Last weekend I heard a report on the radio about new hopes for the Irish economy after a windfall oil discovery. With the collapse of its property and financial markets, the oil find does extend a ray of hope that there might be a new source of jobs. Handled right, it could be a great thing for Ireland’s economy (if not its environment). But what does the find do for global reserves? And does it change the outlook on peak oil?
Oil discoveries are often described as enormous. The Daily Mail says Ireland’s is ‘a major discovery‘. Irish Central says it is ‘massive‘. Is it? There’s a lot more out there in theory, but last week’s announcement was about a proven discovery of 280 million barrels. Production will run at an estimated 3,514 barrels a day.
That’s not massive. The world’s biggest oil field, Ghawar in Saudi Arabia, can top out at 5 million barrels a day. Ghawar is in a league of its own, but that’s the spectrum we’re talking about. Three and a half thousand is tiny.
Okay, so production will be fairly small scale, but 280 million in reserves – that’s a big number. Again, not really. You need to be counting in billions before you have a really major find on your hands. The aforementioned Ghawar is the world’s largest oil field and has 75 billion. Cantarell in Mexico has 35 billion. These are supergiant oil fields and the comparison might seem a little unfair, but this is the scale on which these things are measured. Reuters have it about right when they described it as a “small-to-medium oil discovery“.
From a global reserves perspective, the big number to keep in mind is 88 million. This is our daily oil consumption. Every time I read about a new oil find, I mentally divide it by 88 million. Ireland’s? Three days supply for an oil thirsty world. A possible 600 million in Israel this summer? Just short of a week.
I’m not making these observations to pour cold water on Ireland’s find. If it delivers on its initial promise it would be enough to make Ireland oil-independent, which is very good news for them. I offer them as a reminder to take a moment to put these announcements into perspective.
This matters because it if we remain convinced that oil is plentiful, we’re not going to change our behaviour and reduce our dependence. Oil industry announcements always suggest their discoveries are huge, because that brings in the investors. The media often repeat those claims without questioning them. The result is an endless optimism around oil, even as the prices creep relentlessly higher. The language we use about oil matters, and the sooner we start talking honestly about oil depletion the better.