U.S. and Them: The United States and
World Oil Reserves
Published geological and political estimates of undiscovered oil resources
have no set time limits stated or implied for the postulated discoveries.
Such open-ended estimates effectively imply that the volume of resources
yet to be discovered will lie somewhere between zero and infinity and
will be found sometime between now and eternity.
L. F. Ivanhoe, World Oil
Published estimates of ultimately recoverable world oil vary widely, from about 1,800 billion barrels to 4,820 billion barrels. Deciding which of the estimates are more nearly correct is critically important for accomplishing future energy transitions. Overly optimistic estimates have risen steadily since the 1980s on the basis of smoke-and-mirror accounting techniques, fooling the U.S. Energy Information Administration and others into concluding that oil production will continue rising indefinitely (see chapter 12). But in 2004, production levels at many of the world’s principal oil fields showed advancing depletion, illustrating some basic facts: Oil is a nonrenewable resource, and world oil production is at or close to its peak. We soon will discover that the finite amounts of petroleum still in the ground cannot feed our demand for oil.1
Private and government petroleum experts formulate predictions of future global oil and gas discovery and production by estimating the world’s total original oil endowment. The calculation requires adding together three factors: (1) cumulative production to date; (2) estimated “reserves” (remaining recoverable oil) in known producing and as-yet-undeveloped fields; and (3) more or less educated guesses of how many oil fields remain to be discovered.2 The cumulative past production ought to be a simple matter of reading pipeline gauges, but the veracity of reports varies, and believable numbers are hard to come by.3 A number of sources conclude that the world had produced about 800 billion barrels of oil by the mid1990s. Although the U.S. Geological Survey (USGS) published substantially lower figures in 2000, the Energy Information Administration estimated that annual global oil production reached about 27 billion barrels in 2005, and in August 2006 the Association for the Study of Peak Oil estimated that oil-producing countries have extracted a total of about 970 billion barrels since the beginning of the world’s brief “Petroleum Interval” (see chapter 12).4