How Much Oil Is There?

It seems that the more oil the world consumes, the more reserves the world finds.

By SHARE

Gregg Laskoski is a senior petroleum analyst for Gasbuddy.com.

Considering how much clamor is generated about the prices of oil and gasoline, how much is needed to survive, and what diverse societies are willing to pay to keep turning the wheels of commerce and industry worldwide, it's a bit peculiar that the global economy depends heavily on a finite resource whose supply, we're told, replenishes perhaps faster than it diminishes.    

Those of us who are old enough to remember the first observation of "Earth Day" (April 22, 1970) probably remember the chorus of pundits who warned us that at current rates oil demand would soon deplete the world's available supply, and Americans had better get used to pedaling bicycles. The crisis facing every oil-driven economy was fast approaching and the sea change it would bring was a virtual guarantee.

And yet, more than 40 years later, during which global consumption has outpaced ominous forecasts, we have a finite asset that has defied logic. The world's reserves continue to increase. With oil we have the only natural resource where the more it is consumed, the more we have. It's 2011 and the sky has yet to fall. Instead, we've seen that over time new sources were discovered and new technology developed that makes oil accessible from depths that were either unknown or considered inaccessible.

So how much oil is there? That depends on whom you ask. [See the 10 priciest years in history for gas.]

OPEC, which controls about 81 percent of the world's reserves, now reports that Venezuela possesses the greatest inventory of "proven oil reserves" with 296.5 billion barrels or 24.8 percent of the world's oil.  (OPEC's chart)

But just five months earlier, OPEC's ranking of  world oil reserves had Venezuela ranked sixth worldwide with 99.4 billion barrels. Between February and July, Venezuela apparently found 97.1 billion barrels of oil in a couple of wood sheds.    

In July OPEC said Venezuela's proven oil reserves spiked 40 percent from 2009 levels to reach 297 billion barrels. Saudi Arabia, the long-time leader in the category, had 265 billion barrels of proven reserves, according to the online report, which will be published in November. [Read the U.S. News debate: Should offshore drilling be expanded?]

As diplomatically as possible, the Miami Herald on July 20  suggested that Venezuela's figures require some explaining.  It reported the following:

About one-third of Venezuela's reserves are extra heavy crude, which is difficult to extract and only economically feasible to recover when the long-term price of oil is above about $70 a barrel, said Jorge Piñon, a research fellow at Florida International University and the former President of Amoco Latin America…"You can be sitting on the largest reserves in the world but if you do not have capital and technology to recover them…they are worthless," he said.

Venezuela isn't alone in persuading OPEC to fudge the numbers. In October 2010, Iraq dramatically raised its own estimates of  total "proven" reserves more than 24 percent to 143.1 billion barrels of oil, up from 115 billion barrels, according to Oil Minister Hussein al-Shahristani.  Of course, energy experts voiced skepticism that Iraq had done enough recent exploration to justify the new estimate, and they expressed the proper  indignation that the figure was never independently confirmed.  But those are the numbers. [See a slide show of the 10 cities with the most Earth-friendly commuters.] 

How much oil is there? How confident are you that anybody knows the real answer? All we can reasonably guess is that by next year there will be more of it.

  • See a collection of political cartoons on gas prices.
  • See a slide show of a reality check on U.S. energy sources.
  • See the 10 priciest years in history for gas.