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Western University
Geography 3422A/B
Milford Green

Oil 12/4/2012 8:09:00 AM Non-Renewable Resources  Population growth exerts more pressure on resources  Rate of use rapidly rising  Rarely is a resource entirely exhausted o Supply and demand o Price elasticity  55% of the worlds oil resources remain unproduced in 2040  Fossil fuels are distributed unevenly across the world o More developed nations – 23% of population accounts for 75% of energy use o Less developed nations – 77% of population accounts for 25% of energy use Oil  Barrel of oil = 45 US gallons  Best oil is sweet crude – doesn’t have sulfur in it, easier to refine  Virtually no waste in a barrel of oil  Four types: o Light – less dense o Sweet – lower sulfur content o Heavy – denser, the heaviest oil distills at temperatures above 1050 degrees Fahrenheit o Sour – most dangerous, large levels of sulfur  Only known oil supplies when oil was first discovered – Ontario, Pennsylvania and Ohio  Texas light sweet or light sweet crude oil (WTI) – a type of crude oil used as a benchmark in oil pricing and is the underlying commodity of NY Mercantile Exchange’s oil future contracts o Cushing, Oklahoma  Brent – biggest of the major classifications of crude oil o Used to price two thirds of the world’s internationally traded crude oil supplies o London, UK  Venezuela has the largest heavy oil reserves in the world o Canada has the third largest  A large number of oil discoveries from Brazil to Sierra Leone undermines those who believe that there are no new oil frontiers to explore o The finds may not be enough to ward off a supply crunch as the world economy recovers  International Energy Agency (IEA) – says the world economy will witness a $2,000bn shift in wealth and power from oil-consuming countries to members of OPEC as oil prices rise to $200 a barrel by 2030  Increasing prices are resulting in decreased consumption o China imports more oil from Saudi Arabia than the US does o Took 125 years to use the first trillion barrels of oil o The second trillion will be consumed in the next 30 years  China is the world’s largest energy user and second largest consumer of oil after the US o China’s state owned oil companies have emerged as a major force in global M&A’s in the past 5 years  Straight of Hormuz o Narrow waterway where a large amount of Middle Eastern oil passes through o 82% of Japan’s oil comes through the straight o 16% of the US’s oil comes through the straight  Proved oil reserves goes up every year o Middle East (48.1% of the world) o South and Central America o North America  Oil reserves o Proven reserves – proven developed and proven undeveloped  90% certainty of being produced o Probable reserves – 50% chance of being produced o Possible reserves – 10% certainty of being produced in the foreseeable future o Countries and reserves  Saudi Arabia has the most oil reserves  Venezuela  Iran  Canada is 11 th  Canada is consumes the most oil per capita  US is the world’s largest consumer of oil  Spain and Japan are entirely reliant on imports  China is expected to become the world’s largest oil importer  World’s consumption o 2/3 goes to residential demand o 1/3 to commercial demand o industrial demand  Most to manufacturing  Chemicals  Energy industry o 65% of oil company reserves are held by governments  Largest oil producer
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