The linguistic trick about North Sea gas reserves
We’re all familiar with the claim that 90% of the Noth Sea’s gas (and or oil, to taste) reserves have already been lifted therefore more drilling won’t make any difference. So, we should continue to make that example to lesser J Foreigners of going all out for Net Zero and they’ll copy us. Sweetness and light ensue. We’ve certainly heard it from the likes of Bob Ward and such PR merchants and we are fairly sure we’ve heard it from the Sec of State.
This all depends upon a linguistic trick:
According to Offshore Energies UK, there are 51 known fields in British waters that could feed gas into UK pipes. Their progress has been halted not by geology but by politics and taxes.
Another 60 projects – mostly extensions to existing fields – have been held back for the same reason, says Ben Ward, market intelligence manager at the trade body.
It means, in total, an equivalent of 3.25 billion barrels of oil have been left to languish in the ground, accounting for both oil and gas projects.
And:
Dozens of North Sea oil and gas fields are being blocked from development by Labour’s net zero policies, a new analysis shows.
There are 51 known new fields in British waters that could be feeding domestic pipes but have been rendered “unviable” by current government policies, including the windfall tax and a ban on exploration licences.
On top of these, some 60 extensions to existing fields are being held back for the same reasons, according to trade body Offshore Energy UK (OEUK).
To explain the little trick. A mineral deposit (this applies to all such, including oil and gas, metals and so on) is what is there. We might know about it, might not, but it’s just what is there. A mineral resource is what we, in general, know is there, think could be lifted at a profit but haven’t wholly proven as yet. A mineral reserve is where we have fully proven - the location, size, geology, that we can lift it using current technology and make a profit at current prices. We know all of these things to the level of proof necessary to convince a bank to lend us the money to go do that too. Crucially, we also have the legal right to go do that. Banks don’t lend money if you cannot get a licence and yes, really, in the tight definition of “mineral reserve” is that insistence upon that licence, that legal right.
So, the current government - and, sadly, some before this one - will not issue more licences. Therefore reserves are declining as we extract from those currently licensed but do not prove up further deposits and or resources. The limitation is those licences and thus creation - yes, sorry, mineral reserves are man-made things - of new reserves, not the lack of deposits and or resources that can be converted. But we are most certainly being led to believe that it’s the deposits that don’t exist rather than the licences which do not. Whether this is ignorance on the part of those making the claim, an attempt to be misleading or just one of those flat out political lies we’ll leave to the reader to decide.
That 90% of N Sea reserves have been lifted is because no one will issue new licences which create new reserves. That’s it. The implication that there’s nothing left which can be turned into reserves and thus lifted is false. It’s even possible to believe that it’s a deliberate falsehood.
Isn’t it lovely to be ruled by such people?
Tim Worstall