What Peak Oil? — US oil and gas reserves grew in 2010
According to Ernst & Young’s 4th annual US exploration and production benchmark study, oil reserves grew by 11% to 17.8 billion barrels in 2010 and natural gas by 12% to 174.3 trillion cu. ft., the strongest oil and gas reserve growth in the last five years.
The report examined the US exploration and production results of the 50 largest oil and gas companies, as a way to take a measure of the US oil and gas landscape. Fueled by high commodity prices, oil and gas companies more than doubled their capital expenditures (primarily property acquisitions) in 2010, growing from $72.8 billion in 2009 to $177.9 billion in 2010.
Improved technology was also a key factor. Improved hydraulic fracturing (fracking) and horizontal drilling technology has increased shale oil and gas development and made for a major growth in reserve and/or production replacement rates. In 2010 the oil production replacement rate from discoveries, extensions, improved recovery, revisions, purchases, and sales of proved reserves was 234%; the natural gas production replacement rate, 252%.
BP led the pack in 2010 with 2.9 billion barrels of oil reserves in the US, followed by Exxon Mobil, ConocoPhillips, Occidental Petroleum, and Chevron.
Exxon Mobil (with almost 26 trillion cu. ft.) topped the list of companies with major US natural gas reserves, followed by Chesapeake Energy, BP, Anadarko Petroleum, and ConocoPhillips.
While the sudden growth does not mean that global oil and gas reserves are not in a long term decline (the Peak Oil theory), the activities of 2010 do show that high commodity prices and improved technology can enable well-capitalized major oil and gas players to identify and access more reserves in the short term.
Photo by Richard Masoner, used under a Creative Commons license.