Recoverable Resources Increase with Technological Advancement
Traditional methods of extracting oil and fossil fuels eventually face a limit. We can only return to the same well so many times before the well runs dry, and we must look elsewhere. In the case of oil and fossil fuels, we have begun to look deeper and deeper beneath the surface of the planet for potential reserves. In years past, even if we could ascertain the presence of oil or natural gas deep inside the earth, if it was beyond the reach of current technology, we had no way of extracting it. However, as technology continues to advance, reserves that were previously unavailable may be within reach.
The United States Geological Survey (USGS) is the only provider of publicly available estimates of technically recoverable resources, and defines “technically recoverable” (TR) as product that has been assessed, is known to be in-place, and may be recoverable using current technology.
USGS conducts assessments by surveying an area to ascertain the presence and viability of petroleum system elements, such as petroleum source rocks, reservoir rocks, and traps. They then assess the recoverability of any resources, taking into account current technology and the time that would be required for such an operation. A recent assessment of undiscovered conventional oil and natural gas resources in Puerto Rico estimated that approximately 19 million barrels of crude oil and 244B cubic feet of undiscovered natural gas are available and technically recoverable (USGS).
Globally, there are vast quantities of technically recoverable crude oil and natural gas. In a recently released assessment, the USGS estimated that 565 billion barrels of oil and 5,606 trillion cubic feet of natural gas are technically recoverable in 171 geological states, excluding resources within the US (US Department Of Interior).
Whether or not a resource is technically recoverable hinges almost entirely on the state of current technology; as technology progresses, the number of reserves estimated to be technically recoverable increases. Such was the case with the advent of “fracking,” or horizontal drilling combined with hydraulic fracturing. This technological advance made shale gas exploration and extraction a real possibility. The graph below demonstrates how the change in technology caused a monumental change in the estimate of technically recoverable crude oil.
Although fracking has enabled recovery of reserves that were formerly unobtainable, in many cases, it is still not economically feasible to extract technically recoverable product. However, shale exploration does provide a timely example of how advances in technology change the market outlook. It was once thought shale oil could not be extracted in significant quantities, but it is now being produced on a large scale in the United States.
This increase in production has caused significant disruption in the markets- particularly with regard to pricing. As the market evolves to include this new production, more data is needed to analyze the effects on different market attributes. ZEMA enables users to centralize and automate new incoming data, and also to analyze and visualize the effects upon specific variables.
The example below demonstrates how the spread between the international (Brent) and United States (WTI) crude oil benchmarks have increased recently, as WTI fell due to the increase in supply of shale oil (Bloomberg).
Advancements in technology allow new products to grow into markets, changing the markets in the process. As we have seen with shale oil, changes in production capability caused significant changes in oil prices for different market segments. In coming years, it is likely that technology will create new avenues for extracting the immense reserves of technically recoverable resources. Changes in market variables require new data sets and analysis, further complicating an already complex equation. The continual evolution of the oil and gas market further emphasizes the necessity of a strong data management system. ZEMA makes data management simple by automating the capture, validation, and storage of data. Powerful visualization tools enable analysis with ease, and a centralized database makes it easy to share data and analyses across corporations.https://blog.ze.com/our-industry-views/recoverable-resources-increase-with-technological-advancement/https://blog.ze.com/wp-content/uploads/2013/12/Tech.jpghttps://blog.ze.com/wp-content/uploads/2013/12/Tech-300x300.jpgIndustry ViewsThe ZEMA Solutionanalysis,Commodities,data management,oil,power,riskTraditional methods of extracting oil and fossil fuels eventually face a limit. We can only return to the same well so many times before the well runs dry, and we must look elsewhere. In the case of oil and fossil fuels, we have begun to look deeper and deeper...Jovita BathJovita Bathjovita.email@example.comContributorBlogs by data management Experts & Analysts | ZE