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How much petroleum is there, and how long will it last?

These are straightforward questions, so one might expect them to have straightforward answers. Don't petroleum geologists and oil corporations know how much oil is in the ground, how much they can sell in a year, and therefore how long oil will last? Wouldn't this be a basic part of an oil company's business plan?

Unfortunately, it's not that simple. As economists and petroleum geologists will tell you, there is always more in the ground than you can get out, and the percentage you get out depends on how hard you want to work, or how much you are willing to pay, to get it. When oil was very, very cheap, around the first decades of the 20th century, it wasn't worth much to develop new technologies to get every last drop when the initial gusher and subsequent flow eased and the oil no longer flowed freely out of the ground. Today, we have many ways to push more of the underground oil to the surface or separate it from the rocks that hold it. So the answer to how much oil is in the ground is: It depends on what you are willing to pay.

As to the second question—how long will Earth's petroleum last?—economists will tell you that rather than being drained to the last drop, petroleum will eventually become so rare and so expensive to get out of the ground that it will no longer be useful as fuel. People may collect it, the way they collect other precious minerals, and display little jars of the black goo on their coffee tables as decorations and as evidence of their wealth. The real question therefore is not when every drop of oil will be gone but when it will no longer be economically worthwhile to extract it.

What will raise the price of oil and thereby make it worthwhile to try harder and harder to get it? One standard answer is that the price of oil will rise rapidly when peak production is reached—that is, when discovery of new oil declines. Another economic turning point is when the rate of supply drops significantly below the demand.

As petroleum reserves shrink, they get harder and harder to find

We're using more and more petroleum and finding less and less of it. Indeed, petroleum geologists suggest that we're going to run out of petroleum in the next few decades. History seems to be on the side of this viewpoint. In 1940, five times as much oil was discovered as consumed. Forty years later, in 1980, the amount of petroleum discovered just about equaled the amount consumed. And by the turn of the 21st century, world consumption of petroleum was three times the amount that was discovered.9 Based on this history and our knowledge of the kinds of rocks where petroleum can be found, it seems likely that oil production in the United States will end in 50 years or at least by the end of this century, and world oil production soon after.

To understand how petroleum geologists think about these things and make calculations, you first need to understand the terms resources and reserves. A petroleum resource is the oil that can be extracted economically. A reserve is part of the resource, the part that, at the time it is evaluated, is judged to be eventually extractable both legally and economically. Proven reserves are those that have been determined to be legally and economically extractable right now. (The proven reserves idea leaves open the possibility that as prices for petroleum rise, it may become economically worthwhile to extract oil from reserves that are now considered too costly to use.)

Today, petroleum geologists estimate that the world's proven reserves are 1 trillion barrels (42 trillion gallons), and that total reserves—oil that eventually will be legally and economically accessible—are probably 2–3 trillion barrels. These estimates are based on a lot of geological knowledge as well as the location and size of existing oil wells. In fact, there is a wide range in the estimates of how many barrels of oil are now or soon will be considered proven reserves. For example, the U.S. Energy Information Administration reports values from 1–4 trillion barrels.10

In predicting when the oil supply will become a serious problem, petroleum geologists focus on the peak oil point—the time when one-half of Earth's oil has been exploited. This is usually projected to occur sometime between 2020 and 2050, although a variety of experts believe it has occurred already in the United States. The time of peak oil production is important because we can assume that when that point is reached, the price of oil will rise rapidly. The Energy Information Administration presents a range of estimates for the time of world peak oil production, from as early as 2020 to as far into the future as 2121.11

The implications are huge about how much time this gives the nations of the world to prepare for a planet without petroleum. Given the way most people and societies go about planning for events that they hope won't occur until far in the future, it seems likely that if peak oil production is expected to occur a century or more from now, little will be done to move away from fossil fuels in the next year or even the next decade, and when the time comes we'll all just muddle through. This will be unfortunate, because moving away from petroleum (and the other fossil fuels) is a good idea for reasons other than direct energy supply. For example, we could stop worrying about international conflicts over oil, avoid direct pollution from toxins given off by petroleum, and reduce the release of greenhouse gases. Those who place a high priority on a healthful, pleasant, and sustainable environment would therefore prefer to be told that peak oil is almost upon us, so that nations will be spurred to action.

For a more straightforward estimate of when the world will run out of petroleum, here are some numbers. Worldwide, people use about 30 billion barrels of oil a year (210 gallons a year per person). Conservatively—not taking into account the maximum potential increase in automobiles in China and India—worldwide consumption is expected to rise to about 50 billion barrels a year by 2020, which means that the whole world will use up today's proven petroleum reserves in about 20–40 years and use up the total estimated reserves in about 60 years. Since not all our many uses of petroleum may be readily adaptable to other fuels, this puts a lot of time pressure on all nations to get something going quickly to replace petroleum, especially for transportation.

However, there is another point of view, which is that conventional petroleum geologists greatly underestimate both the available amount of petroleum and how efficiently oil can be gotten out of wells. This viewpoint was well expressed in the Wall Street Journal op-ed piece titled "The World Has Plenty of Oil," by Nansen G. Saleri, president and CEO of Quantum Reservoir Impact, in Houston, and former head of reservoir management for Saudi Aramco.12

Mr. Saleri says that present oil mining technology gets only one-third of the oil out of a well; the rest clings to the rocks and is just held too tightly for current pumping methods to get it out. "Modern science and unfolding technologies will, in all likelihood, double recovery efficiencies," he writes. "Even a 10% gain in extraction efficiency on a global scale will unlock 1.2–1.6 trillion barrels of extra resources—an additional 50-year supply at current consumption rates."13

Mr. Saleri argues that rising prices for petroleum will fuel technological development that will increase extraction efficiency. Two major oil fields in Saudi Arabia are already yielding two-thirds, rather than one-third, of the oil out of the wells. Mr. Saleri writes that the total resources are 12–16 trillion barrels, not the 1 to 3 trillion barrels of conventional estimates, and that 6–8 trillion of these total resources are in conventional wells, the rest in "unconventional" sources, shale oil and tar sands, from which it is difficult and environmentally costly to get oil. Present attempts to recover oil from these unconventional sources are disrupting and polluting land (more about that later). Even with his optimistic assumptions, he estimates that peak oil production will be reached between 2045 and 2067—in 38–59 years.

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