4 trillion barrels of oil: 22-model avg estimate of URR-EUR (ultimate recoverable resource)

April 18 2011 delayed FreeVenue public release of Dec 25th guidance @ Trendlines Research MemberVenue

 URR/EUR Highlights:

Oil Initially in Place (OIIP): 19-Tb.

URR avg: 3,991-Gb (doubled since 1995)

Remaining Resource: 2,731-Gb (doubled since Y2k)

Inferred Depletion: 32%

Remaining Resource/Annual Production Ratio: 87 (record low: 44 in 1995)

Proved Reserves: 1,268-Gb (doubled since 1978) & growing by 38-Gb/yr

Past Consumption: 1,260-Gb (to 2010/12/31)

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Today's compilation update introduces a URR study by Adam Brandt & Alexander Farrell of the USA. It updates figures from BP, Campbell, EIA, Husseini, IEA, Koppelaar, Laherrère, OGJ, Total, World Oil & my own Hutter Peak Scenario-2500.

Today's URR is 159-Gb higher than the average inferred within the last monthly update of our 20-model Tier-1 Scenarios Presentation. Its slightly different mix of practitioners has a URR Avg of 3,832-Gb. As most models are based on Proved Reserves ... not total economic resource, the Avg is substantially less than my own PS-2500, built on a URR platform of 6,986-Gb.

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Model Updates:

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The high 8-Tb estimate by Adam Brandt & Alexander Farrell foresees significant contributions to future All Liquids flow via CTL, Kerogen & especially GTL.

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We developed the composite production profile of our PS-2500 as a visual aid to better explain the relationship between varied resource categories and the contribution of each to annual flow. Each type of liquid has its unique profile and Peak Year. The 11 streams tracked as All Liquids include Regular Conventional Oil, NGL & Refinery Gain; and the non-conventionals: GTL, Deep Sea, Polar, Bitumen, X-Heavy, CTL, Kerogen & BTL (biofuels not incl in URR tally). RCO production peaked in 2005 and passed 50% of its URR in Dec/2007. All other streams are in growth mode.

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URR Growth Rate

Chart#2 compares the growth rate of the 22-model Avg with OGJ & BP. It is seen the recent high-price regime fuelled favourable economics of previously thought fringe contingent resources. Discovery, development and technology advancements (especially of non-conventionals) fuelled a growth pace of 136-Gb/yr (4.9%) after 1996. This far surpasses URR's growth of 30-Gb/yr (2.3%) from 1957-1995.

Unsustainable crude prices ($131/barrel high in July 2008) drove discoveries, exploration, and conversion of sub-commercial (contingent) resources over to the economic side of the ledger. But, sub $90 pricing has been a real dampener of that headiness. Viewed via the 3-yr rolling average of the 22-models, additions to URR peaked @ 290-Gb in 2008, the growth rate slipping to 165-Gb in 2010.

The chart shows annual augments to URR have exceeded Annual Consumption (32-Gb in 2010) since 1997. Proven reserves grew by 38-Gb/yr last decade and total 1,268-Gb today. This explains the hiatus from heavy exploration over the last two decades. The sector's supply chain is founded on a Proved Reserve / Annual Production ratio of 40 (years). Having attained that threshold in the early 80's, it has been necessary to only add just over annual consumption to hold this ratio steady.

Similarly, the Remaining Resource/Annual Production ratio was a near-record 87 in 2010. Back in 1996, available Resource would have serviced only 43 years of then current production. This aspect of economics has escaped the McPeakster fraternity. Their wild thesis that peak production occurs sixty years after peak discovery is completely unfounded. It is as ludicrous as their dogmatic position that URR & Proved Reserves grow in the OECD ... but not OPEC nations.