Doubling Oil Reserves

It seems appropriate to wrap up an "oily" week talking about something I haven't covered before. There's a relatively short list of key assumptions that go into calculating when oil supplies might peak. This includes the total endowment of oil in the earth's crust, and thus how much oil remains to be discovered, the rate at which production from existing oil fields will decline, and the fraction of existing oil that can be recovered using current technology. The last of these turns out to be more important than you might think, since we can currently only extract about a third of the oil we find, leaving the rest in the ground when we abandon a well. (Some fields achieve much higher recovery using water, steam and chemical injection, but these have been the exceptions, not the rule.) A dramatic increase in the average recovery rate would push a peak in production way out, even if pessimists are right about the total oil endowment. An article in MIT's Technology Review describes how this might be done.

They suggest that combinations of acoustic, chemical and biological stimulation might even double the oil that can be recovered from existing deposits. The significance of this would be on a par with the development of deepwater drilling. Other than just the gross addition of reserves, it would have some very interesting implications for energy security and the environment:

• In contrast to the largest remaining untapped hydrocarbon reserves, which tend to be heavy and high in sulfur, or require physical separation from their source rock--think oil sands and oil shale--most of the today's production is relatively high quality and easy to process. Extending the lives of these fields, or giving them a new lease on life, would result in a lower requirement for refinery upgrading and produce fewer greenhouse gas emissions compared to "mined & manufactured" oil.
• At the same time, this kind of technological advance could extend the lives of mature fields in the most stable areas of the world, such as North America and the North Sea. With supplies in Venezuelan, Russia, and West Africa becoming more politically challenging by the day, that would have huge geopolitical benefits for the US and Europe.
• The potential benefits for employment and trade balances are similarly positive.

Before we get carried away, however, it's worth noting that I didn't see anything in the MIT article suggesting that we are on the verge of the Holy Grail of enhanced recovery: the ability to go back into abandoned oilfields and pump similar amounts out of them to what they produced in their heyday. The cost of re-drilling an abandoned well is close to that of drilling a new deposit, and the rewards much lower, even with sexy new enhanced recovery technology. What abandoned wells have going for them, however, is low risk. We know there is oil there, unlike "wildcat" prospects, where the success rate is something like 1 in 8 or 1 in 9, i.e. 7/8 or 8/9 dry holes (or uneconomic discoveries.)

Reincarnating old fields would be a big deal, because the US has already produced about as much as Saudi Arabia, roughly 180 or 190 billion barrels since Drake's Well. If we could add that much again to our reserves, the world would be a different place. But even if we can only double the reserves we have left now, adding an extra 20 billion barrels would give us a lot of negotiating leverage and buy us the time needed for biofuels and other alternatives to scale up.