SPE 121775

Role of Conventional and Unconventional Hydrocarbons in the 21st Century:

Comparison of Resources, Reserves, Recovery Factors and Technologies
Istvn Lakatos, SPE and Julianna Lakatos Szab, Research Institute of Earth Sciences, University of Miskolc and
Geoengineering Research Group of the Hungaian Academy of Sciences, 3515 Miskolc-Egyetemvros, POB 2.,
Hungary

Copyright 2009, Society of Petroleum Engineers

This paper was prepared for presentation at the 2009 SPE EUROPEC/EAGE Annual Conference and Exhibition held in Amsterdam, The Netherlands, 811 June 2009.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its
officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to
reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.

Abstract
The paper deals with the availability of natural hydrocarbons until 2100. Starting point of the evaluation is that the global
demand will not be met by production of conventional oil and gas. Basis of the discussion is the comparison of available
resources and reserves, recovery factors and technologies. The analysis comprised oil shale, tar sand, gas shale, tight sand gas,
coalbed methane and gas hydrates. Taking the data of competent organizations into account, obviously the global resources of
unconventional oil and gas significantly exceed the availability of conventional natural hydrocarbons in spite of the fact that
their recovery efficiency is extremely low.
Although the production cost (operation expenditure) of unconventional hydrocarbons is usually much higher than those of
the conventional ones, industrial scale production of tar sand oil, tight sand gas and coalbed methane has started over two
decades ago and their contribution to total oil and gas production is already substantial in several countries (US, Canada). The
authors stated, however, that wider application of sophisticated technology to recover unconventional hydrocarbons needs
more extensive and intensive R&D activity and further, new paradigms are necessary in education, research, production, field
management, and governmental regulation.

Introduction
Energy demand is expected to quadruple in the 21st century (Fig. 1). An energy mix that is undergoing a transition from the
current dominance of fossil fuels to a more balanced distribution of energy sources will meet the energy demand. Although the
relative importance of hydrocarbons apparently will decrease from 60% (present) to 15% (in 2100), roughly 250260 billion t
of crude oil (annually 2.5 billion t on average through the whole century) must be produced to meet the worldwide demand.
That task is enormous if we consider that a little bit than 100 billion t of crude oil has been produced since 1850 and the
average production rate was about 0.7 billion t/y. As we will see in the next chapter, only 390 109 t crude oil may exist in
proven and probable reservoirs. Namely, the converging opinion of different agencies1-7 is that the recovery rate of
conventional hydrocarbons must be increased from 3335% at present to 6570%. Obviously, sophisticated recovery
technologies must be routinely used at mostly matured oil fields in the future, however, a serious concern still exists whether
that goal might be fulfilled or not.
Through the past two decades, the global economic growth and oil demand increased on average by 3.73% and 1.95%,
respectively (Fig. 2). Consequently, as a short analyzis made by Yergin8 a minimum 0.5% increase in oil production is needed
to boost the world economy by 1%. Based on that prediction, the industrial oil demand will increase from 20 to 38 MBD (from
1.3 to 2.31 Gt/y) between 1980 and 2030; meanwhile the total oil production probably drops to less than 3 Gt/y by the end of
that period1. Therefore, the skeptic opinions are supported by the facts that just the fuel consumption of transportation or
hydrocarbon demand by industry alone will exceed the total crude oil production expected after 2040. It is no doubt, that
additional hydrocarbon resources and industrial reserves are keenly necessary to maintain the rate of progress, otherwise the
dwindling supplies of oil and gas, obsolete power net-works and new environmental regulations threaten the western word
into a new energy crisis. Consequently, the mankind is becoming again vulnerable to shortage in hydrocarbons, price shock,
supply interruptions, and in the worst case, political and military blackmail (Emerson T.: Newsweek, April 2002).
SPE 121775 2

