Stocks: Measuring the Resource Endowment

Gautier et al. (this volume) review what is known about the stocks of energy resources, comprising all potentially recoverable fossil energy, including coal, conventional oil and natural gas, unconventional oil (e.g., tar sands, oil shale, and extra heavy oil), unconventional natural gas (e.g., in shale, tight sands, geo-pressurized aquifers, and coal beds) (Nakicenovic et al. 1998). Energy stocks also include uranium for producing nuclear energy. Renewable energy sources are part of the resource base but are more appropriately characterized as flows. Energy stocks are not constant but constantly changing.

Therefore, petroleum resources are periodically reassessed, not just because new data become available and better geologic models are developed, but also because many non-geologic factors such as technological advances, accessibility to markets, and geographic or societal constraints determine which part of the crustal abundance of petroleum will be economic and acceptable throughout some foreseeable future (Ahlbrandt et al. 2005:5).

Stocks of energy resources are not a fixed number, but are perpetually changing as technology and economics redefine resources. Geologists have developed the concept of the resource pyramid as a way of illustrating how the quantity of resources relates to their physical properties, cost of extraction, and extent (Figure 20.4). The highest quality and most easily accessible energy resources are extracted first because their costs are lowest. However, lower quality, more costly resources are generally more plentiful. As technology progresses and energy prices rise, the more costly resources become economical. Geologists and energy resource specialists have also developed standardized approaches to measuring and reporting energy resource stocks according to the economics of their extraction and the certainty with which their extent is known (e.g., Rogner 1997). Of course, there are important issues concerning the consistency with which these methods are applied and their accuracy. Solow's definition of sustainability, cited above, implicitly requires that not only the quantity of

Figure 20.4 The resource pyramid (after McCabe 2007).

energy resources but their costs be measured. While existing approaches take cost into account, they do so in a very approximate way. It seems likely that a more rigorous treatment of costs will eventually be needed for measuring the sustainability of energy resources.

Measurement of the extent of current energy resources is hindered by incomplete knowledge of the physical world, lack of agreement on or adherence to consistent definitions of energy resources, the difficulty of predicting future economic conditions, and the relative novelty of measuring resource expansion (USGS reserve expansion, EIA Canadian Oil Sands redefinition) and even more so creation. Still, geologists and other scientists and engineers have made significant advances in refining definitions and the methodologies of their estimates, such that existing data are reasonably adequate to assess sustainability (WEC 2007a). Much more is known today about the structure and composition of Earth's crust than 50 or 100 years ago thanks to more extensive exploration and the application of advanced techniques, such as 3D seismic imaging, for exploring Earth's crust.

Over one hundred estimates of the world's ultimate resources of conventional petroleum and natural gas made over the last half century and collected by Ahlbrandt et al. (2005) are shown in Figure 20.5. Note that three of the more recent estimates include unconventional resources, such as oil shale or tight gas formations. Over the first thirty years there is a clear upward trend in the estimates. The 1980s showed a strong downward revision, which has been followed by a less pronounced upward trend.

Figure 20.5 Various estimates of the world's ultimately recoverable conventional oil resources (after Ahlbrandt et al. 2005).

No energy resource is measured perfectly. For example, the quantity of conventional petroleum resources is intensely debated and even the WPA-2000 assessment recognized a range of uncertainty of ±50% of the mean estimate as a 90% confidence interval (USGS 2000; Ahlbrandt et al. 2005). Still, nearly all of the world's energy resources have been measured well enough to support an initial retrospective assessment of sustainability.

Measuring Energy Resource Expansion and Creation

Energy resources are not only fungible but can be expanded and even created. Recent estimates of fossil energy stocks, such as the WPA-2000 estimates of global petroleum resources, attempt to quantify yet-to-be-discovered resources, as well as the likely expansion of known deposits as they are exploited. In the WPA-2000 estimate of the world's ultimately recoverable resources, remaining proved reserves, reserve growth and undiscovered resources are all comparable in size, as shown in Table 20.1.

Undiscovered conventional petroleum resources, the first component of the USGS (2000), were assessed on the basis of geology and exploration and discovery history (Ahlbrandt et al. 2005:5).

Reserve growth is estimated by statistical methods calibrated to experience with fi elds whose history of development is well documented and then extrapolated to the rest of the world (Klett 2005). Critics argue that this method is flawed because of inconsistent definitions of proved reserves in different countries, especially members of OPEC (Bentley 2002). They argue that if one uses petroleum geologists' original estimates of proved plus probable reserves, reserve growth is negligible. Proponents of the method counter that recent experience since the method was first applied show that, if anything, their estimates have been conservative. Clearly, this is an area in need of additional research and better data, especially from OPEC states.

The WPA-2000 assessment also explicitly measured uncertainty, providing 95th, 50th and 5th percentile estimates in addition to mean estimates (Table 20.1). Some of the uncertainty is a consequence of lack of knowledge about what lies beneath Earth's surface, and some is due to uncertainty about future technology and economic conditions. Expansion and creation of other fossil resources have been less thoroughly studied but enough useful information exists to make a start in measuring sustainability, as Gautier et al. (this volume) demonstrate.

In addition, energy resources can be created when technological advances reduce the cost of using renewable resources. Technological advances and learning-by-doing have significantly reduced the costs of solar photovoltaics, biofuels (especially from sugarcane), and wind energy over the past two or three decades (e.g., Goldemberg and Johansson 2004:51). In 2007, geothermal,

Table 20.1 WPA-2000 estimates of ultimate world oil resources recoverable by 2025 (USGS 2000; Ahlbrandt et al. 2005).

Oil (billion barrels)

Table 20.1 WPA-2000 estimates of ultimate world oil resources recoverable by 2025 (USGS 2000; Ahlbrandt et al. 2005).

Oil (billion barrels)

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