Interpreting the BP Statistical Review
A major challenge with understanding discourses regarding energy is the vast collection of different numbers and units that are thrown around. Since large numbers are often presented with little context, it is difficult to understand the broader meaning behind those numbers.
This tutorial uses the BP Statistical Review of World Energy as a framework for interpreting energy production, consumption, and future availability.
Energy and Energy Conversions
Energy is a fundamental entity of nature that is transferred between parts of a system in the production of physical change within the system and usually regarded as the capacity for doing work.
Energy is fundamental to all physical process on our planet, and to life itself. Contemporary industrialized society is dependent on stocks of ancient sunlight, stored in the chemical bonds of fossil fuels.
Conservation of Energy
The thermodynamic principle of conservation of energy recognizes the equivalence of heat and mechanical work (Fermi 1937). Conversion between forms of energy is a fundamental task performed by both machines and living organisms. While energy from different sources is often not interchangeable (e.g. solar-generated electricity cannot currently be used to power commercial jet airliners), technological and social adaptation can often permit significant levels of substitution (e.g. electric high-speed trains can replace jet airliners).
When burned, hydrocarbon fuels (like fossil fuels) release heat, which is then used to power automobiles or turn electrical generators and perform useful tasks for members of industrialized societies. Therefore, measurements of the average heat content of different fuels and the amount of heat needed to generate specific amounts of electricity can be used to assess overall energy production, consumption, and future availability.
To facilitate that analysis, measurements of energy in different forms and from different sources can be converted to a common unit for rough comparison. In this paper, we will use the British Thermal Unit (BTU) as the common unit. A BTU is the amount of heat needed to raise the temperature of one pound of liquid water by one degree Fahrenheit.
Quads and MMTOE
When dealing with large amounts of energy at a country level, government agencies like the US Energy Information Administration (EIA) often express energy values in quadrillions of BTUs or quads. One quad is 1,000,000,000,000,000 BTU. The USA in 2015 is estimated to have used 97.35 quads of energy.
Since BP (formerly British Petroleum, formerly The Anglo-Persian Oil Company) is an oil company, their report measures energy in tonnes of oil equivalent (TOE). A TOE is around i7.33 barrels and contains approximately 40 million British Thermal Units (42 gigajoules) of heat. Note that a tonne (with two n's and an 'e') is a metric unit equivalent to around 2,204.6 pounds. This is different from the ton (short ton), which is a weight measurement used in the USA that is equal to 2,000 pounds.
Since country-level energy amounts are quite large, BP commonly expresses values in million tonnes of oil equivalent (MMTOE). One MMTOE is equivalent to 39.7 trillion BTU or 0.0397 quads.
For extremely large values (such as oil reserves), BP uses thousand million tonnes of oil equivalent or one billion TOE. One billion TOE is equivalent to 39.7 quadrillion BTU or 39.7 quads.
Conversion factors can be used to mathematically change values in one unit of measurement to another unit of measurement. For example, in 2015, the BP report contains an estimate that USA consumed 2,280.6 million tonnes of oil equivalent of energy from all different energy sources. Using the conversion factors above gives a value similar to the value from the EIA:
2280.6 MMTOE 0.0397 quads 90.5 quads
----------------------- * ------------- = ------------------------------
Total US Primary Energy 1 MMTOE Total US Primary Energy (2015)
The 9% discrepancy between the EIA report and BP reflects differences in reporting, estimation and accounting techniques. When dealing with the massive amounts of energy used by complex societies, perfect accuracy is impossible. Accordingly, energy statistics should generally be used as a guide rather than as statements of absolute, positive truth.
Resources vs Reserves
Resources are the estimated total amount of a fuel that is in the ground.
Reserves are the estimated amount of a fuel in the ground that can be extracted at a profit using current technology. No reasonable private company will produce a product that loses them money for very long, or they will cease to exist. Reserves will, therefore, vary from year to year based on changing technology, new discoveries, depletion of stocks, and market conditions. BP lists only reserves.
Approximate years left of a reserve can be estimated by dividing the reserve by the annual consumption. Note that this is a crude estimate since technologies and market conditions may increase or decrease reserves, and few countries satisfy their entire consumption demand with domestic resources. Also, as a resource becomes more scarce and expensive, transition to substitute fuels will result in reduced consumption and an extension of the life of a fuel. We will never run out of oil - it will simply become too scarce and expensive to use at the volumes we are currently using.
