by Cheryl Rofer
The $4 per gallon number has gotten people’s attention, but there’s more to petroleum than that. President Bush now wants to drill in lots of places that have been put aside within the United States, but that is a very long-range solution, if it’s a solution at all.
And one may wonder how much US influence on the Iraqi Oil Ministry has led to this. Certainly Iraq would like to take advantage of record oil prices, but more oil on the market would tend to lower those prices.
I’ve been wondering about a number of claims about petroleum prices. The only way to begin to resolve my questions is to look at some numbers, which I haven’t seen done anywhere in the media. Not surprising for a bunch that thinks water can be a fuel.
It’s not clear to me that any of the claims can really be verified. There are too many possible variables, and too much uncertainty in all of them. Qualitatively, I suspect that there is a war-fear premium on petroleum as long as Bush and Cheney are in office, which may amount to 25% of the current price. Speculation seems to be part of it too, but it is an easy excuse for the oil producers to use. And there does seem to be an increasing demand.
To start, I’d just like to get a sense of what the numbers are and how the various nations stack up. To that end, I’ve collected some of the numbers in a spreadsheet (Download petroleum_2008.xls), for those of you who want to look at or play with them. What I’ve collected is not exhaustive, and it may be somewhat incorrect, for various reasons. I don’t want to get into arguments just now about the accuracy of the data in detail. That comes later, if at all.
What I want to do is to see how the various nations stack up against each other. Sheet 1 is the raw data, except for refinery capacity, arranged the way the Department of Energy’s Energy Information Agency does, by continents. Sheet 2 is a simplified version, in the same order.
Sheet 3 is arranged by proved reserves. The first ten countries, in decreasing order of reserves, are
Saudi Arabia
Iran
Iraq
Kuwait
United Arab Emirates
Venezuela
Russia
Kazakhstan
Libya
Nigeria
The United States is number 11.
Sheet 4 is arranged by production. The first ten countries, in decreasing order of production, are
Saudi Arabia
Russia
United States
Iran
China
Mexico
Norway
Canada
Venezuela
United Arab Emirates
The difference in these two lists suggests that the famous peak oil hypothesis is not the whole story. In some countries, like the United States, production has peaked, due to what a colleague called the drain-America-first policy. He argued that it would have made more sense to keep our oil in the ground and use up other countries’ reserves first. We can see that President Bush belongs to the drain-America-first faction, urging that American production be increased, when it is already high in proportion to our proved reserves. Russia is following a similar policy of depredative nationalism.
Iraq, Kuwait, Kazakhstan, Libya and Nigeria appear on the first list but not the second. They have lots of oil, but it is not being produced for a variety of reasons, none of them technical or related to peak oil. War, inefficient national oil companies, and political difficulties are most of the reasons.
Sheet 5 is arranged by consumption. The first ten countries, in decreasing order of consumption, are
United States
China
Japan
Germany
Russia
India
Canada
South Korea
Brazil
Mexico
Several non-producing countries appear on this list: Japan, Germany, and South Korea. Other non-producing European countries, including France, Italy, Spain and the Netherlands are within the next ten.
Sheet 6 is arranged by per capita consumption, total consumption divided by population. This gives quite a different top ten:
Kuwait
United Arab Emirates
Qatar
Canada
United States
Saudi Arabia
Netherlands
Norway
Japan
South Korea
What this shows is that it takes energy to produce energy. Kuwait, the UAE, Qatar and Saudi Arabia all are thinly populated but big oil producers. Production is part of the usage for Canada, the US and Norway as well. The other three do a fair amount of refining, which also takes energy and is on sheet 7. Here are the top ten in refining capacity:
United States
Russia
Japan
India
Venezuela
South Korea
Canada
Germany
Saudi Arabia
France
And, oh yeah, great minds running in the same channel today: Sue OPEC! Hey, it’s better than going to war against them.