Oil: Orinoco Flow, Dirty Sand and Thirsty Empires

20 Second Summary:

• Three out of five of the worlds largest economies (EU, Japan and India) have almost no oil reserves. China are currently importing most of its oil, and USA will need to import most of its oil very soon.
• The demand of oil is rising and the supply will eventually fall. 
• I expect price shocks  and shortage of oil and oil-related products.
• Price shocks for oil will not save the climate - there is enough of oil, natural gas and coal to reach 450 ppm and above. Peak-oil is a second strong reason to stop wasting our resources and to stop heating our planet.

Oil Reserves, Consumption and Production Recovery
In this post, I will investigate the supply and demand of oil for different regions of the world.

I'll start with listing the countries with the biggest  GDP, reserves, production and consumption respectively. GTOE is a billion tonnes of oil equivalents and MTOE is a million of oil equivalent. The five largest economies are marked in bold. The +/- sign for production indicates whether the trend is clearly increasing or decreasing.

	Proven Reserves	Production	R/P	Consumption	R/C	Comment
	GTOE	MTOE	"Years"	MTOE	"Years"
Venezuela	47	108-	400	23-	2000	Collapse. Oil Sand reserves
Brazil (6)	2	142+	13	140	13	More imports. Soon no own oil.
Canada (7)	27	236+	96	103	264	Self-supplying. Oil Sand
USA (1)	6	571+	11	870+	7	Increasing dependency of imports.
Mexico	1	110+	9	83-	12	Increasing dependency of imports.
Saudi Arabia	37	562+	61	167	218	Self-supplying.
Iran	22	234+??	87	81-	248	Conflict with the US? Self-supplying.
Iraq	20	221+	90	38+	528	Production recovering from wars.
Russia (8)	15	554	26	148	98	Self-supplying. Arctic oil?
Quwait	14	146-	92	19-	735	Self-supplying
UAE	13	176	68	43+	190	Self-supplying
Norway	1	89	11	10-	90	Self-supplying but cannot feed Europe.
China (3)	2	191	18	595+	6	Increasing dependency of imports.
India (5)	4,5	40	14	221+	3	Increasing dependency of imports.
Japan (4)	0	0	-	181-	0	Total dependence on imports
EU (2)	1	69	9	624-/+	1	Increasing dependency of imports.
Other	34	1200		1200
Total World	240	4387	54	4470	53

R/P is simply the reserves divided by the production and can be interpreted as the rate of depletion. But as I mentioned in my previous blog post. the oil recovery/production will decline gradually as it gets harder and more expensive to recover the oil.

R/C is a hypothetical ratio between the reserves and the consumption. It indicates how many years of oil consumption a country has in its wells.

From the table, I can make some conclusions:

• The US oil recovery is currently 2/3 of the oil consumption. The proven reserves are 6 billions of tonnes, and the production is 570 millions of tonnes. This means that the US will recover oil at a much slower rate in the near future (already within 5-10 years). In the near future, the US will be more and more dependent on oil imports.
• Canada has a surplus of oil mainly because of its fields of oil sand. Recovering oil sand is a very dirty procedure - Canada withdrew from the Kyoto agreement in 2011. It is hard to speculate why, but one plausible explanation may be the conflict between saving the environment and the profitability forecasts from the huge oil fields. The current net surplus is 130 MTOE per year as of 2017.
• Venezuela has the world's biggest reserves of oil in the Orinoco field. That field is mainly tar sand, which is hard and dirty to extract. The current situation in Venezuela has athe oil recovery/production drop and it is not clear when the oil recovery will increase. The US/Russian game for the iron oil throne in Caracas can be seen as a race to some of the worlds largest oil reserves.

• Russia has a huge surplus of oil and are exporting most of their production. Currently, Russia is extracting four percent of their oil per year, which is a quite high rate. Its proximity to the arctic region and the increasing temperatures opens new opportunities for Russia to find new oil. 
• The countries at the Persian Gulf have plenty of oil - less than 1.5% of the reserves are extracted per year. That is both a curse and a blessing for those countries. Almost one third of the oil production take place in the Middle East and half of the reserves are there.
• Norway recovered almost 9% of its reserves in 2017. With 89 MTOE per year, it is not at all sufficient to provide Europe with oil.
• China imports 2/3 of its oil and the craving will increase due to Chinas remarkable GDP growth of 6-7%. A GDP growth of 6% would translate to a similar increase of energy (and oil) use - 595 MTOE in 2017 would increase to 630 MTOE in 2018. The reserves are not infinite and the local oil production will fall. China will increase the global demand for oil.
• India too has a GDP growth of 6-7%. The local oil recovery is almost negligible and I expect the oil demand from 221 to 234 MTOE.
• EU has almost no oil reserves at all - the oil consumption of one year corresponds to the total amount of reserves. 11% of EU's oil consumption is extracted from within EU.

Middle East, Russia, Canada and soon Venezuela are oil sources.
Europe, China, India and soon the USA are oil "sinks".

A European-centric Conclusion:

• USA and Europe are getting more dependent on oil imports. If the oil imports would decline, the economic activity (read: our living standard) will decline. 
• We (governments, communities and individuals) should reduce our oil dependency ASAP. 
• This can be done by energy conservation, reducing unnecessary travels, reducing consumption, recycling - pretty much the same things that I'm doing to reduce my carbon footprint. 

Side Note 1:
I use the term "production" when talking about taking oil out from the ground - that is the established term, even if it isn't correct. After all, ancient animals, bacteria and geological processes are creating the oil. We humans are only putting a pipe to the well.

Side Note 2: 
My new forecast for my CO2e emissions is now 3.6 tonnes - a reduction compared with my previous forecast. The difference is how much I assume that my 2.5 hypothetical sofas will pollute, if we move to a new home.

Klimatkontot says that one sofa will generate 700 kg CO2e and I consider this number to be unrealistic. When I compare with some other sources, I get production emissions ranging from 70 kg, 80 kg, 90 kg, 118 kg  up to 230 kg CO2e. The average would be 120 kg for producing a sofa (less for an armchair or bed). I will add 150 kg for recycling the sofa and reach 270 kg CO2e. 2,5 pieces of furniture will be 700 kg instead of 1750 kg.

When we will buy furniture, we will consider some factors such as materials and transportation. If we can buy a sofa that has been produced in southern Sweden/Denmark, at least the transportation footprint will be lower.