What will the world energy picture look like in 50 years? How much oil and gas does the world have left? And what's the deal with these crazy prices?
Experts will provide their latest and best thinking on world energy resources and the future of energy use during the AAPG annual meeting in New Orleans.
Among those experts will be Thomas S. Ahlbrandt, World Energy Project chief for the U.S. Geological Survey (USGS) in Denver. Ahlbrandt said the USGS is completing its new assessment of conventional recoverable world oil and gas resources, to be released in June at the World Petroleum Congress in Calgary.
World undiscovered and reserve growth estimates as well as regional undiscovered estimates will be presented in New Orleans at the AAPG meeting.
Another resource outlook will be presented by William L. Fisher, professor of geological sciences at the University of Texas at Austin and former director of the Texas Bureau of Economic Geology.
Here's the good news: Both say the world has sufficient energy resources for the foreseeable future.
In fact, they're more interested in where those resources exist, and what will happen to energy demand and supply in coming decades.
Ahlbrandt hopes for a good response for the Survey's new assessment, officially titled "USGS World Petroleum Assessment 2000, Description and Results," Digital Data Series 60. It will be available starting in June in a free, two CD-ROM set, he said.
(World energy publications are available at http://energy.usgs.gov)
One disc includes text, figures, graphs, maps and charts laying out the assessment findings. The second disc contains archival data that can be loaded into spreadsheets, displayed, manipulated and reinterpreted.
"Readers might not agree with our results, so they can use the data and come up with their own, better estimates," Ahlbrandt said.
In the report, 159 Total Petroleum Systems (TPS) and their subdivisions into 270 assessment units (AU) were defined. Of these, 149 TPS and 246 AU were assessed in 128 provinces in 96 countries (plus two jointly held areas) in eight regions of the world.
Allocations to onshore and offshore regions also were made for assessed areas.
The resource assessment involved a team of 35 geoscientists cooperating with 38 organizations. Those included a number of oil companies.
"We thought we needed to stand up in front of these companies that are doing the work," Ahlbrandt said. "They provided us with insights into what they are doing, and even provided us with some of their proprietary data at times."
Additional information came from leading commercial petroleum databases. In assessing the data, the USGS used methodology reviewed and accepted by the AAPG Core and Executive committees, as well as other science bodies.
Based on initial analysis, overall estimates of undiscovered petroleum exclusive of the United States are up 9.5 percent compared to the previous USGS estimates in 1994. However, recoverable oil resources are up 24 percent from the Survey's 1994 assessment.
Natural gas estimates are down 10 percent, and natural gas liquid estimates are doubled. Additionally, substantial potential reserves were identified at the world level through the phenomenon of field growth.
This year the resource numbers will include upward revisions for field growth, or reserve growth, to recognize a well-known phenomenon in the industry.
"In any field development, when early on you don't know how big the field might be, you make a field estimate based on your knowledge at the time," he said. "Our experience has been that, when you look at a field through time, the reserve estimates increase."
Field growth estimates will follow an algorithm developed by the USGS and will be significant, though not as large as undiscovered resource estimates, Ahlbrandt said.
"Large fields tend to grow a lot," he noted. "We see it in all of our databases. For us to ignore it would be a fairly cavalier attitude on our part."
Field reserve growth has been documented in the Middle East and Africa, the Volga-Urals region and the West Siberian Basin, according to Ahlbrandt. North Sea fields will show less of a growth revision because they've been subject to more sophisticated exploration, he added.
Detailed reserve growth studies are being undertaken in these areas by the USGS to understand regional variations of this phenomenon, he added.
Fisher said he generally agrees with the USGS approach and data, but expects his own assessment of world energy reserves to be slightly more optimistic.
"We've got plenty of resources," he asserted.
He looks for a future of energy use that will be "as much demand-controlled as supply-controlled," basing his outlook on a series of assumptions about growth and development.
"Population is going to increase, though not as dramatically as some people expect," Fisher said. "The economy keeps on growing at a rate of about 3 percent per year, which it has done on a historical basis. We'll continue on with energy efficiencies, and those will probably increase.
"The bottom line is that demand will basically double by the middle of the century."
Demand growth will push energy use from oil to other energy sources, Fisher said. Coal replaced wood as a dominant fuel and then the oil economy largely replaced coal use, he observed.
Now he believes the world is "on the threshold of the methane economy," as natural gas becomes the fuel of choice.
"The first source is natural gas but it may eventually be from non-fossil fuel sources," he said, "and when that happens there will be much less demand for hydrocarbons. But most people don't expect that to happen for 50 or 60 years."
This series of fuel replacements produces environmental benefits, Fisher said, because just as coal gave way to less-polluting petroleum, cleaner-burning natural gas will now have a greater part in the energy mix.
Oil price fluctuations can impact industry activity levels, which influence resource projections, Fisher noted. Exploration and development budgets declined sharply as oil prices plummeted in 1998.
"That has a very stultifying effect on drilling, and the reduced drilling has an effect on reserve additions. On the other hand, when prices go way up like they did in the early 1980s, a lot of inefficiency comes into the system," he said.
"We're always hoping for an optimum, sustainable price, which people seem to think is around $25 per barrel. If you've got an optimum price, the thing that allows us to add new reserves is technology."
Ahlbrandt advocates a production-plateau model of oil resources as opposed to the well-known Hubbert bell-curve model.
A symmetrical rise and fall in world oil production would not reflect industry practice, he said.
Instead, field development typically goes through an initial phase of "getting up to production," Ahlbrandt observed.
A field operator then will attempt to maintain production levels until economics favor sale or abandonment.
"The idea of a simple peaking of production is not how fields are managed or reservoirs are managed. You want to bring production up to a level you can maintain for as long as you want to employ your capital," he explained.
Societal interests also favor the plateau model, Ahlbrandt said, especially in countries with substantial production and national oil companies.
As a result, production tends to be extended, leveling off instead of rising and then falling off. "Field growth is an extension of that idea. We add reserves where we once thought reserves would decline," he said.
Another notable feature of the world's petroleum resource is its growing maturity, Ahlbrandt said. That has a number of consequences, including the likelihood that a larger percentage of world oil production considering the large reserve growth potential will come from countries containing sizable reserves.
New deep water provinces provide significant opportunities and geographically diverse opportunities for undiscovered resources.
"There is a maturity in the world of petroleum. Some individuals believe in an imminent crisis and we don't share that opinion," he said.
"But there is a maturity setting in. And that weighs on us heavily."