Apache claims to have found the biggest oil field in 30 years. Image credit: Apache.
I was reading this morning how excited some journalists were in reporting “the biggest oil discovery in decades”, and I got a little curios: how big is it? According to US oil company Apache, the field could have potentially up to 300 million barrels of oil in place – Australia gets a lot of oil, stock prices for Apache surge, nobody in Australia cares about global warming anymore, so everybody wins, right? But when you start to dissect things and put them into perspective, you see that things aren’t quite as good as Australia and Apache are making them seem.
Volleyballs and ping pong balls – Peak Oil is upon us
First of all, these are claims from Apache following prospection. It’s an estimate, and generally, these estimates tend to be optimistic. It could be the other way around and the field could be even richer, but that’s highly unlikely. If anything, history has taught us that oil companies tend to overestimate initial findings. Second of all, you never ever take all the oil out – it’s simply not possible. A pretty good extraction rate is 50%, while 60% is about as good as it gets. So let’s assume that you do have 300 million barrels of oil – optimistically, you’ll take out some 180 million. The average global daily consumption is 90 million barrels, and the annual Australian consumption is over 1 million barrels, so if somehow, magically extract all the oil tomorrow, you can power the entire world for 2 days, or Australia for almost half a year. That’s really good, that’s a huge figure and all the companies working on it will make billions in profit – but in the global picture, it doesn’t matter that much.
If you want to get a good sense of scale, here’s a good analogy: think of the world as a giant beach, and oil fields as volley balls and ping pong balls. Volley balls are bigger and much easier to spot, so you find those first. But after you do find them, you’ve got to focus on the ping pong balls – much harder to find, much harder to extract, and much smaller; this is exactly the case with oil fields at the moment. There are over 40,000 oil fields in the world right now, but 1,500 of them have 94% of all the oil! That means that under 4% of all the oil fields have 94% of all the oil in the world! Hey, and it all makes sense when you look at the biggest oil fields – the Ghawar Field in Saudi Arabia and the Burgan Field in Kuwait have over 70 billion barrels of recoverable oil! In total, they each have well over 150 billion barrels, so they’re about 500 times larger than the Australian find. As a matter of fact, an oil field is only considered a “volleyball” if it has over 1 billion barrels, so even by the most optimistic estimates, it’s not even close – so why are people so excited about this find?
The thing is, there’s one aspect in which the volleyball analogy doesn’t do justice to reality – it only gives a sense of relative scale. The truth is, even ping pong balls have huge economic value. Again, we’re talking about billions of dollars in profit, and that’s not even all of it. Pretty soon we will reach (if we haven’t already) peak oil. Peak oil is the point in time when the maximum rate of petroleum extraction is reached, after which the rate of production is expected to enter terminal decline. Every oil field has its own peak oil, and of course, you can discuss the same concept at the global scale, so finding new reserves is harder and harder – and will become even more so in the near future.
Tony Abbott’s Australia – an environmental disaster
Australia’s PM will definitely be thrilled about the find. Image via Huffington Post.
I couldn’t possibly discuss Australian energy without mentioning the anti-scientific and anti-environmental measures taken by prime minister Tony Abbott. Usually, I tend to avoid discussing politics, because it’s a complicated subject, one in which I’m not very knowledgeable and in which it’s often hard to reach a consensus. But you see, Tony Abbott has antagonized himself to such a degree that I want to talk about him. As a European, the first time I really paid attention to him was in 2011, when he demonized climate action as “socialism”; that’s right, he even went as far as describing carbon price as “socialism masquerading as environmentalism“, something which he proceeded to repeat several times at various meetings. But in 2012, he really made things happen: he pushed forth an initiative to remove the carbon tax, making Australia not just the only country to ever abolish a carbon tax, but the only developed country without a carbon tax! He subsequently removed funding from environmental research, renewable energy, and science all around. Basically, he believes that science funding is not a necessity, but rather an unneeded whim, or even an obstacle. Because the truth is, the science disapproves with him – and like any other self-respecting tyrant, he is trying to remove any opposition.
But as the old saying goes, if you want to find out how things really are, you should follow the money; and a new article in the Guardian reports that Tony Abbott’s push to ditch renewables could hand coal and gas industry $10bn, basically scrapping Australia’s renewable sector, even though Australia could, realistically go 100% renewable in 10 years and wind power is already cheaper than fossil fuels there.
“We have to accept that in the changed circumstances of today, the renewable energy target is causing pretty significant price pressure in the system and we ought to be an affordable energy superpower … cheap energy ought to be one of our comparative advantages,” the prime minister said last year.
However, studies have clearly shown, as the Guardian explains, that “reducing the Renewable Energy Target would not cause power bills to fall and may make them rise in the longer term”. Shifting 10 billions from one eco-friendly, sustainable and growing industry to a declining, polluting industry with ever growing prices does indeed seem like a bad idea.
Other things that mister Abbott has done in his anti-progress crusade is speak against gay marriage and gay relationships in general, try to close the borders to immigrants as much as possible and prevent the creation of any new Natural Parks, saying that he believes ‘[wood] loggers are the ultimate conservationists‘. Seriously, it’s like he’s trying to become a cartoonishly evil character. But hey, don’t take it from me – here he is getting owned by a bunch of smart highschool students.