emergent ink

Another big news outfit forgets to check its math. (NY Times failed last month.)

CNN: Briefing: Oil

OPEC states that there were oil reserves of 1.1 trillion barrels in 2006, of which they control over three quarters. They predict that current stocks will last 81 years if consumption remained at 2006 levels — 76 million barrels per day (mb/d).

76 million barrels per day * 365 days in a year = 27.74 billion barrels per year;

1.1 trillion barrels in reserve / 27.74 billion barrels per year = 39.65 years.

And that’s if we can get every last barrel out of the ground. But as New York Governor David Patterson (one of the few politicians who have spoken at length about Peak Oil) knows, it gets more expensive to get the last 50% out. (One way of looking at this is, when an oil well is young it may get as much as 30 barrels of oil out of the ground, using only one barrel of oil as the energy to do it; eventually you get to the point where every barrel you get out of the ground costs you a barrel of oil worth of energy. At that point, whatever’s left in the ground stays there.)

The math gets murky and you can’t count on those numbers coming from OPEC anyway.

You can’t predict what oil prices are going to do even in the short-to-medium term unless you have a good handle on the forces of supply and demand. And that requires thorough and reliable data — which don’t exist.