Definition of Unconventional Hydrocarbons

Over the past decades, various attempts have been made to define the unconventional oils and gases. First, the distinction
between conventional and unconventional hydrocarbons has been made based on economics3. However, because of the
continuous research and mainly due to the radical change of oil and gas prices, some hydrocarbon reserves proved uneconomic
to recover earlier are now considered as matured and viable to produce. Therefore, a geological, geochemical definition or
unique chemical and physical character of organic, naturally occurring carbon and hydrogen containing materials may form a
basis for set-up a definition of unconventional hydrocarbons. Their common feature is also that they form regionally
pervasive accumulations, which are usually independent of structural and tectonic traps. According the generally accepted
classification, the following materials are considered as unconventional hydrocarbons:
1. Unconventional oils:
oil shale
oil/tar sand
pyrobitumen
2. Unconventional gases:
gas shale
gas sand
tight sand gas (deep gas)
basin concentrated gas accumulation
associated gas
coalbed methane (seam, gob, ventilation gas)
methane hydrates
In the following sections of the paper only the main types of unconventional oils and gases having substantial global
resources will be discussed. We will focus on the resources and industrial reserves reflecting the wide gap between the
availability and deliverability at the present state-of-the art of technology.

Hydrocarbon scenario at present

Analyzing the production and demand of oil characterizing the past five years despite periodic fluctuation of oil price,
strategic reserves, rapid increase of demand in some developing countries and regions, economic, political and military
interventions the trends seems to be balanced for a superficial observer9. According to these data, recently the production is
slightly increasing and running parallel to the demand (Fig. 3). Similarly, the contribution of OPEC and other countries to the
total world production is practically constant (~40:60%, Fig. 4).
Evaluating the background of the favorable circumstances mentioned above, however, the apparent facts are not so
comforting at all. Among others, the following reasons may give rise to concerns:
1. Reserves of hydrocarbons, particularly oil, show uneven distribution among the regions4, 10-13. Namely, the Middle
East has outstanding potential in conventional hydrocarbons at present and that situation will remain so largely in the
future (Fig. 5).
2. Although nearly 60% of the oil production derives from non-OPEC countries, the recovery conditions are gradually
worsening in those regions: the hydrocarbons are produced from matured fields and sometimes in harsh environment
(offshore and permafrost).
3. Since the majority of oil is produced from highly depleted reservoirs, the oil rate is decreasing; meanwhile the water
cut is increasing. For instance, the average water cut was around 75% in 1999, and five years later, the characteristic
figure is already 80%. Accordingly, the production cost is steeply rising in majority of the oil fields.
4. Because of the status quo of reserves and field conditions, the anticipated production lifetime, calculated by the
present production rate, renders an alarming future. The data in Fig. 6 suggest that only the Middle-East countries and
Venezuela, having quite different situations, have longer production lifetime than a quarter of century11.
Although a robust search for alternative energy sources is right under way and utilization of renewable energies might play
a fundamental role in certain countries, it seems very probable that the natural hydrocarbons will remain the mainstay of
energy supply until the middle of the 21st century. The challenge, we face with, is gigantic and numerous Herculean tasks must
be solved in the future. One of the greatest challenges of the production and reservoir engineering is to increase the recovery
efficiency. Looking back to the past decades, we may conclude that a remarkable progress had been made in rejuvenation of
the old drilling and production technologies. As a result, the average recovery efficiency increased by 10% within a short
period of 20 years and now it is about 35%. Analyzing the contributions of different factors we may say that mostly the
reservoir engineering development were the driving force; meanwhile the role of EOR methods remained marginal. Now the
question is the following: is it possible to maintain this trend in the future? Definitely not for long time and that situation will
change! The other option is to accelerate the recovery of unconventional hydrocarbons. However, that option might be bright
though, we are facing with unprecedented and tremendous new tasks. In the next chapter, the potential of unconventional oil
and gas will be overviewed pointing out what is reality and what is myth.
3 SPE 121775

Potential of Unconventional Oils

Correct evaluation of the potential of unconventional oils needs a stable basis of comparison. It is well known that roughly 110
-120 Gt of crude oil was produced between 1850 and 2005 from different occurrences. According to an optimistic prediction
(UN Energy Map of the World, 1995), the proven global oil reserve is 170 Gt (1.015 Tbbl). In addition, the world
undiscovered (yet-to-find, YTF) petroleum resource with different probability reported by the US Geological Survey14 is the
following:
Probability Amount
95% 394,381 MMBO (~ 65 Gt)
50% 607,458 MMBO (~101 Gt)
5% 1,202,168 MMBO (~200 Gt)
Mean 724,228 MMBO (~120 Gt)
As proved by the data listed above (170 Gt proven and 120 Gt undiscovered, but very probable), plus the potential of
IOR/EOR (100 Gt), the following balance can be setup:
Proven industrial reserve : 164 Gt
Undiscovered oil (YTF) : 155 Gt
Total : 310 Gt
Recoverable (50% efficiency) : 162 Gt
Demand until 2100 : 260 Gt
Production lifetime : 40 years
Obviously, the total available oil amount is definitely less than the total global demand oil by the end of the century
calculated by the probable recovery efficiency. In the up-coming section, these data will serve as a basis of comparison to
evaluate the potential of unconventional oil resources and reserves.

