Last December the Energy Information Administration (EIA) released its latest estimate of U.S. Crude Oil and Natural Gas Proved Reserves. Although natural gas reserves rose, the real story was crude oil reserves. The EIA reported that U.S. proved reserves of crude oil and lease condensate had increased for the fifth year in a row, and had exceeded 36 billion barrels for the first time since 1975:
There are two reasons for this increase in proved reserves. The first is that despite >150 years of oil production in the U.S., new fields are still being discovered. In March 2015 the EIA released its update to the Top 100 U.S. Oil and Gas Fields as a supplement to the December report. This was the EIA’s first update on the Top 100 fields since 2009. The most significant addition to the list was the Eagleville field (in the Eagle Ford Shale), which was only discovered in 2009 but is now the top producing oil field in the U.S. In addition to the Eagleville, there were 4 other fields in the Top 100 that were only discovered in 2009. Several others in the Top 100 were discovered in 2007 and 2008.
But the largest additions to reserves weren’t via new discoveries at all. The largest reserves additions have been a result of rising oil prices, and this is a source of frequent misunderstanding on the topic on reserves. CONTINUE»
A few years ago, I made the observation that the best thing that could happen to mitigate against some of the potentially severe consequences of peak oil was for oil prices to rise, and remain high in the years before oil production peaked. That would have the effect of encouraging conservation, as people adapted to a world in which oil is no longer cheap. High oil prices would also incentivize oil production, which would have the effect of preventing steep declines in global oil production — which some had predicted would lead to severe economic crisis or possibly economic collapse.
We have certainly seen both conservation and increased oil production, but I have been really surprised by some of the details of how it has happened.
For example, as oil prices raced to $100, consumption in the US and Europe declined as I expected. But consumption in all developing regions increased sharply — so much so that the net impact was for global consumption to increase.
(Read More: Petroleum Demand in Developing Countries)
I didn’t expect this; rather I expected that we would see oil consumption decline across the board.
A study on energy supply conducted by a German military think tank reports on the potential for serious consequences as oil production declines.
BP admitted last week that the SEC and the Department of Justice were conducting “informal inquiries into securities matters arising in relation” to the offshore rig explosion and subsequent spill.
Hayward’s new position will be as a non-executive director on the board of TNK-BP, Russia’s third-largest oil company.
Robert Dudley, currently heading BP’s Gulf Coast restoration efforts, is seen as Hayward’s most likely successor.
China consumed 2,252 million tons of ‘oil equivalent’ last year, which is about 4 percent more than the U.S. consumed.
An image still from BP video footage shows the new containment cap placed on the leaking oil well.
An internal BP document released by Congressman ED Markey (MA-D) today revealed that the worst-case scenario spill rate could be 100,000 barrels per day.
Investors sold BP shares in a panic last week, as risks came to light that were obvious a long time ago.