Natural resource development over time

Question 1

What are proven reserves?

Answer 1

Highly likely to be extracted for commercial use.
Have economic viability and current tech allows this.

Likelihood of commercial extraction is at 90% or above.

Question 2

Probable reserves

Answer 2

Thought to exist
- Geological terrain suggests reserves but no tests have yet been taken.

Likelihood of commercial extraction is above 50% but below 90%.

Question 3

Security and supply of resources relates to both physical and geopolitical risks.

What physical risks are there?

Answer 3

• Tech available - advanced enough for viable extraction?
• location - accessible?
• Quality of the resource?
• Quantity of the resource.

Question 4

What geopolitical risks are there to extracting a reserve?

Answer 4

• Production located in a small number of countries
• confidence an individual country has in trading with producers
• TNCs influencing government decisions.
• Chance of conflict, war, political tension.

Question 5

Outline the concept of the ‘Cycle of Resource Development’:

Answer 5

1) Available land/sea resources
2) Exploration rights and licences.
3) Evaluation and EIA
4) Construction
5) Extraction
6) Closure of site
7) Reclamation and monitoring site.

Question 6

What is the Friedman diagram?

Answer 6

Explains resource frontiers.

Question 7

Outline the CORE in the FRIEDMAN diagram.

Answer 7

Core = attracts investment due to advantageous location (usually capital cities).

Question 8

Outline the UPWARD TRANSITIONAL AREA in the Friedman diagram

Answer 8

Next layer from the core.

Natural resources and rising agricultural production as development spreads out from the core.

Question 9

Outline the DOWNWARD TRANSITIONAL AREA in the Friedman diagram

Answer 9

Periphery that remains largely undeveloped.
Lags behind standard of living in other areas - fails to attract development and investment.

Question 10

Outline the RESOURCE FRONTIER in the Friedman’s model

Answer 10

Area with natural resources present.
Rush of investment to this area.
Social conditions in resource frontiers can be underdeveloped but have high economic growth.

Question 11

Give an example of a resource frontier at a global scale.

Answer 11

The Arctic.
Why? - It is hard to access (more than 80% of gas and oil reserves are offshore), has little infrastructure, environmental concerns.

Question 12

Give an example of a resource frontier at a national scale

Answer 12

In UK,
Core = South West England (London)
Resource Frontier = Scotland.

Question 13

Define resource peak

Answer 13

The amount of time of maximum rates of production of a resource.

Peak oil varies spatially.
Peak oil is shown on a Hubbert Curve.

Question 14

Who developed the concept of ‘peak oil’?

Answer 14

Developed by Shell geophysicist M.K. HUBBERT in 1956.

Question 15

When did Hubbert predict peak oil in America?

Answer 15

Predicted peak oil in USA would be around 1970.

However, further peaks in US oil have occured in the 1980s, 2008 and 2020.

Question 16

Why is Hubbert’s peak oil concept okay on a LOCAL scale but not on a global/national scale?

Answer 16

1) discovery of unconventional reserves.
2) Development of renewable/flow resources
3) Geopolitical issues halt progress in some areas
4) Motivation of nations to achieve more flow resources.

Question 17

What percentage of the world’s oil is held in Saudi Arabia?

Answer 17

25%
This is the most owned by 1 country.

Question 18

What does OPEC say about peak oil?

Answer 18

Production has been flat since 2005.

Question 19

What was the International Energy Agency’s world economic outlook report state about peak oil?

Answer 19

Report from IEA in 2009 predicted a peak in 2030.

However, until 2015, the NEEs were pushing demand up which may decrease predicted peak.