Oil
Crude oil is a mixture of hydrocarbons that formed from plants and animals that lived millions of years ago. Crude oil is a fossil fuel, and it exists in liquid form in underground pools or reservoirs, in tiny spaces within sedimentary rocks, and near the surface in tar (or oil) sands. The terms oil and petroleum are often used interchangeably.
BP publishes estimates of reserves of oil in different countries that have been proved to exist and can be extracted profitably using existing technology.
These values are expressed as thousand million tonnes (of oil equivalent) or billions of TOE. Using the conversion factors above, we can convert estimated US reserves to quads:
6.6 billion TOE 1000 MM 0.0397 quads 262 quads -------------------- * --------- * ------------ = -------------------- 2015 US Oil Reserves 1 billion 1 MM TOE 2015 US Oil Reserves
Similarly, annual oil production and consumption values are listed in MMTOE, and can be converted using the same procedure:
567.2 MMTOE 0.0397 quads 22.5 quads
------------------ * ------------ = ------------------
2015 US Production 1 MMTOE 2015 US Production
851.6 MMTOE 0.0397 quads 33.8 quads
------------------- * ------------ = -------------------
2015 US Consumption 1 MMTOE 2015 US Consumption
Oil production and consumption varies throughout the year and, accordingly, figures are often listed in thousands of barrels per day. Conversion to quads per year requires multiplication by a number of conversion factors and, accordingly, can result in slightly different values:
19396 thousand barrels 365 days 1 tonne oil 1 million 0.0397 quads 38 quads ---------------------- * -------- * ------------ * ------------- * ------------ = --------- Daily US Consumption 1 year 7.33 barrels 1000 thousand 1 MM TOE Annual US
By dividing production by consumption, we see that in 2015, the USA only produced 67% of the amount of oil that it consumed, necessitating imports, notably from places where the US needs to use its military to ensure consistent supply:
22.5 quads production ---------------------- = 0.67 = 67% 33.8 quads consumption
Many politicians from all parties have aspired to an energy-independent US. However, dividing proven oil reserves by annual consumption shows that independence cannot be achieved for long by more domestic oil drilling.
262 quads 1 year consumption 6.8 years ------------ * ------------------ = ------------ Oil reserves 38.3 quads Oil reserves
Natural Gas
Natural gas is a flammable gas that occurs deep beneath the earth's surface. Like petroleum, it is made of ancient plants and animals that were buried millions of years ago and broken down into hydrocarbons by pressure and heat.
BP reports natural gas reserves in trillions of cubic meters (TCM). One TCM contains a heat content of 35.7 quads. Converting 2015 estimates of US natural gas reserves to quads:
10.4 TCM 35.7 quads 371 quads
----------------------- * ---------- = -----------------------
US natural gas reserves 1 TCM US natural gas reserves
BP lists production of natural gas in billions of cubic meters per year. Dividing the value above by 1,000 billions per trillion, one billion cubic meters of natural gas contains 0.0357 quads. Converting 2015 US production values to quads:
767.3 billion cubic meters 0.0357 quads 27.4 quads
-------------------------- * ---------------------- = ------------------
2015 US Production 1 billion cubic meters 2015 US Production
Consumption can be converted using the same conversion factor:
778.0 billion cubic meters 0.0357 quads 27.8 quads -------------------------- * ---------------------- = ------------------ 2015 US Consumption 1 billion cubic meters 2015 US Production
From these values, we can see that in 2015 the US was largely independent in terms of natural gas production and consumption. However, dividing reserves by consumption, we see that this cannot continue forever.
371 quads 1 year 13.3 years
----------------------- * ---------------------- = -----------------------
US natural gas reserves 27.8 quads consumption US natural gas reserves
Politicians and industry representatives frequently assert that the US has 100 to 1,000 years of natural gas left. However, those assertions assume that the US can find ways to economically discover and exploit potential resources (not reserves) and natural gas frozen in the oceans as methane hydrates. Whether either of those outcomes is possible or desirable remains to be seen.
Coal
Coal is a combustible black or brownish-black sedimentary rock with a high amount of carbon and hydrocarbons. Coal was formed from solar energy stored millions of years ago by plants in swampy forests that were buried under layers of dirt and rock. As with petroleum and natural gas, pressure and heat converted those plants to coal, which powered the Industrial Revolution and which still accounts for a significant amount of the energy used worldwide.
