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Geography 2143A/B Study Guide - Quiz Guide: 18 Months, Viscosity, Daniel Yergin


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Geography
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GEOG 2143A/B
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Oil
Oil Springs, Ontario the first commercial oil well in North America
What A Barrel Makes
Distillate Fuel Oil makes 10.5 Barrles compared to 19.4 from Gasoline
o Residual Fuel Oil-1.7 Barrels
Finsihed products from a refinery
Most goes to gasoline 42%, then Diesel ¼, Lubes/Coke/Other 11%, Jet fuel 9%
o Lowest is waxes and Asphalt 3%
Types of Crude Oil
Pg. 136 and 137 for difference in crudes, very important
Chart of Crude Oil prices since...
High 2011 prices after Pennsylvania boom (1961-69), Iranian revolution (80s), Invasion of Iraq and Atab Springs
(2000s)
WTI- texas light sweet or light sweet Crude Oil, type of crude oil that is used as a benchmark in oil pricing
The underlying commodity of NY mercantile Exchanges oil futures contracts
o Based in Cushing, Oklahoma
Brent- is the biggest of the major classifications of crude oil
Is used to price 2/3 of the worlds internationally traded crude oil and is based in London, UK
o This oil streams include, Brent, Oseberg and Ekoflisk that make up 47.6%, where as Forties represent
52.4%
o Whatever is the cheapest of the 4 sets the benchmark, and that is traditionally Forties
Much of its demand is from S. Korea, putting pressure on price of Brent
Oil prices per barrel at which fuels sources become economically
Pg. 141-143
Many big oil discoveries from Brazil to Sierra Leone, but may only be enough to ward off a small supply crunch
o Look at charts pg. 144
IEA (International Energy Agency) says the world economy will witness $2000 bn shift in wealth and power from
oil consuming countries to members of OPEC because
o Oil prices rising to $200 a barrel by 2030
$66 in 08, 100+ between 08-15,
o Global demand peaking at 116 million barrel a day in 07, to 106 in 08 estimate
65 (80s)->77 (2000)-> 85 in 2006
o Pg. 146? Don’t know what it means
Increasing Prices Reduces Consumption
OECD oil demand declining and crossing with prices in the Q3 07
Pg. 148 might mean nothing
Took 125 years to use 1st trillion barrels of oil, while second trillion will be consumed in next 30 years
Signs of Stress
Pg.150
Top 10 Producers 2007
Saudi Arabio and Russia both hold top for 12.6% of world share, but Saudi need has declined
o They are followed by USA who holds 8%, Canada ranks at 7th with roughly 4.1%
Their consumptions hold for 2.6%, but there reserves has increased in 07 from 06
US production growth will come from tight oils by 2020, where as its other sources will stay the same
o US production maybe up 1 million by 2016 to 6.6 million barrels a day
o Canada is similar in the oil sands, where as Brazil will just grow
o From 12.2 million barrels in 2000 to 19.6 in 2020
China
Biggest energy user and second largest-consumer of oil after US
o Their state-owned oil companies have become a major force in global merges and acquisitions in last 5
years, also trying to do US thing by pinning down on their energy security

