How much oil does the world have left?
How much oil do we have left? According to the United States Geological Survey's (USGS) latest report, published in
2000, the planet had 3 tn barrels of oil and gas before we started using it up. It calculates we have used some 700
bn, leaving 2.3 tn barrels underground.
A simple calculation using data from the Centre for Global Energy Studies (CGES) shows that with 28.8 bn barrels currently being used a year (79 mm a day), there is some 80 years of supply left in the ground. However, the 2.3 bn barrels left includes 1.4 bn which, according to USGS analysis of global geology, exist but have yet to be discovered.
That leaves roughly 890 bn barrels of oil and gas that have been discovered and are booked as proven reserves --
roughly 31 years' supply. This estimate is lower than the industry's. BP's oil statistics -- the industry bible --
indicate some 1,047 bn barrels of proved reserves -- 36 years supply on current usage.
But analysts don't worry about this too much. Derek Butter of consultancy Wood Mackenzie says: "It is not something we get hung up about. We think in the medium term there is enough oil in reserve."
The BP statistics show that over the past decade, reserves have been roughly constant -- in 1992 there were 1,006 bn
barrels -- indicating that through the 1990s the industry has been effective at finding reserves to replace the
resources we use. It has done well -- in 1982, the figure was only 676 bn.
Manouchehr Takin of the CGES says: "Forty years ago, economists and geologists said there were 40 years of oil and gas left. Now they are saying the same."
He adds: "The techniques for finding oil and extracting it are advancing rapidly. It shows that at any one time what is left, and the time it will take to use this up is only a snapshot dictated by the current state of knowledge. And, of course, there is the impact of economic development, and the efficiency with which we use energy."
Efficient energy use, he argues, has offset the growth of formerly non-industrialised countries, such as India and
China, which have anyway not grown as rapidly as was expected in the Sixties and Seventies. Similar dynamics are
likely to continue.
Nevertheless, demand for oil is likely to increase, as, over time, is the price. Former UK Environment Minister Michael Meacher pointed to a crunch by 2015, when he says demand is likely to total some 60 mm bpd more than the current 79 mm, while supplies will only be some 90 mm.
CGES argues that Meacher has overstated the increase in demand. It argues that taking reserves into account, his
estimates imply 4 % growth a year, whereas, depending on price, CGES forecasts between 1 % and 1.3 %, while OPEC has
1.7 %. At the top end of its range, CGES believes demand will be 87.7 mm bpd, within its expected production
Nevertheless, as Wood Mackenzie points out, nothing can be taken for granted. In a note it said: "There is no escaping the fact that oil and gas are finite resources: the more that has been found, the less that remains to be found."
The crux is this: Will exploring and finding new reserves be worth it for companies? Theory suggests that as easy
resources are depleted extraction becomes more difficult, but that reduction in supply increases price, underpinning
the eventual return for companies.
Wood Mackenzie is sceptical. It points out that between them major western countries need to find reserves equivalent to Angola's every 15 months just to stand still.
It shows that new areas such as Alaska face difficulties because of extreme environmental sensitivities and
regulatory concerns. Other areas, such as Nigeria, and newer ones, such as Benin, are uncertain. Companies must take
greater risks -- such as exploration in ever deeper water, and expensive investment in extraction from shale
And it points out that reserve replacement has often been achieved by shuffling finds into the proved category rather than actually finding more oil (which underlines the importance of Shell's declassification of reserves). Eventually, it will be down to consumers to decide when the price of oil and gas makes it no longer worthwhile investing in things that are powered by them. It is likely, concedes Takin, to be well before our notional 2.3 tn barrels are used up... whenever that may be.