MYTH 4: WE ARE RUNNING OUT OF OIL
Common sense tells us that there is a fixed amount of oil in the earth and
that each day we are getting closer to using it up. The same goes for other
nonrenewable energy sources, such as coal and natural gas.
Are we right to worry? Not anytime soon. Paradoxically, even as we have been
pumping more oil out of the ground, we have seen estimates of the worlds
proven reserves (the amount of identified oil deposits that can be economically
recovered using current technology) grow. In 1944, for instance, experts thought
that the world had 51 billion barrels of crude oil left. Yet over the next six
decades, we would pump more than 18 times that amount (917 billion barrels).
Today, proven reserves have grown to more than 1.2 trillion barrels, a figure
higher than the 1 trillion barrels that humanity has produced and consumed to
have not created more oil. Rather, enterprising individuals have
improved our technologies for detecting and extracting it. Twenty years ago,
for instance, it was impossible to reach much of the oil under the deep waters
of the North Sea. Now it costs less than $15 per barrel to extract it.
Taking into account new extraction technologies and discoveries of unconventional
petroleum sourceswhich are not taken into account when calculating proven
reservesthe world has at least a centurys worth of recoverable oil
resources. The British-based consultancy HIS Energy suggests that the planets
recoverable reserves might be as much as 2.4 trillion barrels. ExxonMobil has
estimated global conventional oil resources at 3.2 trillion barrels.
Unconventional sources, such as oil shale deposits in the western United States
and the oil sands in Canada and Venezuela, will yield even more recoverable
resources. ExxonMobils recent estimates suggest that there are 800,000
billion barrels of recoverable oil from these sources. Petro-Canada is more
optimistic, estimating that Canada by itself has more than 2.5 trillion
barrels [in unconventional oil resources]. These deposits rival those of the
Middle East and could satisfy todays global demand for the next 100 years.
These estimates may be conservative. As Reason magazine science correspondent
Ronald Bailey notes, the U.S. Geological Survey figures that the total
world endowment of conventional oil resources is equivalent to about 5.9 trillion
barrels of oil. Proven reserves of oil, gas, and natural gas liquids
are equivalent to 2 trillion barrels of oil. The USGS calculates that humanity
has already consumed about 1 trillion barrels of oil equivalent, which means
82 percent of the worlds endowment of oil and gas resources remains to
It is important to note, too, that experts have repeatedly provided dire warnings
about our running out of oil. The preeminent proponent of this school of thought
was geologist Marion King Hubbert, who predicted in the 1950s that world oil
production would peak around the year 2000. In other words, according to the
Hubberts Peak theory, we have passed the halfway point in
terms of the worlds recoverable oil production. A number of present-day
oil-industry observers have taken up Hubberts idea and believe that we
are heading toward global economic catastrophe. If the world has used up about
half its oil in about a century, goes the argument, what does that imply for
the twenty-first century, given the increased demand for oil in China, India,
and the developing world?
The good news about this bad news is that, historically, the doomsayers have
been wrong. If the past is prologue to our future, technology and human ingenuity
will likely prove todays doomsayers wrong as well (see box).
1874 State geologist of Pennsylvania said that the U.S.
had only enough oil to last four years.
1885 U.S. Geological Survey said that California had little
or no chance of finding oil. California would go on to become
one of the United States largest domestic oil suppliers. The
Golden State has produced more than 7.5 billion barrels of oil in
the last quarter-century alone.
1914 The U.S. Bureau of Mines claimed that the country had
only a ten-year supply of oil.
1916 The U.S. Bureau of Mines warned about a crisis
of the first magnitude.
1940 The U.S. Bureau of Mines predicted that the U.S. would
exhaust its domestic oil reserves by 1954.
1969 According to estimates, the state of Oklahoma had 125
million barrels of oil left in the ground. Over the next quarter-century,
Oklahoma would produce 4.5 billion barrels of crude oil.
1972 The Club of Rome estimated that only 550 billion barrels
of oil remained in the earth. In just the last two decades, however,
the world has used 600 billion.
1980 Energy Secretary James Schlesinger announced that Americas
energy future is bleak and likely to grow bleaker. Schlesinger
warned about chronic stringency in the decades ahead.
By the mid-1980s, a worldwide glut of oil drove prices down from
a high of over $60 per barrel to under $20 per barrel (2004 dollars).
Prices remained under $30 per barrel (dropping to as little as $12)
1997 British oil analyst Colin Campbell predicted peak world
production was just around the corner and claimed that the world
was on the brink of war, starvation, and possible extinction.