How Much Oil Do We Have Left? Really?

How much oil do we have left on our planet?  Is it really 11.8 Tbl?  And if we humans have only used just over 1 Tbl of our oil reserve legacy, doesn’t that mean it will take forever to use the rest?

Yes.  But.

It would appear there may be up to 6 Tbl of conventional oil buried under the surface of our planet (called oil in place). Most of the remaining deposits are in the Middle East, the southern hemisphere (examples include Brazil, and Nigeria), Venezuela, Libya, the Arctic and Siberia. Oil sands (tar sands) contain an estimated 1.8 Tbl of oil. Key areas of interest include Alaska, Alberta Canada, Venezuela, and the former Soviet Union. Up to 4 Tbl of oil in shale exists. Most of the exploitable oil will come from the former USSR and the United States.

But. These estimates are from geological survey data. Much of this oil will never be found (by drilling holes in the ground), or is in deposits that are too small or difficult to exploit.

* Over 40 percent of potential conventional oil production will be from reservoirs below the surface of the ocean, or from fields located in areas that experience severe weather conditions (think ice and snow for much of the year). Furthermore, the physics of oil production guarantees that even when we find a good conventional oil reservoir, we will never  recover 100 percent of the found oil (called the recovery factor). For example, we typically recover less than 40% of the oil that is actually located in a conventional oil reservoir (sometimes far less).(Note 1)

* Oil production from sands or shales is expensive and relatively inefficient. Economically viable resources are limited, require the consumption of other valuable resources to process the liberated oil, and will encounter serious environmental constraints.

The investment needed to find and produce all this oil may not happen in time to prevent shortages (and much higher prices). Capital costs for exploration and production, for example, have more than doubled since 2000. And there are potential cultural problems (including environmental, regional, and international conflicts) that could interfere with exploration and production. Taken together, these factors reduce our estimate of economically recoverable oil to 5.5 Tbl.  (Note 1)

But it gets worse. Most of the world's conventional oil supply is coming from older deposits. Many have already gone past peak production. OPEC (Organization of the Petroleum Exporting Countries) member nations control a substantial percentage of the world’s remaining accessible oil reserves. Exporting countries are in a position to control the price and availability of an increasingly scarce commodity. 

And this raises the all important issue of price. How much oil is in the ground is far less important than how much of it is accessible oil –

"Accessible reserves are those reserves of oil and natural gas that can actually be
found, produced, transported, refined, and distributed without material disruption
at a price the consumer can afford to pay."

In other words, we are dealing with the entire oil supply chain: from oil in the ground through production, refining, conversion into oil based products, and distribution to the consumer. And of all the products made from oil, the consumer will be most affected by the price that has to be paid for kerosene, propane, diesel, gasoline and heating oil fuels. (Note 2)

Now let’s distill all this information down into some kind of sanity. The following graphs review our planet’s oil reserves from two different perspectives. The first is a volume chart that shows how escalating production and refining costs will restrict the consumption of oil as an energy resource (oil used to manufacture gasoline, diesel, kerosene, jet, propane, and heating oil fuels).

We’ve already consumed just over 1 Tbl of mostly conventional oil. This is the low cost black gold that provided the energy for the second stage of the industrial revolution, enabled automotive and air transportation, gave many of us the fuels for clean central heat, provided the raw material for thousands of products, and helped to increase the production of food. The ratio of energy return to energy investment (EROEI) was initially very high (as much as 100 to 1).

We humans are now in the process of consuming another 1.2 Tbl of our planet’s oil reserve legacy. Exploration, production, refining and distribution costs are increasing, while the EROEI is decreasing to a ratio closer to 4 to 1. This is the remaining oil that I consider meets the definition of “accessible”. By the time we have burned our way through this oil legacy, we will be experiencing sporadic shortages. Fuel prices will be sufficiently high to cause increasing demand destruction. Low and middle income people will drive less. High fuel prices will begin to force lower income individuals out of the vehicle market, and many single family households will be desperately looking for an alternative to kerosene, propane and heating oil. (Note 3)

Because of demand destruction, it will take much longer to burn through the next 1.8 Tbl of oil. Oil production will be dominated by Middle Eastern nations, along with wells in deep water and hostile environments, and the exploitation of hydrocarbons trapped in oil sands and shales. With the exception of very rich people, corporations, and governments, oil will gradually become too costly to use as a fuel. Wars will be won by the forces that can deliver the most firepower for the least amount of consumed fuel.

Although we will probably pull another ~ 2.5 Tbl of oil from our dwindling resources, most of this will be used as a raw material for manufactured products, and bulk transportation (trucks, trains, buses, etc.).

The second graph presents this information as a timeline for oil consumption as a sequence of events. Note that the dreaded “Peak Oil” will occur during our current consumption of 1.2 Tbl of oil. The decline of oil based fuels overlaps the peak oil timeline and the reduction of oil as a raw material for manufactured products. It would appear we will have consumed our 1.2 Tbl of accessible oil by 2045. Demand destruction will be a recognized fact of life.

Given the close relationship of population growth to energy consumption, the decline of the oil era will have a dramatically negative impact on humanity. Think increased famine, inflation, and unemployment accompanied by declining GDP in almost every nation. Think cultural chaos and multiple rebellions. Think frustration and anger that spills over into regional and international conflict. No government on this planet is prepared for what happens next.

Environmentalists fret over our carbon footprint and global warming. Compared to the demise of oil as a fuel resource, that’s a tiny little problem.

But I could be wrong. Maybe we will find some huge untapped pool of oil in the Amazon, or technologists will figure out how to manufacture a miraculous form of alternative energy. We can always hope.

You decide.

TCE

Note 1: All of this information has been documented in my blogs and books. Browse at your leisure. And do your own homework. For you lazy people, here is the data I am using. Adjusted for optimistic fabrications and outright lies, there are:

Reserves that meet my definition of “accessible” reserves

   Proven conventional reserves                                   1.10 Tbl

   Reserve growth and undocumented reserves            .83  Tbl

   Recoverable unconventional oil reserves                   .62  Tbl

Total Accessible Reserves                                            2.55 Tbl

Additional Technically Recoverable oil                      2.95 Tbl

Total Oil In Place                                                          5.50 Tbl 

My projection for accessible recoverable unconventional reserves is probably low. Fracking and horizontal drilling technology has increased the available oil resources that meet my definition of "accessible". But increased resource exploitation only provides a temporary delay of the inevitable.            

Note 2: For more on the subject of price, see  “The Price Of Oil: How Much Will It Hurt?”

Note 3: For a discussion of EROEI see “12 Criteria For Evaluating Our Energy Options”