There is considerable debate, both within and outside the oil industry, on whether global oil production has peaked here an oil geologist argues that we should take the threat seriously – This report was first published in Platform's carbon web news letter, issue 3.

Peak oil has become a hot topic. The term is used to describe the point at which one half of the world’s conventional oil reserves have been extracted and used-up, after which oil production begins its inexorable decline. There are still considerable differences of opinion about when peak oil will occur, if it hasn’t already. Given current trends in demand, if the pessimists are right, we have perhaps 25-30 years of oil left. It is oil geologists who find oil and come up with oil reserves figures, therefore it may be interesting to take a look at peak oil from an oil geologist’s perspective. Despite numerous articles and government documents, peak oil remains a controversial subject, this may in part be due to a lack of understanding as to where reserve figures come from. How do Geologists determine reserves?

Reserves are calculated initially by the geologist who mapped the field and these figures determine whether the field will be worth developing commercially. These figures are usually somewhat optimistic. Their calculation uses an equation involving rock volume, porosity, and oil saturation. These figures must be derived from a nearby or analogue field, they are very general in nature and do not capture local variations in the reservoir. It is only once the field is drilled that realistic figures can be determined. At this stage a range of reserves figures are reported. This statistical approach is used in assessing the financial risk involved in developing the field.

Possible, probable and proven reserves

The terms possible, probable and proven oil reserves attempt to define levels of certainty. These terms are frequently used, but should be directly related to the number of wells drilled and reservoirs penetrated. However, the figures attached to these terms are speculative.

Rate of recovery

Reserves figures are quoted as either oil in place, which is the total oil under the ground, or as recoverable oil. The rate of recovery is initially derived from nearby fields that are already producing, or from analagous fields. This figure, above all others, is crucial in determining recoverable reserves, yet it can be the number which is the hardest to establish.

The geologist as an eternal optimist

The exploration geologist who makes a discovery has to sell it to management. As a result, the figures are invariably optimistic, in the hope that the project will fly. It is almost always the case that figures are downgraded once a field goes into production, although it can still be a shock to the companies when actual reserves are lower.

The political dimension

A report published in February 2005 by the US Department of Energy, the Hirsch report, recognised that peak oil is inevitable and that steps must be taken to mitigate its effects. This was the first time a major government report openly recognised a growing problem with global oil supply describing it as an “unprecedented risk management problem.”

Is there hidden oil?

There has been speculation that there may be large undiscovered reserves hidden deep below the surface in some remote corner of our planet, but from a geologist’s perspective it looks very unlikely. Western Siberia for example may contain vast untapped reserves, but ultimately this will not arrest the overall decline in global oil production.

Who do you believe?

Calculation of oil reserves is contentious, leading to overestimation in most cases, so who do you believe on how much oil is left? There is a growing body of experts who argue that we are now close to, or past the peak of global oil production. Their arguments have gained credibility and peak oil is no longer dismissed as alarmist scaremongering. There needs to be a far more open public debate on the issue and a greater sense of urgency in planning future energy supplies.