A major challenge with assessing coal reserves and use is that there are different types of coal with significantly different amounts of heat content.
The best types of coal are anthracite and bituminous (hard coal) which contains around 26.7 million BTU per tonne. Sub-bituminous and lignite coals are of much poorer quality and contain only around 13.3 million BTU per tonne or half the heat of an equivalent ton of hard coal.
BP lists coal reserves by millions of tonnes in those two different categories. Multiplying by a million, one tonne of anthracite/bituminous has a heat content of approximately 0.0267 quads per million tonnes, and sub-bituminous/lignite has a heat content of approximately 0.0133 quads per million tonnes. Using the coal reserves figures for 2015:
108501 million tonnes 0.0267 quads 2897 quads
--------------------------------- * ----------------- = -----------
US anthracite/bituminous reserves 1 MM tonnes anth. US reserves
128794 million tonnes 0.0133 quads 1713 quads
---------------------------------- * ---------------- = -----------
US sub-bituminous/lignite reserves 1 MM tonnes lig. US reserves
2897 quads anthracite/bituminous
+ 1713 quads sub-bituminous/lignite
---------------------------------------------
4610 quads total US coal reserves
For simplicity, BP lists coal production and consumption in terms of millions of tonnes of oil equivalent. Using the conversion factors from the petroleum section above with 2015 estimates of US production and consumption:
455.2 million TOE 0.0397 quads 18.1 quads ----------------------- * ------------ = ----------------------- 2015 US coal production 1 MMTOE 2015 US coal production 393.3 million TOE 0.0397 quads 15.6 quads ------------------------ * ------------ = ------------------------ 2015 US coal consumption 1 MMTOE 2015 US coal consumption
The US exports coal, which accounts for the significantly higher amount of production than consumption.
Dividing reserves by annual consumption rates shows that the US has vast reserves of coal:
4610 quads 1 year consumption 296 years consumption
---------------------- * ------------------ = ----------------------
Total US coal reserves 15.6 quads Total US coal reserves
Since coal contains so much carbon, burning coal emits almost twice the amount of CO2 as natural gas (229 pounds for coal vs 117 pounds for natural gas per million BTU of heat energy). Advances in technology over the past two decades have made significant additional reserves of natural gas available as a less-expensive and more-environmentally-sensitive substitute for coal.
However, as demonstrated by the numbers above, unless there are significant additional discoveries or technological improvements, natural gas is not a permanent solution to America's energy needs. And given the expense and intermittency still associated with renewable energy sources, and the vast amounts of known coal reserves available just for the digging, it seems likely that coal could make a comeback in America's energy future, to the detriment of everyone (the tragedy of the commons).
Primary Energy
Primary Energy is the total amount of energy used by a country across all types of fuels. It is distinguished from secondary energy, such as electricity which is generated by using some kind of primary energy like coal or natural gas.
BP publishes estimates of primary energy consumption in terms of millions of tonnes of oil equivalent. Using the conversion factors above:
2280.6 MMTOE 0.0397 quads 90.5 quads
-------------------------------- * ------------ = --------------------------------
2015 Total US energy consumption 1 MMTOE 2015 Total US energy consumption
The US population in 2015 was around 320 million people. Dividing energy use by population gives per-capita energy use:
90.5 quads 1,000,000,000 MM BTU US 282 MM BTU ---------- * -------------------- * ------------------ = ----------- 1 year 1 quad 320,000,000 people Person/year
By contrast, 40 million Algerians use only around 20% of the energy per capita as Americans.
54.6 MMTOE 0.0397 quads 2.2 quads ---------- * ------------ = --------- Algeria 1 MMTOE Algeria 2.2 quads 1,000,000,000 MM BTU Algeria 55 MM BTU --------- * -------------------- * ----------------- = ----------- 1 year 1 quad 40,000,000 people Person/year 55 million BTU per capita in Algeria ------------------------------------- = 0.196 = 20% 282 million BTU per capita in the USA
Conversions to quads allows analysis of fuel use. For example, given the oil and primary energy calculations above, we can see the percentage of US energy use that comes from oil:
38.3 quads 1 year US primary energy
------------------------- * -------------------------- = 42% energy from oil
1 year of oil consumption 90.5 quads primary energy
If the US were to switch entirely to energy from coal, our reserves would last only half a century:
4610 quads 1 year US primary energy 56 years ---------------- * ------------------------ = ---------------- US coal reserves 90.5 quads US coal reserves