September 20, 2009
Arctic Has 13% Of Remaining Undiscovered Oil?

An article about the potential for oil discovery in the Arctic gives a sense of how much oil is left to be discovered.

The other man who knows interesting things about oil deposits in the Arctic is Donald Gautier, who works for the United States Geological Survey (USGS) in Menlo Park in the heart of Silicon Valley.

...

Comparing similar areas helps determine possible amounts of oil in other parts of the world. So where are structures similar to those found in the Arctic region? "In the case of northeast Greenland, you can say, for example, that the area is very similar to western Norway and the northern part of the North Sea," says Gautier. Since there is already significantly more data on these analogous areas than for the Arctic, researchers can use this information for modeling:

A total of 17 surveyed sites promise significant finds. There could be up to 90 billion barrels of undiscovered oil in the Arctic, representing 13 percent of the world's as yet undiscovered reserves.

Does 90 billion barrels sound like a lot? It is only 3 years worth of oil at the world's current burn rate. If that's 13% of the world's undiscovered oil then 692 barrels are waiting to be discovered and that's only 23 years at the current burn rate. But even if the world's current oil production rate could be maintained (and it can't) Westerners would see much less of that oil in coming years. The Chinese, with over 4 times the population of the United States, are now buying cars at a faster rate than Americans. China is setting up for a huge surge in oil demand growth. Currently China's oil consumption per capita is a tenth of US oil consumption per capita. The potential for demand growth in China is enormous. Also, India, with an even larger and more rapidly growing population is also industrializing. The $2500 Tata Nano is bringing car ownership within the reach of many more Indians and will help feed growing oil demand in India.

Even if the 90 billion barrel estimate for the Arctic is conservatively off by a factor of 2 or 3 it doesn't much change our problem with dwindling oil reserves. North American crude production peaked in 1985 and I do not expect Canadian and Alaskan Arctic oil production to enable a new North American oil production peak.

World oil discovery peaked in 1965, give or take a year. The consumption rate surpassed the discovery rate in 1981. High oil prices in recent years haven't caused discovery to approach the rate of consumption. We'd need a discovery rate higher than the current consumption rate to accommodate rising Asian demand while still maintaining Western consumption levels. Not going to happen. My advice: Make choices that will lower oil rate of oil consumption. Future high costs won't hit you as hard if you start adjusting now.

Share |      Randall Parker, 2009 September 20 12:34 PM  Energy Fossil Fuels


Comments
Paul said at September 20, 2009 5:34 PM:

I expect big increases in coal-based synfuel production in China. Methanol is a likely bet; it's already being blended with gasoline there (not entirely legally). Methanol is made from syngas, which can be produced by gasification of coal.

Shell has recently signed deals with Chinese firms to manufacture 95% of key equipment for Shell gasifiers locally in China. Already 2/3 of the operating Shell gasifiers are in China.

http://www.businessgreen.com/business-green/news/2249306/shell-chinese-coal-giant

bob said at September 21, 2009 7:03 AM:

It'd be nice if we had a govt committed to cheap energy. Instead we have leftist eco-nazi traitors like the scumbag Obama. Environmentalists hate people. It's just a nutjob religion for rich self-loathing white people.

Engineer-Poet said at September 21, 2009 10:24 AM:

Yeah, bob, if you get rid of the environmentalists you're going to eliminate depletion, the expense of tar sands and coal-to-liquids, and everything else that stops you from having buck-a-gallon gasoline for eternity, right?  Right?

</sarcasm>

John said at September 21, 2009 12:42 PM:

I think that a new technology will magically appear eliminating our need for oil.

Michael B. said at September 21, 2009 3:05 PM:

The reason that the price mechanism seems broken in the developing world is because it is. Nations like China and India subsidize the consumption of oil. As gas prices rise, consumers in those countries are still paying very little for oil because the governments are paying for the price increases. It's no surprise that people in these countries are not even trying to cut back on fuel consumption. Until, these countries roll back these harmful subsidies, nothing America or Europe does will have any effect on gas consumption. Any less gas the developed world consumes is just being consumed by the developing countries that are subsidizing it.

anonyq said at September 21, 2009 4:30 PM:

The developing world doesn't consume that much oil

Nick G said at September 23, 2009 2:11 PM:

Michael B.,

Just because your neighbor is wasting their money and ruining their health with cigarettes, is that a reason for you to?

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