By Will Smale

20-04-04

Oil is making headlines again. Never far from newsworthy, such is its over-riding economic and political importance, the spotlight has returned as harsh as ever.

The price of benchmark US light sweet crude recently reached its highest level for 13 years, and the cartel of petroleum exporting nations, OPEC, maintained its decision to cut production -- potentially fuelling yet more rises.

Add increasing violence in Iraq delaying its return to full oil production, and it is understandable that oil analysts have been getting the jitters. Not to forget President George W. Bush, who in an election year really does not want to see car-loving Americas moaning about high gasoline prices, which have also risen as a consequence. And oil giant Shell already admitting twice this year that it has over-estimated its own oil reserves.

But looking behind the politics and other reasons for the upward pressure on prices (such as historically low oil and petrol stockpiles in the US), just how much oil is left under the surface of Planet Earth?

Technological advances

Loads -- or more than 1,000 bn gallons of proven (we know for sure) reserves to be precise, up to 40 years' worth. Add that still yet to be discovered, and the figure and timescale is much higher still. Yet before you go out and buy your own oil-fuelled power station, there are two small cautioning factors.

Firstly that the world is consuming oil as fast as it can get its hands on it (75 mm bpd rising to 120 mm by 2030 according to the International Energy Agency); and secondly, will it be economically viable or technically possible to get our hands on all the remaining oil?

Bruce Evers, oil analyst at Investec Bank, says trying to determine how many more decades of oil the world can enjoy is like asking the question “how long is a piece of string?”.

"Technology has improved so much over the last 10 to 15 years that companies can now get at oil reserves that previously would have been considered impossible." he said. "And over the next decade or so even better technologies will no doubt come on stream. For example, engineers can now take 3D or even 4D seismic images to stretch existing reserves and aid the finding of new ones."

"Obviously the future depends on continuing demand for oil, but there are a number of newly developing fields around the world -- such as Azerbaijan, Russia and Angola," Mr Evers added.

Oil remains pretty popular

The impact of ongoing technological advancements aiding oil exploration is the main factor put forward by Chris Hayes, of Cambrian Group, a Wales-based oil and gas consultancy whose engineers help the industry's main players find and best access reserves around the world.

"If you go back 20 to 30 years, firms were only able to drill for oil in shallow waters," said Mr Hayes, well operations business development director. "Today there are a growing number of deep-water projects." Mr Hayes added that while oil supplies would eventually dry up, thatpoint could be a century away.
"If you stand back and look at it totally objectively, it took millions of years to develop each drop of oil, which we now use in seconds, so it is 100 % certain that oil will one day run out," he said. "However, we have potentially got another 100 years of oil production. Yet as it becomes more scarce, prices will no doubt go up, and there will inevitably have to be a gradual move to alternative power sources."

It is this switch to alternative - and renewable - energy sources that Greenpeace has long campaigned for. Its argument is that because oil is a pollutant, reserves should be left in the ground.

"If all the remaining reserves were burnt it would cause massive amounts of pollution," said a Greenpeace spokeswoman. "Instead we need to be phasing out fossil fuels and moving towards renewable alternatives."
Yet such is the overriding reliance upon oil, it is going to require a seismic advance in alternative power sources for cars and other vehicles before this situation changes. Without such a development you can see countries and companies trying to get at the very last drop.

Source: BBC News