The Oil Drum: Australia/New Zealand

[editor's note, by Dave Cohen] HO is out of town on family business so I took this subject up in his absence.

Dr. Leo P. Drollas, Deputy Director and Chief Economist for the Centre for Global Energy Studies has issued a response to Heading Out's Depletion estimates and the CGES. I feel that Drollas' comments deserve a response.

The argument concerns what is termed "reserves growth" which Drollas defines as

Growing knowledge tends to result in more oil reserves through oilfield extensions and revisions of reserves -- what is commonly known in the industry as `reserves growth' -- as well as through discoveries of new oilfields....

If there are no gross additions to reserves the depletion rate is equal to the world's rate of oil production as a percentage of global proven reserves (2.38% in 2005). However, gross additions have not been zero; indeed, since 1954 they have exceeded the world's production of oil.

The entire comment is below the fold.