(Aleklett’s Energy Mix) This year’s big news regarding the reporting of oil reserves in World Energy Outlook 2015 is that this annual report now discusses “resources that are technically possible to produce” and what proportion of these are proven reserves. When I was working on Chapter 17, The Peak of the Oil Age for my new book a few weeks ago I discussed the difference between technically producible resources and reserves. To support that discussion I made a figure explaining how different types of crude oil are classified.
All the oil formed millions of years ago is termed, “Total Petroleum Initially in Place (PIIP). We have now found most of the world’s producible oil but there are still some oilfields yet to be discovered. (Details on this will be found in the book.) Of all the oil that we have already found there is some that cannot technically be produced, i.e. is “unrecoverable”. The remaining oil is divided into two classes – non-commercially producible (Contingent Resources) and commercial oil. When describing oil reserves, 1P is that which will be produced with 90% certainty, 2P with 50% certainty and 3P with 10% certainty. In the image above, the yellow field and the “green” commercial oil are those termed, “resources that are technically possible to produce”. It is this volume that the IEA has now begun to promote as a shield against future declining oil production. Let’s now look at Table 3.4 from WEO2015.
First, we can note that there is no longer any detailed classification of different type of reserves. Only one reserve number is given – “Proven Reserves”. Therefore, we cannot see whether these reserves are conventional oil or unconventional oil (or both). Instead, we see a display of various classifications of resources. The IEA justifies this new system of describing oil yet to be produced by saying that one usually does not distinguish between conventional and unconventional oil reserves. This is correct if one studies the BP Review of World Energy or the Oil&Gas Journal, two sources that the IEA cites. However, the reserves these sources refer to are not 1P reserves. At the same time, the IEA states that Proven Reserves are those with 90% certainty to be produced (1P). The 1P, 2P, 3P reserve system is commonly used for crude oil.
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