Presentation at the DGMK/BGR event "Geosciences in Exploration and Production: Information exchange for research and Industry", 23.05.2000 in Hannover

It is well known that oil and gas are finite resources representing stored solar energy. Consumption of these resources is reaching recently huge dimensions. Yearly we are consuming so much oil and gas as the nature produced in several million years.
In the light of different, particular  contrary statements to the availability of oil and gas the question arises, how long the hydrocarbon era will continue? Figure 1 shows  schematically the oil production in the time frame between birth of Christ and the year 2500.  In this scale the hydrocarbon era is a short episode.

At the beginning we will define some terms, such as crude oil , natural gas, reserves and resources for your better understanding.

Hydrocarbons are subdivided as follows:

As agreed reserves are defined as hydrocarbon quantities which are proven in fields and can be produced economically with known techniques. Usually these are under normal conditions about 30 to 50 percent of conventional oil and about 60 to 90 percent of conventional gas, which are initially in place.

Resources are defined as those quantities of hydrocarbons,

• which are geologically detected, but can’t be produced economically under present conditions as well as those
• which aren’t detected, but can be expected due to geological reasons in equivalent regions (yet to find)

Figure 2 gives an impression of the estimates on the development of the estimated ultimate recovery (EUR) for conventional oil obtained from different authors as well as the development of reserves and cumulative production since 1940. 
As you can see, there is an increase of EUR estimates which corresponds with increasing reserves to the early 1980-ies followed by estimates levelled between 200 billion (109) tons (1,470 bn b) and 400 billion tons (2,940 bn b). According to BGR (1998) the figure for EUR is around 350 billion tons  (2,570 bn b). Extreme figures are given by Campbell (245 bn t ; 1,800 bn b) and Odell (400 bn t; 2,940 bn b). The latest estimates of the USGS (2000) results in about 450 bn t (3,300 bn b) for conventional oil including NGL. This estimate include as a new category “reserve growth”, which is comparable to the amounts of resources. In figure 2 it is an  asymptotic convergence of the EUR estimates to a maximum value. Areas with expected oil fields are well known and distribution of oil fields are limited by depth and temperature. Therefore we can’t expected sensational discoveries of new oil fields. An important factor for an increase  of the EUR could be a higher recovery from known fields, higher than the common recovery between 30 and 50 percent. This will depend on progress of enhanced oil producing technology and better understanding of reservoirs as well as on the oil price level. In the next 10 to 30 years the point will be reached where half of estimated EUR for conventional oil is produced (“depletion mid-point”) considering oil production at the current  level ore rising. Passing the depletion mid-point the oil production will continuously decrease.
Figure 3 shows an analogue picture for conventional gas. 
It can be recognised, that the EUR estimates in the last years differ between 350 (12,350 tcf) and 500 trillion (1012) m³ (17,650 tcf). According to BGR (1998) the figure for EUR is 439 trillion m³ (15,500 tcf), and in reconciliation  to the newest published USGS figure of 436 trillion m³ (15,400 tcf). Increase in EUR-estimates for natural gas since 1980 results equally from increment of reserves and (additional) resources. This increase could be a result of intensified exploration in relation to gas due to raising oil prices in the previous years as well as a better understanding of natural gas systems. World-wide effort for a wider utilisation of natural gas definitely influenced this process. Further exploration for natural gas was accelerated for reasons of environmental protection and diversifying sources of energy supply. Differing from oil the plateau for EUR-estimations is not yet visible. This shows, that the exploration for natural gas is less mature than exploration for oil.

Figure 4 and 5 give an impression of the lifetime of oil and gas considering different growth scenarios. Starting point is the EUR-estimate for conventional oil and gas at year-end 1999. EUR is divided into cumulative production, reserves and resources. Additionally, the cumulative production within the next 25 years at different growth rates (from 0 to 6 percent per year) is shown.
Figure 4 shows the increasing critical situation for conventional oil. The production peak will be reached in the near future with the depletion mid-point in period 2010 to 2020. About half of the remaining (reserves plus resources) oil would be produced and all now known reserves nearly consumed within the next 25 years at a growth rate of 2 percent, which corresponds to the IEA forecast (IEA 1998). Nearly all of the remaining conventional oil would be consumed to the year 2025 considering a growth rate of 6 percent. This scenario is unrealistic in view of approaching depletion mid-point.

The situation for natural gas is more favourable (fig. 5). Due to the later onset in production only 15 percent of EUR of natural gas is consumed in respect to 35 percent for oil. This can be explained with the later start of gas utilisation compared to oil. Only 35 percent of EUR will be used in 2025 at an annual growth rate in production of 3 percent, which corresponds to the IEA forecast and is comparable with the current situation for conventional oil. Even at a growth rate of 6 percent per year the depletion mid-point would be exceeded. Furthermore, the depletion mid-point isn’t so important for natural gas as for oil. The production level for gas can be sustained nearly constant for a long period and beyond the depletion mid-point due to another expiration curve of long-term plateau-production.

The regional distribution of EUR for conventional oil is given in figure 6.  The Middle East owns the largest potential followed by CIS and North America. Remark, that in North America more than half of EUR is already produced, in the CIS about one third and in the Middle East one fifth respectively. OPEC accounts for 73 percent of the world oil reserves and 26 percent of the resources, the Middle East for 61 percent of reserves and 20 percent of resources.

