Have ever been confused as to whether the world is going to run out of oil any time soon?
Well, not surprisingly the answer is rather complex. I have been doing some digging and below are the main facts.
1. How much oil the world are currently using?
About 85 million barrels a day – give or take a few million barrels.
2. How much proven reserve are there currently?
The best figure I could come up with is about 1,400 billion barrels. This figure as dislosed by the oil producing countries are notoriously inaccurate but it should give us a feel for the magnitude of the amount.
3. Based on the above data, how long will we have before the world run out of oil?
Around 45 years based on current rate of consumption.
However, as data from the past few decades shows, the growth trend on world energy consumption is showing no sign of slowing down. Realistically we are talking about 30+ years. Maybe less.
4. Are we really running out of oil? What about the unproven reserves?
This is where it gets interesting.
First of all, we should understand that the low hanging fruits has been picked. The entire surface of the earth have been more or less surveyed at the base level. If certain resources have not been classified as proven reserve, it is most probably because they are too difficult or too expensive to extract using the current technology and under the current regulations.
We certainly are going to add to those proven reserves in the coming years but it is equally certain that these new reserves would be more difficult and more expensive to extract.
They may be at geographically remote locations such as deeper in the ocean, closer to the arctic or deeper underground. They may also require an increasingly more expensive method of extraction. The extraction process may use lot more energy thus actually reducing the actual amount of usable oil.
The second issue that most oil companies and governments are most reluctant to talk about is that the environmental costs of the new extraction processes would probably be higher. Even some current production methods such as deep water drilling and oil from tar sands are already on the borderline society’s acceptability as to their environmental consequences.
The more expensive and invasive extraction method of the future will almost invariably result in even more severe environmental consequences.
5. So, what should we do?
- We must expect the price of oil to continue to rise. This is due to the fact new reserve will certainly be more expensive to extract.
- We must add the cost of environmental damage to the cost of extraction. Through taxes and regulations, oil companies must be required to make good on any environmental and social damage that happened during the extraction process. If the oil companies do not pay for it, we are basically just shifting the burden to the society at large.
I think it is quite clear that the price of oil will continue to rise in the foreseeable future but that is something that we should embrace. The questions should not be whether it is possible for us to drill even deeper into earth without any regard to the environment in order to get more oil but whether we would want to.
A much better option would be to adopt a more energy efficient lifestyle as well as developing the ability to get more of our energy from environmentally friendly and renewable resources.