The FT Lex Column today has this graph worth pondering. The FT says this:“Big” and “oil” are mentioned so often in the same breath that it is easy to lose perspective. Motorists and environmentalists never tire of berating the dominant supermajors whose petrol stations and share listings make them the public face of the industry, their favourite target being America’s ExxonMobil. If market value were the sole magnet for opprobrium then Exxon’s executives could breathe a bit easier because PetroChina recently overtook it as the world’s most valuable listed energy company.
But there is “Big Oil” – last year, Royal Dutch Shell earned more than $1bn a month – and then there is bigger oil. No oil major is able to affect energy prices on its own and even Exxon is far smaller than the world’s largest energy company. It is not even close. Saudi Aramco’s estimated hydrocarbon reserves of 300,000 million barrels of oil equivalent make it 15 times Exxon’s size. Exxon comes in about 17th place, with the top 10 being entirely state-owned.
18 comments:
It really is amazing how many articles there are to be writtend for the general populous that fall into the "d'uh" category.
Thanks for posting this. As an employee of a big-name "supermajor" oil company that isn't even ON that chart of course I think this should be common knowledge, but it isn't. Another point worth making is that the big multinational listed companies (Exxon, Shell, BP, Chevron...) make the bulk of their profits producing oil under some form of contract to the much bigger state-owned companies.
And the fact that those multinational companies -- Exxon, BP, Shell --- are among the biggest companies in the world -- really does put it in perspective. The world's dependence on oil grossly distorts international politics, policy, and the business world.
Interesting. The big challenge of course, is that most of these reserves have to stay in the ground if we want to stand any chance of keeping climate change within 2C. Here's a quick and dirty calculation of the amount of carbon that will be released by burning currently estimated reserves of coal, oil and gas:
http://www.easterbrook.ca/steve/?p=977
How about a discussion on what kinds of policies are needed to make it more cost effective to leave all those fossil fuels in the ground and power our industrial economies in a sustainable way.
Steve E: and, other than nuclear, what energy sources are available that can totally replace fossil fuels?
Cunctator,
The publicly traded oil companies are big but (possibly excepting Exxon) they are not outliers. In terms of market cap, Microsoft and WalMart are bigger than any oil company but Exxon. Johnson&Johnson, Pfizer, and GE are comparable in size to Shell/BP/Chevron.
With all due respect to Steve Easterbrook, framing the issue as he has done is not only not helpful, it is erroneous as it relies on tunnel vision. Whatever is to happen to climate, the drivers are far more diverse and climax than just hydrocarbon release. Pielke, Sr. has infected my thinking. ;)
correction: I meant to write "complex." Need coffee to wake up.
ljohnson: Read Mackay's "Sustainable Energy without the hot air":
http://www.withouthotair.com/
A couple of follow-on points to Steve Easterbrook's post: I don't think it's useful to lump all fossil fuels into one "problem". First, according to Steve's link, about 80% of the remaining to-be-burned carbon is attributed to coal and about 10% each to oil and gas. So, if you eliminate oil and gas but leave coal unchanged, you accomplish almost nothing.
Second, the uses of oil, gas and coal in our economy are quite different, so the policies needed to phase them out are also quite different. Oil is used mostly for transportation, gas for heat and power generation, and coal mostly for power generation. You have whole separate subsets of economic activity that have to be addressed.
I'd make another point about 'Big Oil'. The Big Oil companies that won the contracts for Iraqi oil will get all of $1.15/barrel for pumping it out of the ground. The Iraqi Government gets the rest. 3 cents a gallon isn't a 'massive profit'.
#4 Steve,
Choice of various fuels is made based on 'cost competitiveness'. In 1997 the cost of moving a ton of coal was 1.3 cents per mile. Trains run on diesel so it's probably higher now.
50% of world coal reserves are in either Russia or the US.
The vast majority of US coal reserves are in the powder river basin(Wyoming,Montana,Utah). That's a long way from market and seaports. It also doesn't have a very good BTU content. The vast majority of Russian coal reserves are in Siberia, again..a long way from markets.
When one breaks down where coal reserves are in relation to consumers the figure that the world has '113 years of coal reserves' has less meaning.
China, the worlds largest consumer of coal has 40 years worth at current consumption.
The European Union has 50 years worth at current consumption. Together they account for 51% of the worlds coal consumption.
As Steve said, it is a really deep challenge to figure out how to avoid the consumption of existing reserves of fossil fuels.