Oil Shale
Oil shales are composed of extremely low permeable carbonate minerals (>85%) and organic matter (<15%). Basically, the
sedimentary source rock containing the prematured biomass is characterized by such an organic matter, which is mostly
insoluble kerogen (90%) and only 10% bituminous organic. Since those materials are thermally unstable, with application of
heat (>250 C) the bitumen and partially the kerogen can be transformed to liquid products15-18. The technologies, both in-situ
and ex-situ productions of solid materials and recovery of usable hydrocarbons, are very complex and depending on conditions
of occurrences. Oil shales can be found as widely distributed deposits throughout the world. As shown in Table 1, all
continents have substantial resources in oil shales; however, high quality shales (with substantial amount of recoverable liquid)
are available only in Asia, Africa, and North America17-18. Based on the listed data, the global resource of recoverable shale oil
is estimated to ~520 Gt (3.1 Tbbl, Table 2).
Unfortunately, the recoverable shale oil from the different deposits significantly depends not only on shale quality, but also
on geological and mineralogical conditions, depth, and temperature of deposits, production technology, etc. Thus, the highly
probable amount of recoverable shale oil is predicted to be 30 Gt (0.085% OOIP), but there is a good chance to recover all
together 900 Gt syncrude with advanced technology, which already corresponds to a much better, but still very low recovery
efficiency of 0.26 % OOIP. That amount of oil shale can be found in a couple of countries, but mostly in US (Fig. 7). Due to
the obvious difficulties of technologies and the low recovery efficiency, the utilization and commercialization of shale oil is
not attractive yet despite the fact that its production in US, Russia and China has started decades ago. As a conclusion,
however, it might be stated that the potential of oil shale resources is 67 times higher than that of the convention crude oil.
The global resource of oil shale, however, is modifying time by time. Recently, the US government announced that huge
oil shale deposit was found in the Rocky Mountain. The gigantic accumulation in depth of 300 m may contain more that 2
Tbbl (330 Gt) recoverable shale oil. If this assumption is correct, the global industrial reserve of shale oil is doubled in 2006
and share of US may become a determinative factor in production of shale oil. Taking the joint resources of conventional and
unconventional oil in North America into account, this region might be the New Middle-East in the coming years.

Oil and Tar Sand

The oil sand (frequently mentioned also as tar sand) can be found in shallow, unconsolidated sand layers containing 1012%
bitumen or heavy oil. The hydrocarbon phase is a dense, sticky, semisolid material with min. 83% carbon content. Their
viscosity classifies them as low viscosity (1001,000 mPa s), medium viscosity (1,00010,000 mPa s) and high viscosity
(>10,000 mPa s) oils. The former two ones are viscous liquids, while the last one is solid at ambient conditions. Depending on
their viscosity, fluid (usually thermal) recovery methods and conventional (e.g. open pit) mining can produce them if the pay
zone is a near-surface deposit. The oil-containing raw material is then retorted to produce liquid hydrocarbons (syncrude) and
finally refined to obtain end products18.
The global resource of sand oil is estimated to be 620 Gt (3.74 Tbbl). According to the report entitled Oil Sand Global
Market Potential published by the Energy Business in 2007 tar sand accumulations were explored in more than seventy
countries. Majority of tar sand can be found only in the Orinoco Basin (Venezuela) and in Alberta, Canada. It is worth
SPE 121775 4

