Are we running out of oil or not?
peak watch | 03.02.2006 09:51 | Analysis | Ecology | World
Anyone who has been reading up on the issue of peak oil will know the question is not whether we are running out of oil but rather when we will find that extraction levels start to decline and we can no-longer extract oil fast enough to meet growing demand. In response to Bush juniors pathetic state of the union address yesterday, Royal Dutch Shell have claimed that the world was nowhere near to running out of oil. At the same time, Shell, the world's third biggest oil and gas company, announced record profits for any British company, nearly £13billion ($23billion). Their profits are up 30% thanks to inflated oil prices and compare well to $22billion forecast for BP next week.
But what of peak oil? Jeroen van der Veer, Shell's chief, claimed world oil and gas production was nowhere near peaking because of the potential of untapped reserves made economic by the higher oil price.
He added, "There is the theory of 'peak oil' - that the big discoveries have all gone. But we don't know where the peak will come with oil sands. With oil shale, we have not yet started. There will be many peaks in many time frames."
Never-the-less, Shell's production last year fell from 3.7m barrels a day (bpd) to 3.5m after hurricanes in the Gulf of Mexico knocked out some platforms. Militant protests are also affecting the company's interests in Nigeria, knocking out at least 100,000 barrels of oil production per day. Shell was working to bring full production back on stream, it said. It admitted it only replaced six or seven of every 10 barrels the company extracted last year, up from five out of every 10 in 2004.
It stuck to a target of averaging a "reserve replacement ratio" of more than 100pc, a figure it last surpassed in the 1990s, between 2004 and 2008, however. Shell is increasing capital expenditure to try to find more oil and gas, spending $19billion on looking for more hydrocarbons this year, compared with $15.6billion in 2005.
He added, "There is the theory of 'peak oil' - that the big discoveries have all gone. But we don't know where the peak will come with oil sands. With oil shale, we have not yet started. There will be many peaks in many time frames."
Never-the-less, Shell's production last year fell from 3.7m barrels a day (bpd) to 3.5m after hurricanes in the Gulf of Mexico knocked out some platforms. Militant protests are also affecting the company's interests in Nigeria, knocking out at least 100,000 barrels of oil production per day. Shell was working to bring full production back on stream, it said. It admitted it only replaced six or seven of every 10 barrels the company extracted last year, up from five out of every 10 in 2004.
It stuck to a target of averaging a "reserve replacement ratio" of more than 100pc, a figure it last surpassed in the 1990s, between 2004 and 2008, however. Shell is increasing capital expenditure to try to find more oil and gas, spending $19billion on looking for more hydrocarbons this year, compared with $15.6billion in 2005.
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