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Cases / Oil, gas and coal operations · United States · 2008–2021

US SEC switches oil reserve pricing to a 12-month average in 2008

Short record: the main facts, with sources. A full case file has not been prepared.

Nature's voice · report
No measurement of the harm done to me here is on record.
Did nature suffer? Not measured.
Not on record
  • The record does not name which of my species, waters, soils or forests were harmed.
What the record lacks: 2 none on record · 3 insufficient · 1 not measured See the gaps

In December 2008 the US Securities and Exchange Commission changed how oil and gas companies report proved reserves, using a 12-month average price instead of the year-end price. Companies present reserves to investors as a measure of their future, and the sources show reported reserves moving with the price used.

What?
On 31 December 2008 the US Securities and Exchange Commission changed the price used to report proved oil and gas reserves, from the year-end price to a 12-month average. Deloitte
Where?
United States (the rule and Chesapeake) and Alberta, Canada (Imperial Oil). Imperial Oil
When?
Rule effective from fiscal 2009; the reserve examples are from 2014 to 2016 and 2020 to 2021. Deloitte
Who?
Gained
None on record
Lost
None on record
Harmed
None on record
Why?
Not stated in the sources reviewed.
How?
Reserves are restated each year at the 12-month average of first-day prices, so reported reserves rise and fall with that average. Deloitte
5 of 6 questions answered from the record · open: who

What happened

The record, in order.

The SEC's Release 33-8995, dated 31 December 2008, replaced the year-end one-day price with the average of first-day prices over the previous 12 months, effective from fiscal 2009, according to Deloitte's guide.

Reserve data cited in the sources show the SEC average price at end-2014 was $94.42 a barrel, against a WTI close of $53.27 on 31 December 2014.

The same data show Chesapeake's proved reserves fell from 2.469 billion to 1.504 billion barrels of oil equivalent in 2015, a price-driven drop of 1.098 billion, before rising 14% in 2016.

Imperial Oil's 0.6 billion barrels of Cold Lake bitumen left its proved reserves in 2020 and returned in 2021, according to its 2021 10-K filing.

    In court and with insurers

    Every proceeding and every insurer decision on record.

    Lawsuits and rulings

    No court case on record. No court has ruled on this case.

    Insurers

    No insurer decision on record.

    What we don't know

    Undisclosed, unproven, untried: recorded as data.

    Nature

    • Not measured Harm to nature: The record holds no measurement of harm to nature.

    Record

    • Insufficient Reported but not verified: ConocoPhillips removed 1.75 billion barrels of oil equivalent from its reserves in 2016, about 70% of it Canadian oil sands, and said its development plans would not be significantly affected.
    • Insufficient Reported but not verified: ExxonMobil's proved reserves fell from 22.4 to 15.2 billion barrels in 2020, and 9 trillion cubic feet of US gas from its XTO acquisition fell out before being counted as proved again in 2021.
    • Insufficient Reported but not verified: Kearl oil sands in Canada moved in and out of ExxonMobil's proved reserves four times between 2016 and 2021; no source entry is given.
    • None on record Not stated: who gained from the rule change, or whether companies changed how they reported reserves.
    • None on record Not stated: whether the rule changed production or investment plans.

    Did the harm stop?

    Not stated in the sources reviewed.

    Who paid?

    Not stated in the sources reviewed.

    Sources

    Voices on record: ✓ Company or project— Government and regulators— Courts— Press and investigations— Communities and civil society— Researchers

    Company or project

    Connected cases

    Related matters, and cases linked to this one through the same organisations, with the role each played in both.
    Terms used on this page

    Institutions

    SEC
    The US Securities and Exchange Commission, which regulates securities markets and what companies tell investors.
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