mentioning, however, that recently the BP Statistical Review reported only 169 Gbbl (26.5 Gt) recoverable reserve in
Canada11. That is a fraction of the figure disseminated earlier and indicating a very low recovery factor. The importance of tar
sand in Canada is well illustrated by the fact that the conventional oil reserve of the country represents only 0.5% of the total
fluid hydrocarbon potential. The deposits in provinces of Lloydminster, Peace River, Cold Lake, Athabasca and Wabasca are
famous and well known from the middle of the 19th century17-18. The complex extends to 48,000 km2 with 560 m pay zones in
0700 depths. A private company in Canada has attempted to exploit the deposit already in 1880 and this region became (and
still is) the main focus of tar sand (oil) production. The companies, however, have enormous technological difficulties in
recovery of oil from tar sand. Both in-situ (mostly Steam Assisted Gravity Drainage, SAGD) and ex-situ methods were tested,
and as Strausz and Lown16 pointed out various chemical and even microbial recovery methods were tested through many
decades. After all, thanks to the enormous financial investments and the technological progress, the syncrude production is
steeply increasing as shown in Fig. 8. At present, mostly open pit mining and post hot water treatment are the main elements
of bitumen production. However, 70% of the reserves is stored in deep layers and therefore, sophisticated SAGD methods with
upgrading technology will be indispensable for further recovery of bitumen and heavy oil from tar sand deposits.
Unfortunately, reliable data for recovery efficiency is not available now, but taking the resources or the reserves into account,
the present efficiency is still extremely low. That fact will be proven even more if the potential of the ex-situ production
technology will be gradually replaced by in-situ recovery methods.

Potential of Unconventional Gases

The global situation in natural gas seems to be better a little, but not comforting. According to a widely accepted forecast, the
proved (industrial) reserve reported by BP Statistical Review11 is 179.53 Tm3 by the end of 2004. According to the US
Geological Survey, the undiscovered gas resources total up to a probable maximum of 147.16 Tm3, which is already less than
the proved industrial reserves. Actually, the available global gas reserve is much lower if the gas recovery coefficient is less
than the unity (100%).
Probability Amount
95% 76.21 Tm3 (2,691 Tcf)
50% 122.72 Tm3 (4,333 Tcf)
5% 251.73 Tm3 (8,871 Tcf)
Mean 147.16 Tm3 (5,196 Tcf)
Using the USGS information the following scenario characteristics the natural gas availability:
Proven reserve : 160 Tm3
Undiscovered oil (yet to find) : 150 Tm3
Total : 310 Tm3
Recoverable (70% efficiency) : 217 Tm3
Demand until 2100 : 525 Tm3
Production lifetime : 63 years
As shown, the availability gap is substantial, viz. there will be a significant shortage in gas supply from the middle of the
century if the contribution of unconventional gases remains at low level. Unfortunately, a common feature of the
unconventional gas resources is that the different forms of gas is present in very low permeable (<0.1 mD) tight porous media
or in the original source rock (BCGA). Therefore, their recovery needs special approaches and techniques being different from
conventional gas production. Generally, the following facts characterize the unconventional gas production:
1. Productivity of wells is very low (6 10215 105 m3/d);
1. Productivity declines rapidly after opening the well;
2. At low productivity the production is stable for decades;
3. Thickness of pay zones are usually exceeds some hundred meters;
4. Conductivity and porosity of formation can be traced back to microfractures and not pores;
5. Majority of unconventional gas fields can be found in deep layers (<4000 m), hence extreme temperature and
pressure govern the hydrodynamic processes.

Gas Shale, Tight Sand Gas

The shale gas is a natural gas contained predominantly in fine, low permeable sedimentary rocks, basically in consolidated
clay-sized particles. The gas retained in such deposits exists in form of adsorbed material on kerogens, trapped in pore spaces
and as an inter-bedding material with shales. Although the shale gas is usually very clean, it is hard to recover from deposits
because of the structural complexity and low hydrodynamic conductivity of shales. Because of these circumstances the
recovery efficiency of shale gas is only 1520% of the resources, compared to 75% for conventional reservoirs. Tight gas
sands are defined as sandstone formation with less, than 0.1 mD permeability. Since such gas reservoirs forms in deep (>4000
m) layers under the effect of high lithostatic (overburden) pressure, the gas produced from such systems is often called deep
gas. Recovery efficiency of tight sand gas is also problematic and special drilling and hydraulic fracturing technology is
necessary to obtain measurable and long-lasting production rate from deposits.
5 SPE 121775

