There is Plenty of Oil

It may not be environmentally correct to say so, but with oil prices at $75 per barrel, it is profitable to bring heavy oil into production. Doing this buys the world – at current rates of consumption – nearly another century of supply based on known reserves of heavy oil.

A study by the London based World Energy Council, entitled “The Future for Heavy Oil and Bitumen” includes a chart showing world reserves of conventional oil, as well as world reserves of heavy oil. Their assessment of conventional oil agrees with most other reports, i.e., the world once had about 1.8 trillion barrels of recoverable light crude oil, and about 800 billion of those barrels have already been consumed. At current rates of consumption – approximately 30 billion barrels per year – we’ve got about a 30 year supply of easily recovered crude oil. Add to that the World Energy Council’s estimate of recoverable heavy crude oil, however, and you add another 2.4 trillion barrels of oil to the total. This increases the world’s supply of oil to 110 years!

When people talk of “peak oil” they make several assumptions that should be challenged. First of all, the world appears to be able to afford oil at $75 per barrel, so we need to reset what level of production costs are considered uneconomical. While light crude can be extracted for $10 per barrel or less, with market prices as high – and sustainable – as they are today, heavy crude can be extracted at costs of $30 per barrel and still be profitable to sell.

When the President of Venezuela, Hugo Chavez, petitioned OPEC to recognize the heavy oil reserves in Venezuela’s Orinoco basin, he was simply acknowledging this reality. It’s interesting that news reports portray Chavez’s declarations as an “end to cheap oil,” because the opposite is true. Market forces have allowed us to produce oil economically from heavy crude oil. “Cheap” is relative.

Another interesting study on the availability of heavy crude oil, authored by Bill Kovarik at Radford University in Virginia, entitled “The Oil Reserve Fallacy,” estimates the global reserves of heavy crude at 3.0 trillion barrels. Moreover, this oil is everywhere, from tar sands in Canada to heavy oil in Venezuela, to oil shale in the USA, Brazil, India, and elsewhere.

It is a relatively safe assumption that 100 years from now, we will have perfected methods of generating energy that will not rely on oil – this challenges the notion that oil consumption will increase inexorably. Just as higher oil prices are making production of abundant heavy oil economically viable, they are also pushing develoment of alternative energy. Technology and market forces will always yield new ways to generate energy far faster than conventional sources of energy will be depleted.

Concern about the environmental effects of burning oil are an important, but completely separate issue. Environmental concerns shouldn’t motivate false and misleading statements about supplies of oil running out.

6 Responses to “There is Plenty of Oil”
  1. Harold Pierce, Jr. says:

    We will always require and use fuels from oil because these fuels have high energy density. For boats. planes, trains, buses, freight trucks, heavy construction, minning.and agricultural machines, Diesel-electrical generating systems, cars with guts and muscle, etc., there are no alternatives.

    Hydrogen has a low energy density which renders it unuseable for transportation. The hydrogen promoters never mention that the hydrogen storage tank will have to be removed from the vehicle and tested every five years for defects and mechanical integrety. This is such an inconvenice that no car owner would ever want to own such a vehicle.

    Alternate fuels such as ethanol and biodiesel cannot be produced in amounts required for transportation. For the crop year 2004/2005, 147 million metric tons of surgur was produced which upon fementation would yield about 650 million barrels of ethanol with an energy equivalent of about 500 million barrels of gasoline.

  2. Barry Brooks says:

    Maybe there is plently of oil, but
    should we burn it as fast as possible?

    Due to climate change we would be
    better off if we didn’t have more oil.

    Anyway, we don’t really need it except
    to fuel our folly.


  3. Ed Ring says:


    Over 50% of the total energy consumed each year worldwide comes from crude oil. Meanwhile the Chinese and Indian economies – both with over 1 billion citizens – are growing rapidly. Our point isn’t that oil is a great thing for the environment, only that we shouldn’t act like it’s going to run out, because it isn’t.

    The challenge we face is offering alternative clean sources of energy that can replace oil at a price everyone can afford.

    Ed Ring
    Editor – EcoWorld

  4. Mark O'Malley says:

    The World Energy Council is a membership organization dominated by energy-industry firms. In terms of its funding, oil companies almost certainly predominate. Therefore its claims need to be considered oil industry PR and critically examined. Its estimate of a 30-year supply of conventional oil at current rates of consumption is actually quite alarming, as a graph of supply tends to follow a bell-curve with steeply sloping sides. We have been consuming oil for about 100 years. Instead of a 30-year supply at current rates of consumption, we most likely in fact have a 60-100 year supply with sharply falling rates of consumption at a time when projected demand, especially in Asia, is expected to rise steeply.

    This will sharply increase prices for oil. Presumably, this would increase the economic feasibiility of extracting sources of “heavy oil” such as tar sands and oil shale. However, these sources require almost as much energy to extract as they yield, so the net energy gain from these sources would be minimal and would do little to address the energy shortages resulting from the sharp dropoff in conventional oil supplies. The larger of these unconventional sources is “oil shale,” most of which lies in the arid Colorado Plateau of the western United States. Extracting oil from oil shale requires vast quantities of water. However, there is no adequate water source within 1,000 miles of these deposits. Even if water were piped in from great distances, the runoff would devastate the environment and ruin the water supply of millions of people downstream. It would make much of the southwestern US uninhabitable. So the costs of extracting oil from oil shale would be high, both in economic and environmental terms, with economic costs probably much higher than the current price of heavy oil. It is doubtful that an economy in decline due to energy shortages and the aftermath of the current debt bubble could bear those costs.

    Even if it could, the net energy yield of these unconventional sources would be nowhere near sufficient to address the energy shortages that would result from the decline in conventional oil supplies. There are convincing arguments that not even a combination of sources (coal, nuclear, renewables, heavy oil) could begin to replace the abundance of cheap energy that conventional oil has provided for the past century.

  5. Wayne S. says:

    Oil from shale is extracted by heating it, not with water. Water and a deturgent are used to break the sand and oil apart in the Canadian tar sand prodution facilitys,
    Oil shale exists in vast, Vast quantiies in a huge geological area in the midwestern US.

  1. [...] can do that, and not just by pumping oil out of some tundra reserve in Alaska. There has been found plenty of oil in the American western states, to include shale oil. We use far less of our coastal waters in oil rigs, than say the United [...]

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