Examine the Issues When Examinig Global Reserves of Energy
Referring to examples, examine the issues when assessing global reserves of energy (15 marks)
Global energy reserves refers to the quantity of energy sources known with reasonable certainty to exist and can be recovered with the current technology at an economically viable cost. Saudi Arabia has the largest reserves of oil, but Russia has by far the largest gas reserves. However, assessing reserves and evaluating a true value as to how much there is left in the world is very difficult as different people and organisations have different personal motives.
Oil companies such as Exxon Mobil and BP may try to hide actual figures to control prices and hide information from competitors. The price of oil which is controlled by OPEC can’t be high if predictions are given out there is abundance in oil supply. Basic demand and supply indicates that a surplus in supply causes prices to decrease. Therefore, oil companies may report lower figures in order to increase prices and make a larger profit. Similarly countries may also exaggerate figures. For example Saudi Arabia and Russia may also exaggerate how much oil and gas they have in order to retain power and withhold geopolitical importance.
Furthermore, energy reserves cannot physically be seen and so it is difficult to truly assess how many global reserves of energy there are in the world. Predictions made may therefore be an under or overestimate of energy resources. For example, the untapped reserves such as those in Brazil and the Arctic are a prediction based on scientific technology and geology. There is always a chance that incorrect information may be received or that the oil present is bad quality and hence unusable.
Political disputes also mean that everyone may not have access to some reserves of energy even if there is an abundance of energy such as oil or gas in an area. For instance, China and North Korea are politically sensitive areas. Examples of these are usually former communist countries and
Global energy reserves refers to the quantity of energy sources known with reasonable certainty to exist and can be recovered with the current technology at an economically viable cost. Saudi Arabia has the largest reserves of oil, but Russia has by far the largest gas reserves. However, assessing reserves and evaluating a true value as to how much there is left in the world is very difficult as different people and organisations have different personal motives.
Oil companies such as Exxon Mobil and BP may try to hide actual figures to control prices and hide information from competitors. The price of oil which is controlled by OPEC can’t be high if predictions are given out there is abundance in oil supply. Basic demand and supply indicates that a surplus in supply causes prices to decrease. Therefore, oil companies may report lower figures in order to increase prices and make a larger profit. Similarly countries may also exaggerate figures. For example Saudi Arabia and Russia may also exaggerate how much oil and gas they have in order to retain power and withhold geopolitical importance.
Furthermore, energy reserves cannot physically be seen and so it is difficult to truly assess how many global reserves of energy there are in the world. Predictions made may therefore be an under or overestimate of energy resources. For example, the untapped reserves such as those in Brazil and the Arctic are a prediction based on scientific technology and geology. There is always a chance that incorrect information may be received or that the oil present is bad quality and hence unusable.
Political disputes also mean that everyone may not have access to some reserves of energy even if there is an abundance of energy such as oil or gas in an area. For instance, China and North Korea are politically sensitive areas. Examples of these are usually former communist countries and