In spite the facts that occurrence of unconventional gases is uniformly dispersed on earth, reliable data for global shale and
tight sand gas resources are not available now. The only guiding information was reported by the EIA6, 19-20 in 2005. According
to this forecast, the maximum conventional gas equivalent of energy is 400 EJ and if we want to meet the world gas demand
after 2040 and to mitigate the decline of gas production an addition 200 EJ equivalent must be produced in different forms of
unconventional gases. Much detailed data were reported for shale and tight sand gas resources for US. The technically
recoverable shale and tight sand gas resources (industrial reserves) are the following:
Shale gas : 11.5 Tm3 (321.0 Tcf)
Tight sand gas : 3.1 Tm3 ( 85.9 Tcf)
Taking the probable recovery efficiency (20%) into account, the actual OOIP resources might be five times higher of
mentioned volumes, which represent an unbelievable high economic potential in US. This is clearly demonstrated by the
production scenario of shale and tight sand gases shown in Fig. 9. As indicated there, the annual production of shale and tight
sand gas is about 120 Gm3 at present, but by the end of 2020, it will be doubled volume. Converging opinions agree, however,
in a couple of important preconditions. Namely, this goal can be attained only by significant improvement of exploration,
drilling and production technology and extending the operation to new reservoirs. Although the future sets up numerous tasks
for the production sector, the achievements are noteworthy: nearly 20% of the total natural gas production derives from shale
and tight gas and that share will increase up to 24% within two decades.

Coalbed Methane
The methane is a native component of coal. The highly pure gas is present in coal seams as pore gas, adsorbtivum at pore
surface and mostly as CH4/C solid (interstitial) solution. The coal resources in the world are estimate at 1.083 Tt with 40%
high ranking bituminous black coal content11. The bituminous coals may contain high amount (20100 m3/t) of methane.
Although coal resource of the world is enormous, its 70% is unminable (90% of the 260 Gt resources in US) because of seam
integrity, depth, temperature, and microstructure of coal. Consequently, the global coalbed methane (CBM) represents
considerable value for the national economy.
According to the Energy Bussiness Report3 the global CBM resource is predicted to be 7 Tm3 by pessimistic evaluation,
but some optimistic assessment indicated 2050 Tm3 gas volume. Taking the pessimistic value, the distribution of CBM
among regions is reflected by the data in Fig. 10. The US is a leading country in production and commercialization of coalbed
methane. The gas with different methane content (580%) is produces from intact coal seams, stopped shafts (gob gas) and
ventilation gas. Using special separation technology at surface the output gas has methane content over 95%. In the United
States, the industrial scale production has started in as early as 1986 and extending the production to additional mines the daily
CBM production is exceeding 14.3 Gm3 in 2000, which represents already 2.7% in the total natural gas production in US (Fig.
11). According to the present energy strategy, the share of CBM will continuously increase until 2020 reaching 42.8 Gm3
(5.4% of the cumulative gas production).

Methane Hydrates
The gas hydrates (clathrates) are inclusion type compounds formed by low molecular weight hydrocarbons and water under
specific pressure (>20 bar) and temperature (<10 C). Their formation and decomposition is reversible, but the process has
some hysteresis. The hydrocarbon content of hydrates depends on types (structure) and the hydrate-forming compounds. The
hydrate formed by methane has the highest CH content (129 kg/t or 180 nm3/t) as shown in Table 3. They may be found as
boulders at sea and ocean beds, thin layers in sediments and thick zones in permafrost regions down to 400 m depth21-23. They
preferentially accumulate in deep ocean troughs, margins of continents and arctic area of continents (Table 4). Despite the
special location of occurrences, their absolute amount is unbelievably huge. Nearly 53% of the total carbon-containing organic
material (18.8 Tt) on earth is bound to hydrates (Fig. 12). Based on some data, the amount of organic carbon in hydrate is
about 10 Tt, which correspond to 13.3 Tt methane by weight or 18.8 Pm3 gas by volume.
The later figures indicate that the volume of methane in hydrates is greater by orders of magnitude than the volume of
proven and predicted natural gas resources on earth. The above-mentioned assessment is a pessimistic one and it is calculated
by the amount of organic carbon on earth. Another prediction, considering the hydrate occurrences, suggests that the volume
of hydrate might be in range of 2.828.0 Pm3, which may contain 0.55.0 Em3 methane (methane equivalent). Relatively
accurate data were reported for occurrences in US; the reported data predict 6.5 Pm3 hydrate that may contain 1.1 Em3
methane. Unfortunately, the global hydrate resources seem abundant though, perhaps in inexhaustible troughs, but the actual
recovery rate, even in the future, will be extremely low. According to a reliable evaluation in US, only 0.6% of the resources
can be utilized commercially (plus the 0.4% recovered already); meanwhile 99% of the hydrate is practically unusable (Fig.
13).

