PART I. INTRODUCTION OF ESTIMATION OF RESERVES AND RESOURCES 1
Introduction 1
Chapter 1. User Costs and Optimal Depletion of Reserves 3
The Theory of Depletion of Limited Resources 3
Implications of the Theory of Exhaustion 7
Reformulation of the Theory of Exhaustible Resources 7
The Underlying Concept of Reserves 10
The Rate of Interest and the Optimal Depletion Rate 10
Chapter 2. Reserves versus Resources 13
The Resource Base 13
Reserves 15
Chapter 3. Economic Issues for the Mining Industry 17
Price and Marginal Cost 17
Supply Curves 18
Exploration Models 22
Summary 25
PART II. OIL AND GAS: ESTIMATION OF DISCOVERED RESERVES 27
Introduction 27
Chapter 4. Proved Reserves: the API-AGA-CPA System 29
Engineering and Economic Concept of Proved Reserves 33
Lessons of the 1971 Natural Gas "Audit" 34
Chapter 5. Canada's "Nonconventional Reserves" 37
Chapter 6. The Growth of Proved Reserves in the United States 41
Types of Wells 41
Reported "Discoveries" 45
Sources of New Reserves in Old Fields 46
New Oil or Gas: After Discovery 46
Chapter 7. The Relation of Probable Reserves to Proved Reserves 49
Probable Reserves as a Stretch Factor on Proved Reserves 53
Chapter 8. The Role of Costs and Prices in Ascertaining Proved and Probable Reserves 61
Variable Costs 61
Lack of Growth of Reserves 63
Effects of Price Controls and Per-Barrel Taxes 64
Chapter 9. Proved and Probable Reserves outside the United States and Canada 69
Review of Selected Reserve Estimates 72
Summary 81
PART III. OIL AND GAS: ESTIMATION OF UNDISCOVERED RESOURCES 83
Introduction 83
What Is a Forecast of Undiscovered Petroleum? 86
Models for Projecting Amounts of Discoverable Hydrocarbons 90
Chapter 10. Life-Cycle Models of Petroleum Production 95
Chapter 11. Geologic-Volumetric Methods 113
Chapter 12. Rate-of-Effort Models 127
Bromberg and Hartigan Model 132
Chapter 13. Subjective Probability Methods 147
Circular 725 148
Canadian Resource Appraisal 164
Chapter 14. Econometric Methods 175
Khazzoom's FPC Model of Gas Supply 180
Erickson-Spann Model 183
MacAvoy-Pindyck Model 184
Forecasting Performance of the MacAvoy-Pindyck Model (Version 2) 190
A Comparison of Models 191
Version 4 of the MacAvoy-Pindyck Model 195
Attanasi's Individual Basin Econometric Model 202
Parameter Estimation and Comparison of Models 205
Chapter 15. Discovery Process Models 213
Deposit Attributes, Size, and Measurement Error 219
Deposit Size Distributions 223
Arps and Roberts and Drew, Scheunemeyer, and Root's Models 233
Ryan's Model 236
Barouch and Kaufman's Model 248
Oil Supply Forecasting Using Disaggregated Discovery Process Models 270
Chapter 16. Industry Approaches to Forecasting Future Discoveries 289
Summary 293
PART IV. COAL: AN ECONOMIC INTERPRETATION OF RESERVE ESTIMATES 295
Introduction 295
Chapter 17. The Resource Classification System 297
Certainty Categories 297
Physical Dimensions 298
Reserve Base 298
Chapter 18. An Economic Interpretation of Reserves 301
The Economic Concepts 301
The Demonstrated Reserve Base 302
Is the Reserve Base Coal Available at Current Cost? 310
Strippable Reserve Base 313
Chapter 19. What We Need to Know 321
Inferred Reserves 323
Technological Change 324
Chapter 20. Recoverability 327
Recoverability of Deep Reserves 327
Recoverability of Strip Reserves 329
Summary 331
PART V. URANIUM: ESTIMATES OF U.S. RESERVES AND RESOURCES 333
Introduction 333
Uranium Geology 334
Chapter 21. Grand Junction Office Methodology 337
Historical Perspective 337
Ore Reserve Estimation 338
Potential Resource Estimation 341
Forward Cost Method 346
Production Capability Analysis 348
Chapter 22. Interpretation of GJO Estimates 353
Chapter 23. Trend Projection Models 361
Lieberman's Life-Cycle and Discovery Rate Models 364
Econometric Model by Perl 366
Chapter 24. Crustal Abundance Models 371
Chapter 25. Subjective Probability Appraisal 381
A Case Study of Subjective Probability 382
PART VI. COMPARISONS, RECOMMENDATIONS, AND CONCLUSIONS 385
Chapter 26. Resources and Reserves 387
A Contrast in Terminology 387
Future Cost Increases 388
Coal 389
Oil 390
Undiscovered Oil and Gas 391
Uranium 391
The Need for Further Research 393
Appendix 395
A. The Rate of Interest and the Optimal Depletion Rate 397
B. Decline Rates and Depletion Rates 403
C. The Soviet Reserve Classification System 407
D. The Resources and Reserves of Strippable Coal 409
Bibliography 413
Index 429
About the Authors 435