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o Petro China the most growth, from 2.9million barrels a day in 2006 to 2.4 in 2010
Sinopec and Cnooc grew in small margins
Their consumption of 10 million barrels a day is twice amount of production of 4 million in 2012-
11-19
Major Oil Trade movements in 2011
Pg. 155, all or most of Canadas is toward USA,
The western hemisphere provides a substantial share of oil
o Saudi Arabia, Nigeria, Venezuala and Mexico likely at the top pg.157 for reference
pg.158 shows Chinas oil imports, most of the importing coming from the Middle East and Africa 2007-09
Oil Reserves
Proven reserves- proven developed and proven undeveloped and has a 90% certainty of being produced
Probable reserves- 50% certainty of being produced
Possible reserves- 10% certainty of being produced in the foreseeable future
Map of Proved oil reserves at end of 2011
½ in Middle East, and 1/5 in S. and Cent America, North America 13% followed by Europe and Africa, and a small
percentage in Asia pacific
o Total of 1652.6 thousand million barrels, 1.6 trillion
North American now closed for exploration and production
34 billion barrels of oil on the west coast and another 34 in the east
o Eastern Guelph has another 28 billion
o Another potential 20bn in Alaska
o 2 bn in the rockies
Oil Consumption per Capita
Highest in Canada and some Middle Eastern Country, followed by the States and northern Europe
Net imports of Oil as % of Total Consumption 2010
Vulnerability of an economy to oil price changes varies by country
o Spain, Japan, France, Germany, Italy are all nearly in 100% in that order
o China has increased by still around 55%, where as US has decreased about 5% to 45%
Britain huge increase to from 17% to 30%ish
Top 10 Consumers
1. USA ¼ of the world consumption 2. China 9%, 3. Japan 6%, Canada in 7th and 10th is Saudi Arabia which odd
cause they have largest production and proven reserves
o After top 3 the rest are around 3-2%
In contrast to US whos dependence on energy imports are decing, China is rising
o Already takes 38% more oil from Middle East than US
In 2000, it was US, EU, China in terms of imports 12 billion on top
In 2010, China is still half EU AND NA in imports
But by 2035, they will be top, with US at bottom
Oil Reserves and their Remaining years at the end of 2010
Saudi Arabia has the most oil reserves but it is expected to drain in 72 years, opposed to Venezuela 234 years
who are in second
o US,Canada, Brazilland China were near the bottom then, all projecting less then 20 years
o Saudi Arabia is explain because they output 3.24 million barrels day as of 2011 compared to the rest
whore all under .3
World Consumption be Sector
Residential vs Commercial
o Residential calls for 100 billion BTUS by 2040, and commercial only 40
Transportation
o Personal will still continue to be around 20 million barrels between 2010 and 2040
Change will come from a larger share coming from Non-OECD
o Commercial will grow almost 40% to 48 million barrels, with Non-Oecd also facilitating most of that
growth

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Industrial demand by sector
o Manufacturing will continue to take the largest portion and grow as well as will chemicals
Energy and other industries will stay the same
International Oil Company Access is declining
Pg. 167-169 look at it cause I don’t want to right now
New Seven Sisters
Probably oil company giants?
o Gazprom Russia, CNPC/PetroChina China, NIOC Iran, PDVSA Venezuela, Petrobras Brazil, Petronas
Malaysia, Saudi Aramco Saudi Arabia
OPEC
Part of a concentrated in select group of countries
Organization of Petroleum Exporting Countries OPEC
o 12 members largely positioning in Middle East and Africa
Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab
Emirates and Venezuela
They control 81.33% of worlds crude oil reserves in 2010, other 20% in Non OPEC countries
o Of this 80% Saudi Arabia and Venezuela are the biggest
Followed by Iran, Iraq, Kuwait and the UAE
Russia
Russia is the one big producer that is not part of OPEC
o Their companies have very low operating costs compared to other producers
They had a decline in production in the 90s but have steadily grown to 10 000 000 barrels a day
o Their gas and oil have political effects across all its neighbouring eastern countries, because theyre
pipelines extend to all of them
Provided the largest amount of gas to Europe in 2007, (UK, Germany, Italy, France, Netherlands)
o Seconded by Norway and Third by Algeria
CURRENT Oil Production by Country
Saudi Arabia, Russia, USA in order all right above 10 000
o China, Iran then 6th is Canada around the 4300-3600
New Oil is increasingly expensive
Trend in 2000 was a huge supply thus less price, but even as we have steadily found more supply the price keeps
rising
African Oil
The petroleum potential of Africa, a key contributer of oil barrel thirsty markets, isbeginning to look dimmer,
because of their credit crunch and host of endemic challenges
o The control of its oil lands is divided among three players
International Oil companies make up for most with about 3 billlion licensed area
Others such as Asian NOCs and Middle Eastern/Asian private make up for 1 and a bit
Where as African only make up for half a billion
o Much of the oil is difficult and expensive to access
Deep-water, Shelf, Onshore, Ultra Deepwater in order, in million barrels per day
Mexican Oil
With oil prices falling and it output fading, Mexico must overhaul is oil laws and allow private companies for
room
o Steady 3 million barrel per day output until 08 when it falls under
South American Oil
The new rsevres promise to turn Brazil into an important oil exporting nation
o Also highlight the differences between Petrobas (publically traded but government controlled oil
company of growing international status) and the declining fortunes of Pdvsa of Venezuela and Pemex
of Mexico\
o Look at chart on pg 181 should be important
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