Oil Reserves

The Peak Oil crowd probably hate stories like this:

“Exxon Mobil (XOM) announced today that in 2009 the company’s proven reserves increased by 133% of the amount of oil produced. . . . Amazingly, Exxon, who has been accused in the past of being too conservative in terms of exploration and development, has been finding more oil than it produces for each of the last 16 years, to the dismay of peak oil proponents.”

When people talk of oil reserves, they generally mean known or proven oil reserves. To suggest we are running out of oil based on known reserves is somewhat shortsighted, since our known oil reserves have consistently increased, despite exponentially increasing consumption. Oil exploration is an expensive process in itself – and so known reserves will continue to increase incrementally based on price/demand.

12 thoughts on “Oil Reserves

  1. And think how aggrieved the Canadians must feel! They will be the equivalent of Saudi Arabia, when the world turns to shale oil. But all these new finds keep pushing their day in the sun further and further away…

  2. I think tar sands are bigger in Canada… the US has loads of shale – as in an estimated many multiples of Saudi Arabia – atm, it’s just to pricey to extract.

    Technology and innovation will bring that price down over time – but it will still be competing with the conventional stuff for a while yet.

  3. Was looking at the price futures for coal today. The trend is up. Any enterprising alternatives are going to have a slightly easier time competing. Maybe we should take another look at nuclear.

  4. Fleeced:

    One thing. I’m not in the peak oil crowd by the way as I think it’s a load of crap, has been proven wrong and oil&gas extraction is really just a function of technology.

    However you need to be careful about firms like Exxon and their so called “proven reserves”, as they pad the books a lot. Recently they acquired a firm with large proven gas reaerves which some participants think was done so they’d pad their number and look good as stock players also look at the reserves of companies like Exxon etc.in terms of stock valuation.

  5. Maybe we should take another look at nuclear

    Now that Obamessiah thinks nuclear is OK, KRuddy is going to look pretty stupid maintaining his opposition. If Abbott is actually as smart about that as he appeared to be on climate change, he could wedge KRudd.

  6. @JC – that’s a good point… but the total reserves in general have had an increasing trend. Of course, price fluctuates a lot more for a variety of reasons.

    @TerjeP – Oil seems to be trending up, but I’m thinking Stossel will still win his bet with Pickens…

    In early 2009, T. Boon Pickens offered a $10 bet to Tom Brokaw that oil prices would be over $100 in a years time… Brokaw didn’t take the bait, but a couple weeks later, Stossel publicly offered to take him up on it if he raised it to $10,000. Pickens agreed, but gave himself some wiggle-room by extending the deadline to his birthday – on 22/May/2010. At the moment, Stossel still looks good to collect.

  7. Rudd made his opposition to nuclear a plank of his last election campaign… makes it mighty hard for him to backpedal.

    Abbott just has to say he’ll remove obstacles to allow states to pursue it as an option if they choose to… if he does that, most states (esp ALP ones) will probably come out and say, “no way”, which will actually play into his hands – since those voters who are opposed will see no risk, and those who are for it will see it as a step forward.

  8. I think nuclear opposition is widespread but pretty soft. Only a few people are fanatically opposed. Most are just pragmatically opposed. Even some welded on ALP lefties I know say that nuclear shouldn’t be ruled out. I think the political strategy that Fleeced suggests above is a good idea.

  9. The Ruddbot continues to say not to nuclear power- I wonder what the opposition says on nuclear power?

  10. A great place to talk nuclear energy is at Barry Brooks blog.


    He is a strong proponent of the AGW theory but a quite reasonable guy with a good capacity for listening and constructive debate. He recently debated Lord Monckton at the Brisbane Institute and I was struck by how respectful and gracious he was towards his opponent. Monckton reciprocated.

    Fans of small reactors are common at the Barrys blog.

  11. It seems to be a useless task. But I will again point out that the peak oil model is about daily output. Its not a model to do with oil still in the ground.

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