that need answers

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Peak oil turns out to be another moral panic

by Chris McCormack

News Weekly, October 7, 2017

The continual discovery of new oil reserves has made a lie out of the dire predictions of peak oiland depleting fossil fuels that have surfaced over recent decades.

The notion of peak oil – that is, that we have already discovered the bulk of global oil reserves and have reached the maximum rate of oil extraction – does not stack up when new reserves are constantly being found. The BP Statistical Review of World Energy June 2017 shows that total proved oil reserves at the end of 1996 were 1148.8 thousand million barrels (tmb).

That had risen to 1388.3 tmb by the end of 2006 and 1706.7 tmb by the end of 2016. Instead of global oil reserves depleting, they actually grew 48.56 per cent over the last 20 years.

Australia, while its oil reserves fell from 3.8 tmb in 1996 to 3.5 tmb in 2006, grew again to 4.0 tmb in 2016, an increase of 14.29 per cent of proved oil reserves in 10 years, (or 5.26 per cent over 20 years) showing new reserves are indeed being found.

The big winners in discovering new oil reserves are the United States, Iran, Ecuador, Venezuela and Kazakhstan. The U.S. increased its total proved oil reserves from 29.4 tmb at the end of 2006 to 48 tmb at the end of 2016, an increase of 63.27 per cent in 10 years. Iran increased its proved oil reserves from 92.6 tmb in 1996 to 138.4 tmb in 2006 to 158.4 tmb in 2016, an increase of 71.06 per cent over 20 years.

Ecuador increased its proved oil reserves from 4.5 tmb in 2006 to 8.0 tmb in 2016, an increase of 77.78 per cent in 10 years. Venezuela increased its proved oil reserves from 72.7 tmb in 1996, to 87.3 tmb in 2006 and to 300.9 tmb in 2016, an increase of 313.89 per cent over 20 years. And Kazakhstan grew its proved oil reserves from 5.3 tmb in 1996 to 9.0 tmb in 2006 to 30 tmb in 2016, a 466.04 per cent increase over 20 years.

If one looks at the graph of reserves-to-production ratios (R/P) – that is, the oil reserves remaining at the end of any year divided by the production in that year, the result being the length of time those remaining reserves would last if production were to continue at that rate – then the falsity of claims of peak oil becomes patent. In 1986, the R/P predicted that the world’s oil supply would last 39.8 years at 1986 levels of production.

Thirty years later, in 2016, the same graph predicts the R/P of global oil supply lasting 50.6 years. If the original prediction had been correct, we would now be facing the end of oil production within 10 years.

The fact is, every continent has more proved oil reserves now than it did in 1986. The growth in Venezuela’s oil reserves means that, on current trends, it has an R/P of 341.1 years. That is to say, Venezuela has over 341 years of oil still left in the tank.

No doubt this number will increase over time, as it has elsewhere, as more reserves are discovered and cheaper and more sophisticated methods of extraction are employed, opening up reserves where extraction was previously uneconomical.

A report released by Lux Research in 2013 estimated that new oil drilling technologies could increase the world’s petroleum supplies sixfold to 10.2 trillion barrels in the near future. The report detailed numerous so-called enhanced oil recovery (EOR) technologies that could prolong the lives of old oil fields and open up new, unconventional petroleum reserves, such as oil sands.

Oil can be extracted via three different methods: primary, secondary and tertiary (EOR). Primary recovery relies on the natural pressure within the oil reservoir to propel oil to the surface. This method usually leaves around 85–95 per cent of the oil behind.

Secondary oil extraction involves pumping compressed gases or injecting water into the oil reservoir in order to drive the oil to the surface. This method still may leave between 50 and 80 per cent of the available oil in the ground.

EOR uses an array of technologically advanced methods to extract up to 80 per cent of the oil in any reserve. Recent improvements in EOR methods have lowered the costs involved, making it a far more economically viable option.

EOR is different from fracking, one of a group of methods known as “oil production intensification”, which aims to increase oil flow locally by changing the nature of the underlying rock strata. EOR methods do not change the underlying rock structure.

Continuing advances in the cost and efficacy of oil extraction mean that oil reserves, previously deemed unusable, are now ripe for extraction. With this in mind, and given the ever-expanding reserves-to-production ratio, there seems to be no reason to suggest that oil reserves are going to be in short supply any time in the foreseeable future.

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