Oil Production

Conventional oil

• Oil prices are set by supply and demand in the world market, and by oil trading on global financial exchanges.
• The world consumes approximately 85 million barrels of oil per day. Proven (P95) and probable reserves (P50) are approx. 1,200 billion barrels. This means that at current production rate oil will suffice for 38 years.
• IEA's newest estimate of depletion of global conventional reserves is 6.7% annualy. This means 16 years only.
• Reserves are stated by oil companies, oil exporting countries and importers. All have incentive to overstate.
• Three years ago, the OPEC countries had spare production capacity of 6 million barrels per day that could be brought online in times of emergency to keep prices down. This spare capacity is down to 2 million barrels per day—nearly, all in Saudi Arabia. In coming years demand growth rates will severely test producers’ capacity to bring enough new oil online.
• It generally takes seven to ten years to move from oil discovery to production.
• New discoveries in 2009 are close to 10 billion barrels as result of exploration investments made earlier in the decade.
• The total costs for drilling tripled between 1990 and 2004.
• OPEC covers now only 30-35% of global oil production.

Non-conventional oil

• Non-conventional oil means tar sands, oil shale, and heavy oil that cannot be pumped the way conventional crude oil can.
• Counting oil shale and oil sands, the US Department of Energy estimates that North America’s non-conventional oil reserves total nearly 4 trillion barrels. The heavy oil reserves in Venezuela are estimated at 1.3 trillion barrels.
• The extraction process is technically difficult and more expensive than conventional crude oil production. Nonetheless, production costs for tar sands oil have fallen to around $15 per barrel, making them a viable fuel source at today’s barrel prices (around $70). Similarly, Shell Oil has found a way to extract oil from oil shale that is competitive at world prices of $30/barrel. For heavy oil main problem is given by the high sulfur and metal content.
• For example, Orinoco extra heavy oil contains 3.5% sulfur as well as vanadium and nickel. Heavy crude oils contain more carbon in relation to hydrogen, thus releasing more carbon dioxide (a greenhouse gas) per amount of usable energy when burned. Heavy crude refining techniques may require more energy input, though, so its environmental impact is presently much more significant than that of lighter crude. With present technology, the extraction and refining of heavy oils and tar sands generates as much as three times the total CO2 emissions compared to conventional oil, primarily driven by the extra energy consumption of the extraction process (which may include burning natural gas to heat and pressurize the reservoir to stimulate flow). Current research in to better production methods seek to reduce this environmental impact.
• According to Rühl, BP’s chief economist, the main limitations for oil availability are "above ground" and are to be found in the availability of staff, expertise, technology, investment security, money and last but not least in global warming. The oil question is about price and not the basic availability. His views are shared by Daniel Yergin of CERA (Cambridge Energy Research Associates), who added that the recent high price phase might add to a future demise of the oil industry - not of lack of resources or an apocalyptic shock but the timely and smooth setup of alternatives

Sources

"Citizens' Alliance for Resposible Energy"
"Wikipedia - Peak Oil"
"Chart - OPEC declared reserves"
"New York Times - Oil Industry Sets a Brisk Pace of New Discoveries"
"International Energy Agency - World Energy Outlook"
"Energy Information Administration - International Energy Outlook"