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 world’s 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 date.

We 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 sources—which are not taken into account when calculating proven reserves—the world has at least a century’s worth of recoverable oil resources. The British-based consultancy HIS Energy suggests that the planet’s 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. ExxonMobil’s 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 today’s 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 world’s endowment of oil and gas resources remains to be used.”[7]

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 “Hubbert’s Peak” theory, we have passed the halfway point in terms of the world’s recoverable oil production. A number of present-day oil-industry observers have taken up Hubbert’s 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 today’s 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.[8]
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 America’s “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) until 2004.
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.





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Press Release


Clarice Smith
Deputy Director,
Manhattan Institute
(212) 599-7000



Copyright The Manhattan Institute 2007