The discouraging politics of oil prices clouds the encouraging science of potential supply. Oil and gas companies must not let good supply news smother in price malarkey.
Thanks to a late-March agreement by members of the Organization of Petroleum Exporting Countries to raise production quotas, the price of crude oil is subsiding. By the time the group made its necessary adjustment, however, US politicians were in action, proposing everything from a federally funded heating-oil hoard in the Northeast to an antitrust lawsuit against OPEC. Coming as it did in an election year, the price bump will join a ridiculous list of political arguments against use of petroleum.
Thanks to science, however, fear about the finite nature of petroleum supply need not join that list just yet. The potential for petroleum to improve the experience of human life has grown again.
Resource estimates
The US Geological Survey is increasing its estimate of the undiscovered, conventionally recoverable petroleum resource. The draft of a report to be released later this month raises the most likely value for the oil and gas resource outside the US at 1.634 trillion boe from an earlier estimate, reported in 1994, of 1.556 trillion boe. The new report covers the period 1996-2025 and for the first time includes an estimate of the potential from field growth.
The oil resource estimate increased from the 1994 assessment by 20%. Gas declined by 10%, and natural gas liquids jumped by 130%. With 1995-96 estimates for the US added to the new numbers, the total undiscovered resource increases from 1.65 trillion boe to 1.807 trillion boe from the prior estimate, with oil up 24%, gas down 10%, and NGL up 104%.
USGS puts the most likely estimate for undiscovered oil outside the US at 649 billion bbl and for field growth at 612 billion bbl. For gas the estimates are 778 billion boe (4.669 quadrillion cu ft) of undiscovered resource and 551 billion boe (3.305 quadrillion cu ft) for field growth.
Addition of the field-growth estimates is significant not just for the volumes involved. It also acknowledges the great amounts of oil and gas that producers have added to reserves through knowledge about previously discovered reservoirs and through technology.
Advancing knowledge also accounts for gains in undiscovered resources. The largest increases are in the Middle East and North Africa and off South America and western Africa. The Middle East and North Africa increases, USGS says, reflect new understanding of resource size in Jurassic and Cretaceous petroleum systems. Gains in the southern Atlantic come from deepwater, turbidite reservoirs made accessible by new technology.
Estimates declined for resources in Mexico and China because of new information previously unavailable to USGS. Most of the drop in the gas-resource estimate occurred in arctic areas of the former Soviet Union. There also were declines in China and Canadian foreland provinces.
Ultimate recovery
USGS estimates the ultimately recoverable conventional oil resource outside the US at 2.659 trillion bbl, which in addition to the undiscovered and field-growth assessments includes estimates of 859 billion bbl of remaining reserves and 539 billion bbl of cumulative production. It puts the ultimately recoverable, non-US gas resource at 13.493 quadrillion cu ft, including 4.621 quadrillion cu ft of reserves and 898 tcf of cumulative production. The US figures: undiscovered resources, 83 billion bbl of oil and 527 tcf of gas; reserves growth, 76 billion bbl and 355 tcf; remaining reserves as of Jan. 1, 1996, 32 billion bbl and 172 tcf; and cumulative production as of Jan. 1, 1996, 171 billion bbl and 854 tcf.
The new estimates mean that much exploration and development remain to be done. And growth in the oil numbers from the former USGS estimate shows that the relevant constraint on future supply at this point in history is what people know about the subsurface, not how much oil and gas nature put there.
