OIL SUPPLY 221
level are the Middle East OPEC five: Saudi Arabia, Iran, Iraq, Kuwait
and the United Arab Emirates (Fleming, 2000). However, it is also
difficult to project the timing of a peak in oil production because
technological, cost, and environmental challenges make it unclear
how much oil can ultimately be recovered from proven reserves,
hard-to-reach locations, and nonconventional sources.
The world's total production of liquid fuels from unconventional
resources in 2006 was 2.8 million barrels per day, equal to about
3 percent of total liquids production. Production from unconventional sources included 1.2 million barrels per day from tar sand in
Canada, 600,000 barrels per day from very heavy oils in Venezuela,
and 320,000 barrels of ethanol per day in the United States (Annual
Energy Outlook, 2008).
To increase the recovery rate from oil reserves, companies
turn to enhanced oil recovery technologies, which United States
Department of Energy reports has the potential to increase recovery
rates from 30 to 50 percent in many locations.These technologies
include injecting steam or heated water; gases, such as carbon dioxide; or chemicals into the reservoir to stimulate oil flow and allow
for increased recovery. Opportunities for enhanced oil recovery
have been most aggressively pursued in the United States, where
enhanced oil recovery technologies currently contribute approximately 12 percent to U.S. production, and carbon dioxide EOR
alone is projected to have the potential to provide at least 2 million
barrels per day by 2020. However, technological advances, such as
better seismic and fluid-monitoring techniques for reservoirs during an enhanced oil recovery injection, may be required to make
these techniques more cost-effective. Furthermore, enhanced oil
recovery technologies are much costlier than the conventional production methods used for the vast majority of oil produced. Costs
are higher because of the capital cost of equipment and operating costs, including the production, transportation, and injection
of agents into existing fields and the additional energy costs of
performing these tasks. Finally, enhanced oil recovery technologies have the potential to create environmental concerns associated with the additional energy required to conduct an enhanced
oil recovery injection and the greenhouse gas emissions associated
with producing that energy, although EIA has stated that these
environmental costs may be less than those imposed by producing oil in previously undeveloped areas. Even if sustained high oil
prices make enhanced oil recovery technologies cost-effective for
level are the Middle East OPEC five: Saudi Arabia, Iran, Iraq, Kuwait
and the United Arab Emirates (Fleming, 2000). However, it is also
difficult to project the timing of a peak in oil production because
technological, cost, and environmental challenges make it unclear
how much oil can ultimately be recovered from proven reserves,
hard-to-reach locations, and nonconventional sources.
The world's total production of liquid fuels from unconventional
resources in 2006 was 2.8 million barrels per day, equal to about
3 percent of total liquids production. Production from unconventional sources included 1.2 million barrels per day from tar sand in
Canada, 600,000 barrels per day from very heavy oils in Venezuela,
and 320,000 barrels of ethanol per day in the United States (Annual
Energy Outlook, 2008).
To increase the recovery rate from oil reserves, companies
turn to enhanced oil recovery technologies, which United States
Department of Energy reports has the potential to increase recovery
rates from 30 to 50 percent in many locations.These technologies
include injecting steam or heated water; gases, such as carbon dioxide; or chemicals into the reservoir to stimulate oil flow and allow
for increased recovery. Opportunities for enhanced oil recovery
have been most aggressively pursued in the United States, where
enhanced oil recovery technologies currently contribute approximately 12 percent to U.S. production, and carbon dioxide EOR
alone is projected to have the potential to provide at least 2 million
barrels per day by 2020. However, technological advances, such as
better seismic and fluid-monitoring techniques for reservoirs during an enhanced oil recovery injection, may be required to make
these techniques more cost-effective. Furthermore, enhanced oil
recovery technologies are much costlier than the conventional production methods used for the vast majority of oil produced. Costs
are higher because of the capital cost of equipment and operating costs, including the production, transportation, and injection
of agents into existing fields and the additional energy costs of
performing these tasks. Finally, enhanced oil recovery technologies have the potential to create environmental concerns associated with the additional energy required to conduct an enhanced
oil recovery injection and the greenhouse gas emissions associated
with producing that energy, although EIA has stated that these
environmental costs may be less than those imposed by producing oil in previously undeveloped areas. Even if sustained high oil
prices make enhanced oil recovery technologies cost-effective for