Chapter 5: Petroleum Liquids

Petroleum liquids constitute the largest energy source in the global energy mix. However, these liquids have been declining as a percent of the energy mix for about 30 years and will continue to decline as alternative sources become commercial. Unconventional sources have also had a profound effect on the oil market, depressing prices and elevating production rates. The absolute volume of production will likely increase to levels 15% to 20% greater than today. Proven reserves of petroleum liquids, namely those quantities that can be produced when current prices are high and with new technology, range from l.128 to 1.475 trillion barrels. The higher estimates include unconventional sources including tar sands and oil shales. Estimates of ultimate petroleum liquid resources, yet to be discovered or developed, vary by a factor of three or more. Lower estimates, on the order of 2 trillion barrels are based largely on projections of historical discovery trends. These estimates indicate early peaking of global production. Higher estimates, where discovery is based on geologic factors, and which also include reserve growth and unconventional resources, range from 3 to 5 trillion barrels; these estimates indicate greater future production, commonly with long terms plateaus. Costs of petroleum liquids production vary by more than an order of magnitude. Certain large, conventional fields, mostly situated in the Middle East and North Africa have the lowest costs. Future production will increasingly come from more costly sources, including enhanced recovery, ultra-deepwater, Arctic areas and now more specifically, unconventional sources.