Production Cost of Unconventional Hydrocarbons

The hydrocarbon production has always been and still is a profit-oriented enterprise. The industrial attitude and strategy are
exclusively determined by the oil price. In the near past, when the crude price was less than 11 $/bbl, It was characteristic that
hundreds of oil fields had to be abandoned because of low profitability. In contrast, the production at marginal and depleted
fields the production were resumed when the oil price started soaring; above 60 $/bbl the price already provided comfortable
SPE 121775 6

circumstances for extensive application of IOR/EOR methods. As mentioned earlier, the unconventional hydrocarbons were
incorrectly defined as natural resources hard to produce using even sophisticated technologies. Although sharp distinctions
between conventional and unconventional hydrocarbons cannot be made, this approach implicitly reflects the long lasting
belief that at present, the capital investment and production cost of unconventional hydrocarbons is far above the overall
expenditure of conventional oil and gas production.
That conviction is partially proved by the data in Fig. 14, where the forecasted operation expenditure (OPEX) is plotted as
a function of virtual cumulative oil production. The faulty assumption presumes that having produced 500 Gt oil, the resources
entirely run out, and the oil demand can be complied only by unconventional hydrocarbons. The upward tendency of data also
clearly shows that as the production proceeds, the operation should be extended to challenging fields and harsh environments.
Namely, the focus of activity is gradually shifted to heavy oil-bearing field. Since ~ 120 Gt of oil had been produced until
now, the average production cost is still in the first one third of scale. The average values, however, shade the fact that the
production cost in the Middle-East region is less than a couple of dollars, meanwhile it may exceeds 40 $/bbl in permafrost
and off-shore areas. In addition, analyzing the trend in Fig. 14, we may conclude that there is no breaking point in operation
expenditure, viz. the production cost of heavy and unconventional oil is commensurable, and the expenditure is practically
uniform between 300 and 600 Gt cumulative oil production.
The OPEX of unconventional oils is in range of 1020 $/bbl through production of 100150 Gt oil (between 3000 and
4000 bbl in Fig. 14). That is really much higher than the cost in Middle-East region today. However, the oil price (Brent oil) is
fluctuating between wide limits, it was close to 150 $/bbl in the middle of 2008, but at time of writing this paper it is below 50
$/bbl (Fig. 15).However, even that low average price may provide reliable basis for recovery of unconventional hydrocarbons.
Thus, it is needless to say, that recovery of tar sand and shale oil, and production of CBM is still profitable even today, and
they may modify the scenario of fossil fuels and the fine energy mix in the coming years20. The high oil price had also a
beneficial effect on development of more efficient technologies and as a result, using those advanced methods, the operation
expenditure could be substantially decreased. For instance, the average production cost in Canada is close to 10 $/bbl, and that
progress was out of reality a couple of years before.

Notes
The middle and long-term analysis of hydrocarbon scenario could not include the evaluation of short, spike-type changes of
the market, the balance of production/demand. As the soaring price of hydrocarbons could not be foreseen a year ago, it was
also stunning its radical drop recently. The Douglas-Westwood energy business analyst S. Kopits wrote in 11th February 2009
Oil industry players find themselves buffeted by contradictory trends. On the one hand, the oil supply has not expanded
adequately in recent years to accommodate demand from emerging markets. On the other, the current recession has let to a
collapse of near-term demand. Energy investors and oil industry managers are left mulling how to respond to the current
environment and whether forge ahead with investment or wait cautiously on the sideline (Douglas-Westwood News Release /
Research Note). Definitely, the recession has significant impact on oil demand. The forecasted drop in daily demand might be
as high as 7% if the recession will be sever, but not catastrophic. Since the recessions may last 1-2 years, the recovery global
economy will be eminent again, and the effect of the financial crash will be negligible on long-term trends.