Figure 7 shows the regional distribution of EUR for conventional natural gas.  CIS has in contrasts to conventional oil the greatest EUR of natural gas followed by Middle East and North America. Note, that in North America about half of EUR is already produced, in the CIS about 10 percent and in the Middle East only few percents.
 
 

An overview of the countries with the biggest oil and gas reserves is given in figure 8 and 9.
 

Fig. 8	Fig.9

Saudi Arabia is dominating in oil, CIS and Iran are dominating more in gas. About 70 percent of known world oil reserves fall inside a “strategic ellipse”, spreading form Middle East to Western Siberia. Regarding natural gas about 65 percent of world reserves fall inside this “strategic ellipse”, but extending somewhat more to the north.
The European natural gas market  (Fig.10)extends to Russian Western Siberia and Kazakhstan in the east and to North Africa in the south. The consumption of natural gas in the European market was in the last years at a level of  1 trillion (1012) m³ with minor variability. About three quarter of supply comes from only four countries: Russia, United Kingdom, Netherlands and Algeria, whereby Russia produces about half of this quantity. About 350 billion m³ (c. one third) is traded cross-border. The transport is realised nearly exclusively by pipeline, only 25 billion m; are exported as LNG by Algeria and Libya. Russia is in an exceptional position in relation to reserves and resources. Turkmenistan, Kazakhstan, Algeria, Norway and Netherlands have important reserves and resources of natural gas.
Static lifetime is the quotient of actual reserves and last production given in years. It describes only an actual state of knowledge (picture of recent moment) in a dynamic process. In this process the primary values, i.e. reserves and production are always changing. Progress in exploration and production is adding new reserves, faster production decreases reserves as well as production depending on demand and production capacities. By economic reasons reserves are held on a constant level, which will secure a fluent production ( about 20-30years for oil and 30-40 years for gas). From historic point of view static lifetime for oil and gas was more or less constant without significant fluctuations especially during the last years. That is explained by the fact, that hydrocarbon exploration is very cost-intensive and oil companies are only exploring to this extent to maintain and secure production. This trend continues so far as the resource base is adequate and the oil price gives a financial incentive level for further exploration.

In the past, forecast of static lifetime for oil and gas was usually wrong and as a rule too short. Therefore, conclusions on static lifetime must be appraised very critically, especially those done without knowledge of causalities of hydrocarbon exploration and production. This applies especially in the case of ending reserves as production doesn’t stop abruptly and is going down slowly. On the other side a shortage of oil by continuing demand will lead to rising prices, which will trigger development of marginal and sub-marginal fields as well as exploration in immature regions and for deeper horizons. This applies to conventional oil and gas but for longer term surely in part for non-conventional oil and gas also.

Figure 11 gives an overview of static lifetime for non-renewable energy resources in 1998. The static lifetimes amount for conventional oil 42 years, for conventional plus non-conventional oil commonly about  81 years and for natural gas about 65 years. The static lifetime for hard coal amounts more than 160 years, for lignite more than 200 years and for uranium only 37 years. When we include resources, the static lifetime for the remaining potential (reserves plus resources) will be c. 63 years for conventional oil and c. 160 years for conventional natural gas. Corresponding values for all other energy resources are higher than 200 years, the highest values have coal and non-conventional natural gas, especially for resources of gas hydrates. Those are average values for the world and don’t inform about regional or local country situation. So values for static lifetime of oil reserves in most OPEC-countries are obviously higher than 50 years, for OECD-countries it ranges between 10 and 20 years.
 
 

Figure 12 shows different forecasts for oil production. Therein forecasts for production of conventional oil as well combination of conventional and non-conventional oil is shown. Most curves show that in the period from 2010 to 2020 the maximum of oil production will be reached. Only the Odell curve (2) differs from the common picture and forecast a maximum at 2070 based on  production of conventional and non-conventional oil with EUR of 800 billion tons.

The  historic development of the world population and energy demand on fossil fuels since 1800 as well as a possible scenario to 2010 is given in figure 13.It can be concluded, that oil production will peak in the fist half of 21st century, gas production in the middle of the century, perhaps also later. The absolute coal production can increase although the share on primary energy consumption is falling.

The gap between rising energy demand and decreasing oil and timely later decreasing gas production can be filled only partially by non-conventional oil and gas reserves. Although the potential of non-conventional oil and gas regarding existing estimates is higher than the potential of conventional oil and gas.  High production costs, technical and environmental problems are the main reason for slower production of non-conventional hydrocarbons. On this background and with respect to climate debate an economic use of oil and gas is essential. Search for alternative energy sources is a priority task.

Summarising we can notice, that

• hydrocarbons are presently and also in near future the leading energy sources,
• a shift from oil to gas will occur in the future,
• hydrocarbons are a finite resource despite a lifetime for many years,
• an economic use of oil and gas is essentially.
• oil and gas trade is very important, as regions of supply and demand for oil and don’t correspond,
• problems are

-political influence on hydrocarbon trade,
- uncertainties of energy prices,
- greenhouse effect.
• in view of these facts substitution of oil and gas through other energy sources is needed.