Follow-up on TSL -- this paper http://www.pnas.org/content/early/2010/02/02/0906548107.full.pdf+html indicates that short-term we need to focus on reducing emissions from transportation -- i.e. oil & gas -- first. Basically because coal pollution puts out enough aerosols to dampen the warming of the CO2 pollution and transportation produces a lot of black carbon. In the long term, however, power and industry produce catastrophic warming.
Just back from the Royal Institution debate in London with Roger, Bob Ward and Robert Muir-Wood. I have posted a placeholder in my blog with links to my Twitter live microblogging of the event, and will soon post my commentary. In a sentence, the level of consensus in the panel was incredibly high.
Complete Microblogging Of Tonight’s Pielke Jr vs Ward vs Muir Wood London Debate
Steve
Thanks for that link. I'd never read that book before. Clearly MacKay has done the discussion for us :) and isn't listening to anyone else it seems. I see also he has become chief energy advisor to UK government which explains quite a few things - eg the assumption that clean coal is actually feasible, the lack of talk of coal-to-gas technology, the pushing of nuclear despite it's massive costs, and the idea that governments perforce have to fund it all. I notice there is no way his plans ever get to 80% CO2 reduction, in fact they struggle to make 25% reduction.
Just picking on one item from MacKay's high-handed, superior thinking from the site though, he calls burning chemicals to produce heat a "thermodynamic crime" by explaining that electricity is more valuable than heat and that heat pumps should be used rather than gas heating because of the 3 to 4x return. The reality though is here for the UK:
http://www.nottenergy.com/energy-costs-comparison3
Where you can clearly see that heat pumps end up more costly per kW and produce around the same CO2 as gas home heating. For the significant extra cost of geothermal heat pumps you can get very slightly less CO2 produced mind you.
Now it's perhaps only a slight surprise that burning gas to produce electricity to then produce heat is no more efficient overall than just using the gas directly to produce heat - except you are 20,000+ dollars poorer and have a noisy wart stuck on your house. This is what always happens - somebody let's ideology get in the way of their thinking, even when they singularly boast about not doing that!
But it's worse, MacKay's plans all need extra electricity plants, presumably nuclear and offshore wind. Nuclear needs public money since private investors won't touch it with a bargepole. Offshore wind might be privately fundable but I suspect not. Yet a) the UK and the USA are in massive debt that they will seriously struggle to pay off, and b) there is another option that I didn't see discussed anywhere because McKay is anti fossil fuel like yourself: Coal to gas tech can convert Harry's 50 year reserves of coal into 200 year reserves by dint of not needing to dig in previously unworkable seams, just drilling there instead. This can be (and is) privately funded therefore it's doable in a shorter timescale - and we can then use cheaper gas power stations to take advantage of their doubled efficiency over coal. Ergo private-funding could give 50% real CO2 reduction rather than the hopeful (magic) 25% taxpayer-paid reduction that MacKay plans. This won't ever come about though if politicos, greens and advisors automatically reject natural gas because it's a fossil fuel. Realism has to be used by somebody at some point I hope!
Roger,
You can't believe OPEC stated reserves. Production quotas are based on estimated reserves, so everone doubled their reserves back in the 1980's. That's still big numbers, though.
TSL #10,
If your numbers on remaining fossil fuel are correct, someone should tell the IPCC. Scenario A1B, probably the most commonly quoted, has cumulative energy production from fossil fuels by 2100 at coal 15.9 ZettaJoules, oil 20.8 ZJ and gas 42.2 ZJ. That's 3.9E16 cu.ft. of methane. Current estimated reserves are about 6E15 cu.ft. Nuclear energy production is supposed to be 123 ExaJoules in 2050 compared to 6 in 1990. Anyone care to hazard a guess on the rate of power plant construction required to achieve this?
Some low hanging fruit:
Apparently junk mail produces as much CO2 as 9 million cars, or 11 coal fired power plants or 7 US states combined.
http://www.thedailygreen.com/green-homes/eco-friendly/junk-mail-47080803
Apparently international shipping produces as much CO2 as Germany yet simple measures could reduce it by up to 75%:
http://na.oceana.org/en/blog/2009/12/global-shipping-more-co2-than-germany
Which brings me to nuclear powered ships - they were tried but all were found to be uneconomic for private companies and one even reconverted to diesel, so only government ships are now nuclear powered, and of course decommissioning is still a big problematic and expensive issue. Now there's a microcosm of the bigger picture for us!
http://www.world-nuclear.org/info/inf34.html
This is a somewhat misleading graphic. While the state owned oil companies own the reserves, the oil is almost completely marketed through the privately owned ones.
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