Conclusions
1. The global demand will not be met by conventional oil and gas production after 20402060. Hence, exploration and
production of unconventional oils and gases will be a key factor to maintain the progress of humankind.
2. Global resources of unconventional oils and gases significantly exceed the availability of conventional natural
hydrocarbons.
3. Unfortunately, the recovery efficiency of unconventional hydrocarbons is much less than of conventional oils and gases.
Despite that fact, then recoverable unconventional hydrocarbons far exceeds the industrial reserves of crude oils and
natural gas.
4. Production of some unconventional hydrocarbons (e.g. shale oil, sand oil, and tight sand and deep gas, coalbed methane)
has already started in different countries.
5. Recent trend of oil and gas price may accelerate the production of unconventional oils and gases. Production cost (OPEX)
of tar sand oil and coalbed methane is now competitive with recovery cost of conventional oils and gases.
6. The low recovery efficiency of hydrocarbon production, particularly of unconventional oil and gas, may become crucial
element of future shortage. Therefore, sophisticated EOR and EGR methods, particularly chemical technologies must
become mainstay of progress in recovery efficiency.
7. Application and implementation of chemical methods are omnipresent and deeply penetrating into the hydrocarbon
industry (exploration, drilling, production, transportation and environmental areas), and as forecasted by many experts and
organizations, they might be indispensable to meet the global demand in the 21st century.
8. Wider application of sophisticated recovery technology of unconventional oils and gases require more extensive and
intensive R+D activity. The efforts are accelerating and getting more and more attractive in hydrocarbon depending
countries.
7 SPE 121775

9. New paradigms are necessary in education, research, production, field management, and governmental regulation.
Cooperation of all partners in that segment of society will be a key factor the meet permanently the hydrocarbon demand
locally, regionally, and globally in the world.

Acknowledgments. The authors wish to express their appreciation to the Hungarian Science Foundation for their financial
support in frame of the OTKA T047342 and T048715 projects

References
1. The Outlook for Energy A View to 2030, Exxon Mobil Report (2006)
2. BP Statistical Review of Word Energy, 2005, British Petroleum, June (2005)
3. Energy Business Report: Unconventional Gas Outlook: Resources, Economics and Technologies, (2006)
4. Energy Needs, Choices and Possibilities: Scenario to 2005, Shell International Report (2001)
5. Global Energy Perspectives to 2050 and Beyond, World Energy Council (WEC), International Institute of Applied
System Analysis, London (1995)
6. International Energy Outlook, 2004, Energy Information Administration, US Department of Energy, Report:
DOE/EIA-0484 (2004)
7. Peak Oil Primer and Links, Energy Bulletin, Peak Oil News Clearinghouse (2006)
8. Yergin, D.: Meeting the Growth Challenge, World Petroleum, Special Issue, p. 20-22 (2005)
9. Performance Indices SPE Petroleum Technology, (1999-2006)
10. Putting Energy in the Spotlight, BP Statistical Review of World Energy, June (2005)
11. Quantifying Energy - BP Statistical Review of World Energy, 2007, British Petroleum, June (2007)
12. The Outlook for Energy: A 2003 View, Exxon Mobil Report (2004)
13. World Energy Outlook, International Energy Agency, OECD, Paris (2002)
14. US Geological Survey, World Petroleum Assessment, 2000 Descriptions and Results (2000)
15. Yen, T.F.: Science and Technology of Oil Shale, Ann Arbor Sciences Publisher Inc., Ann Arbor (1976
16. Strausz, O. P., Lown, E. M. (eds): Oil Sand and Oil Shale Chemistry, Verlag Chemie, New York-Weinheim (1978)
17. Ranney, M. W.: Oil Shale and Tar Sands Technology, Noyes Data Corporation, Park Ridge, (1979)
18. Schumacher, M. M. (ed.): Enhanced Recovery of Residual and Heavy Oils 2nd Edition, Noyes Data Corporation, Park
Ridge, (1980)
19. Energy Information Administration International Energy Annual: World Estimated Recoverable Oil, Natural Gas and
Coal, 2004, US Department of Energy, Washington, (2007)
20. Mc Callister, T.: Impact of Unconventional Gas Technology in the Annual Energy Outlook 2000, Energy Information
Administration, Midterm Analysis and Forecasting (2000)
21. Berecz E., Balln-Achs M.: Gzhidrtok/Gas Hydrates, Akadmiai Kiad, Budapest (1980)
22. Kennett, J. P.: Methane Hydrates Issues and Opportunities Report of the Methane Hydrate Advisory Committee, U.
California, Santa Barbara, (2002)
23. Makogon, Y. F.: Hydrates of Hydrocarbons, PennWell Books, Tulsa, (1997)
SPE 121775 8

Table 1: Shale resources (OOIP) of the world, 109 bbl

Region 2040 l/t 40100 l/t 100400 l/t
Africa 450,000 80,000 4,000
Asia 590,000 110,000 5,000
Far-East 100,000 20,000 1,000
Europe 140,000 26,000 1,400
N-America 260,000 50,000 3,000
S-America 210,000 40,000 2,000
Total 1,750,000 326,000 16,000

