For a century, there\u2019s been a key metric for judging the direction of the oil industry: The number of years it would take for wells to run dry. The reserves-to-production ratio (R\/P)\u2014calculated as oil reserves, divided by annual production\u2014has remained at eerily consistent levels since John D. Rockefeller\u2019s day. At major oil companies, and in the US as a whole, it has rarely dropped below 10, and those moments have been associated with major disruptions.<\/p>\n
Perfect 10: When America\u2019s R\/P slipped below the critical level in the late 1960s, it came amid fears that the country might be approaching \u2018peak oil\u2019, heralding the heady geopolitics of the 1970s oil crises. When Royal Dutch Shell\u2019s R\/P fell below 10 in 2004 due to a reserves write-down, the event was a major scandal, prompting the departure of a string of top executives and the payment of nearly half a billion dollars to aggrieved shareholders.<\/p>\n
Now, Big Oil is running down its tank again. That\u2019s an indication that when executives say oil demand may have peaked and the world is transitioning fast to renewables, it\u2019s more than just words. <\/p>\n","protected":false},"excerpt":{"rendered":"
For a century, there\u2019s been a key metric for judging the direction of the oil industry: The number of years it would take for wells to run dry. The reserves-to-production ratio (R\/P)\u2014calculated as oil reserves, divided by annual production\u2014has remained at eerily consistent levels since John D. Rockefeller\u2019s day. At major oil companies, and in the US as a whole, it has rarely dropped below 10, and those moments have been associated with major disruptions. Perfect 10: When America\u2019s R\/P slipped below the critical level in the late 1960s, it came amid fears that the country might be approaching \u2018peak […]<\/p>\n","protected":false},"author":44,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[139,130,187],"tags":[],"class_list":["post-402981","post","type-post","status-publish","format-standard","hentry","category-live-mint","category-newspapers","category-oil-gas-live-mint"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/402981","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=402981"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/402981\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=402981"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=402981"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=402981"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}