Are We Running Out of Oil?

Policy Backgrounders | Energy and Natural Resources

No. 159
Wednesday, January 29, 2003
by David Deming

How Much Oil is Left?

Figure III - World Oil Supply

Scaremongers are fond of reminding us that the total amount of oil in the Earth is finite and cannot be replaced during the span of human life. This is true; yet estimates of the world's total oil endowment have grown faster than humanity can pump petroleum out of the ground.16

The Growing Endowment of Oil.

Estimates of the total amount of oil resources in the world grew throughout the 20th century [see Figure III].

  • In May 1920, the U.S. Geological Survey announced that the world's total endowment of oil amounted to 60 billion barrels.17
  • In 1950, geologists estimated the world's total oil endowment at around 600 billion barrels.
  • From 1970 through 1990, their estimates increased to between 1,500 and 2,000 billion barrels.
  • In 1994, the U.S. Geological Survey raised the estimate to 2,400 billion barrels, and their most recent estimate (2000) was of a 3,000-billion-barrel endowment.

By the year 2000, a total of 900 billion barrels of oil had been produced.18 Total world oil production in 2000 was 25 billion barrels.19 If world oil consumption continues to increase at an average rate of 1.4 percent a year, and no further resources are discovered, the world's oil supply will not be exhausted until the year 2056.

Additional Petroleum Resources.

"Oil shales may hold another 14,000 billion barrels -- a 500 year supply."The estimates above do not include unconventional oil resources. Conventional oil refers to oil that is pumped out of the ground with minimal processing; unconventional oil resources consist largely of tar sands and oil shales that require processing to extract liquid petroleum. Unconventional oil resources are very large. In the future, new technologies that allow extraction of these unconventional resources likely will increase the world's reserves.

  • Oil production from tar sands in Canada and South America would add about 600 billion barrels to the world's supply.20
  • Rocks found in the three western states of Colorado, Utah and Wyoming alone contain 1,500 billion barrels of oil.21
  • Worldwide, the oil-shale resource base could easily be as large as 14,000 billion barrels - more than 500 years of oil supply at year 2000 production rates.22

Unconventional oil resources are more expensive to extract and produce, but we can expect production costs to drop with time as improved technologies increase efficiency.

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