Comparable energy reserves and resources – why we should care
Because the energy industry is global, it needs global standards. These should be clear and they should be consistently communicated. If you harmonize the terminology of energy reserves and resources, you get a more reliable and consistent estimate of global quantities of fossil energy. This also helps improve transparency and raise the comparability of assessments of asset or company values. And, of course, better data leads to more informed investment decisions.
However, to ensure the classification method meets the needs of all users, you need to have consistency both in application and in standard-setting. And the users are many. They include experts responsible for preparing global energy and mineral studies for use by decision-makers for long-term energy planning; Government specialists dealing with national resource management; internal company experts in charge of project and portfolio management; and the financial reporting sector, including analysts, bankers, accountants, the securities exchanges and those involved with securities disclosure and regulation.
The UN Framework Classification for Fossil Energy and Mineral Reserves and Resources 2009 (UNFC) is designed to be internationally applicable across multiple commodities. It’s a flexible and generic system that you can apply at global, national, industrial or institutional level. Based on a numerical classification code that’s simple and intuitive to use, it provides a global communications tool that transcends language, commodity type and extraction methodology.
The increasing overlap between methods for extracting minerals and petroleum, such as the extraction of bitumen by mining and other non-conventional petroleum operations, also makes a common generic system essential. Trying to apply a system designed expressly for fluids to the classification of resources extracted as solids, and vice versa, underlines the need for the UNFC.
The efficiencies to be gained through using the UNFC are such that we all should care because we will all benefit!
Read more about what UNECE does