Table 2: Recoverable shale oil reserve of the world, 109 t

Region 2040 l/t 40100 l/t 100400 l/t
Africa 90
Asia ? 14 70
Far-East ? 1
Europe ? 6 40
N-America 2,200 1,600 520
S-America ? 50
Total 2,200 2,400 720

Table 3: Structure and gas content of different hydrates

Hydrocarbon Composition Hydrocarbon content,

(theoretical) kg/t m3/t
Methane CH4 6H2O 129 180
Acetylene C2H2 6H2O 194 145
Ethylene C2H4 7H2O 181 145
Ethane C2H6 8H2O 172 128
Propane C3H8 18H2O 119 61
Natural gas Ma 9H2O 109 122

Table 4: Number of main hydrate occurrences in the world

Region Number of occurrences
Continental 7
Sea, ocean
Pacific ocean 22
Atlantic ocean 15
Indian ocean 1
North sea 6
Antarctic area 3
Other 2
9 SPE 121775

1800
1600 Waste
Geotherm
1400
Bio
1200 Solar

Energy, EJ
Wind
1000
Nuclear
800 Hydro
Gas
600
Oil
400 Coal
200 Wood

0
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

st
Fig. 1: Energy mix in the 21 century

10
GDP
8
Oil Production

6
Annual change, %

-2

-4
1970 1975 1980 1985 1990 1995 2000 2005

Fig. 2: Annual change of global GDP and oil production

100
Production/demand, 10E+6 bbl/d

80

60

40

Production
20
Demand

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Fig. 3: Change of oil production and demand in recent years

SPE 121775 10

80

60

Production, MBOPD
Other
OPEC
40

20

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fig. 4: Daily oil production in the OPEC and other countries

700

600
Reserve, Billion bbl

500

400

300

200

100

0
M-East S/M- Africa FSU N- F-East W -Europa
America America

Fig. 5: Reserves of crude oil in different regions

200

160
Lifetime, year

120

80

40

0
a

ay
r
ia

o
t

ua l

a
O r

en

ne ria
n

Ku q

Je n

SA
AE

K
i
ai

do
a

z
el

ic

si
I ra

I ra

U
ab

at

w
w

Ve Sy
m
m

zu

ex

us
U
U

Br

or
Q
Ar

R
Ec

N
S-

Fig. 6: Production lifetime in the main oil producing countries (at the present oil rate)
11 SPE 121775

Jordan
Estonia
Marocco
China
Brasil

Australia

USA

Fig. 7: Recoverable shale oil reserves of the world. Total reserve: 5.51 Tbbl (~900 Gt)

1400

1200

1000
Production, Mt

800

600

400

200

0
1880 1968 1980 1990 2000 2010 2020

Fig.8: Production of syncrude oil from tar sand in Canada

200

Shale gas
160
Tight sand gas
Production. Gm3

120

80

40

0
1990 1995 2000 2005 2010 2015 2020

Fig. 9: Production of shale and tight sand gas in US

SPE 121775 12

Australia Germany Other

4.7% 1.2% 2.0%
FSU
Canada
27.5%
27.5%

Anglia
Poland
0.7%
1.2%
USA
5.5%
China
29.6%
Fig. 10: Distribution of CBM resources in the world

100

New mines
Daily production. Mm3/d

80
Old mines
60

40

20

0
1986 1988 1990 1992 1994 1996 1998 2000

Fig. 11: Daily CBM production in US

Water Vegetation
Soil Peat
Others 7,5% 5,2% 4,4%
2,7%
0,4%

Fossils
26,6%

Hydrate
53,2%

Fig. 12: Distribution of organic carbon on earth

13 SPE 121775

Recoverable Others
Recovered
0,6% 11,0%
0,4%

In-place
88,0%
Fig. 13: Hydrate scenario in the United States of America

25

Unconventional
20 Conventional

15
OPEX, $/bbl

10

0
500 1000 1500 2000 2500 3000 3500 4000

Cumulatve oil production, 10E+9 bbl

Fig. 14: Operation expenditure of conventional and unconventional oil
as a function of cumulative production

140

120

100
Oil price, $/bbl

80

60

40

20

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Fig. 14: Operation expenditure of conventional and unconventional oil