Our Vast Oil Reserves
By Arnold Kling
From a RAND study:
The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming…For potentially recoverable oil shale resources, we roughly derive an upper bound of 1.1 trillion barrels of oil and a lower bound of about 500 billion barrels…the midpoint in our estimate range, 800 billion barrels, is more than triple the proven oil reserves of Saudi Arabia. Present U.S. demand for petroleum products is about 20 million barrels per day.
That’s the good news. But
at least 12 and possibly more years will elapse before oil shale development will reach the production growth phase. Under high growth assumptions, an oil shale production level of 1 million barrels per day is probably more than 20 years in the future, and 3 million barrels per day is probably more than 30 years into the future.
The RAND study says that oil shale has the potential to be competitive if oil prices remain at $30 a barrel or higher.
Based on this study, it’s hard to see us running out of oil. If it were feasible to start extracting 20 million barrels per day right now, at our current rate of oil consumption we would have about 100 years’ worth. And if it’s going to take 30 years to get to the point where we can extract even 3 million barrels a day, then depleting all that oil is going to take much longer than 100 years.
Actually, I don’t think that we’ll ever use significant amounts of shale oil. That’s because I believe that over the next 20 years, technological advances in solar power or some other field will drive the price of oil below $30 a barrel.
UPDATE: Several comments have voiced skepticism about whether it takes more energy to extract oil from shale than what can be obtained from the oil itself. However, this story says,
The energy balance is favorable; under a conservative life-cycle analysis, it should yield 3.5 units of energy for every 1 unit used in production. The process recovers about 10 times as much oil as mining the rock and crushing and cooking it at the surface, and it’s a more desirable grade. Reclamation is easier because the only thing that comes to the surface is the oil you want.