It is not something I worry about, but for those of you who believe we are running out of oil:
With no new oil whatsoever, this would last over 40 years. But that is not even a relevant economic issue. If you are worried about fossil fuels and climate change, this chart should worry you. A question for the doomsdayers: how can it be that we use more and more oil, it is limited, evil corporations try to restrict output to keep prices higher, etc. yet we have double the “reserves” today than we had 30 years ago, all the while using oil at rates that should have depleted the “known” reserves from 1980? To an economist, the answers are obvious.
I’m sooooo tired of hearing from the peak-oil fetishists.
The deepest oil well that man has ever dug is just shy of 7 miles (BP’s newest well, tapped this year). Earth’s mean radius is about 4,000 miles. We don’t even know how much we don’t know.
Wintercow, your server seems slow. Is Speedmaster secretly sabotaging your beacon of reason?
I’m perplexed by Protestor’s comment, but perhaps he/she can explain. “Mark-to-Market” is an accounting rule which last year contributed to the financial mess we found us in, before this year’s financial mess. That’s not to say that Fannie Mae did not have a starring role.
It terms of what I suspect “mark-to-market” to mean, this level of measured reserves includes only what is “economically recoverable” which is of course a cloudy term. Generally, it represents about 30%-35% of a given well’s capacity, given today’s technologies and expected prices. My guess is that the mark-to-market concept is thinking that I am seriously UNDER-stating how much oil is around – which is no doubt true.
1. “We” have explored something like one-hundreth of a percent of the possible volume of earth that might have oil … and even doing that we still have “43 years” of oil left (note that this is a stupid notion – we had 32 years left when we had 500 billion barrels in the ground back in 1970, … now we use twice as much and have MORE time left … hmm, must be an evil conspiracy).
2. These reserves do not generally include non-traditional sources of oil (tar sands for example).
3. Even now, geologists suspect we have 10 trillion barrels in the ground.
4. Oil can be created, albeit expensively, with appropriate energy, so it is not even a useful assumption to call it limited.
5. If we improve technologies sufficiently, that “limited” supply can last a very long time. For example, assuming (incorrectly) a one-to-one relationship between fuel economy and oil usage, if in 20 years all of our cars get twice the mileage (and this is our only use of oil), then suddenly (ignoring sub effects) that 10 trillion barrels in the ground is effectively 20 trillion.