RUNNING OUT OF OIL? HISTORY, TECHNOLOGY AND ABUNDANCE
April 18, 2006
Plenty of oil exists for years to come, says Max Schulz of the Manhattan Institute. Since the first discoveries of oil in the United States in 1859, people said we were running out. However, today's drills dig miles into the earth, travel laterally as well, drill through very deep water and technology boosts the recovery rate of fields assumed depleted. Therefore, questions about energy supply must not be thought of in terms of how much is available, but in terms of how good mankind is at finding and extracting it.
According to Schulz, oil recovery techniques greatly increase recoverable oil:
- The Department of Energy (DOE) predicted that carbon sequestration technologies that inject carbon dioxide into oil reservoirs could soon add perhaps 89 billion barrels and eventually add 430 billion new barrels to the 21.4 billion barrels of proven reserves in the United States.
- New discoveries and increasing production will increase Saudi Arabia's reserves from their current 261 billion barrels to 461 billion barrels.
Schulz says unconventional sources of oil, like Canada's tar sands or shale oil in Colorado increase reserves as well:
- These offer the promise of many hundreds of billions of additional barrels of oil, although extraction processes for shale and tar sand oil generally cost more than conventional oil drilling.
- If crude oil were trading at $20 per barrel, investment in such extraction costs too much. With the global price of crude trading above $60, however, they are attractive economically.
Source: Max Schulz, "Running out of Oil? History, Technology and Abundance," Technology Commerce Society Daily, March 13, 2006.
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