Figures, figures & figures
In this update there several issues that get highlighted by thorough reading, which can be summed up by: Figures, figures & figures.
* The first issue is, that in the daily stream of news-data on global or local oil & gas usage, there is a strong tendency to ever more work with percentage-figures, instead of exact figures. So the talk is about growth in (expected) demand, in which China and India are of course leading, being the emerging economic powerhouses that are now in fast development.
This often looks quite scary, and it is maybe also intended this way, whilst the hard figures get increasingly shoved
to the background.
Just for facts & figures sake: The Nr 1 user of oil in the world is the USA with an estimated daily consumption
of around 21 mm bpd, with an estimated import of about 12 mm bpd. The nr. 2 user of oil in the world is China, with
an estimated 8.8 mm bpd of which 3.8 mm bpd is being imported.
The average American citizen uses every day 35 barrel of oil-equivalent; the average Chinese citizen uses every day 6 barrel of oil-equivalent.
By playing with percentage-figures only, we may easily forget the hard facts, which may distort reality substantially.
* The second issue is about the recently discovered gas-fields in India. Two new gas fields were found and the
companies stated the reserve-figures at around 20 tcf for each field; a huge amount and such was the euphoria and the
future plans for export, LNG and self-sufficiency.
Shortly after, the government-body overseeing the registration of the reserves, gave all this a cold shower and put the figures in both cases at less than 2 tcf. Whilst the reserves-estimates may still be boosted from this reality-figure, it again points to the danger of overestimating or overstating reserves (mentioned before in earlier editorials).
Imagine that the companies would have been allowed to continue with their plans based on 20 tcf: Billions of investments, pipelines, LNG-installations, and before it all starts to run for real, the hard reality kicks in and the whole thing becomes as useless as it is big.
The Indian incident may again point to the danger of overstated reserves, upon which much of our expected growth in energy-usage is leaning.
How hard are our global reserve-estimates, and are they realistically calculated or grossly inflated to maximize book-value?
One day we will know.
* The third issue is about the expectations for the future:
- On the one hand we know we need to reduce emissions strongly to try to reduce the effects these have on the climate.
- On the other hand the expected energy-usage is rising and figures of around 115 mm bpd in 2020 are now generally spoken of. Gas usage is climbing strongly, coal usage even more, emissions from tarsand-developments are getting known and frightening, the emissions as a result of the plantations for “renewables” have been recognised as a major contributor to global pollution and the fast increasing temperatures at the poles brings billions of tonnes of until-now frozen methane gas in the atmosphere. And when the oceans follow suit and start warming as well, the billions of tonnes of gas-hydrates stored under sea in delicate balance may get released very fast.
It has been said that there is a 30 years delay-factor between emissions and their effect on the climate, so
following this we are now at the climate-change level related to the emission-levels of the end-1970s. As around this
time energy-usage started to increase ever faster, we may find out that the calculations for climate-change may need
revision towards an equally progressive change.
And what this may mean we may not be able to calculate, nor display in exact figures, or in percentages.
But we may get a feeling that we need to act fast.
All the best,
Alexander
