11 May Oil and Gas Future Series: Oil Exploration
Oil and Gas Future Series: Oil Exploration – When will we know how much is left?
When it comes to Oil Exploration, the truth is that we won’t truly know until it’s all gone, but it doesn’t look like that will be anytime soon. According to Worldatlas.com the top twenty countries with proven oil reserves account for over 1.6 trillion barrels of oil.
So now we have a rough number, but two more questions arise: “Is it possible to extract all that?” and “How long can that last?”.
Oil Exploration – Is it possible to extract all that?
Technology is ever changing. Although the concept of fracking has been around longer, it wasn’t employed with horizontal drilling until the ‘90s. Even after that we’ve made leaps and bounds in automation allowing us to get at more and more oil.
But that doesn’t exactly answer the question of how much of the 1.6 trillion barrels we can get?
These numbers are what’s known as proven reserves. You see, the key thing about proven resources is they’re calculated based on current oil price as to what could logically be extracted.
This number does not include all the known oil we have on our beautiful blue marble in space. There’s much more that we have either a) not discovered or b) can’t get to with current technology.
Oil Exploration – How long can it last?
Ignoring the likely possibility that technology will improve to the point we can get all the oil tucked away in the deepest corners of the globe, let’s talk about the 1.6 trillion barrels we can access today.
If we take the IEA’s millions of barrels per day recording from 2013 to 2016 (https://www.iea.org/oilmarketreport/omrpublic/) it’s on the safe side to assume oil consumption will go up by 2mb/day per annum. With the beginning of 2017 seeing 97mb/day we can forecast how much we use each year (roughly).
In an imperfect world, where we don’t find any more proven oil reserves, technology doesn’t increase our extraction capacity, and we don’t reduce oil consumption, then we will run out of oil in 2050.
That is a lot of things that need to go wrong for the end of oil.
What does this mean?
For you and me it means that the oil and gas industry is safe for now. We have years ahead of us to discover new oil, and for technology to improve in the industry.
That being the case, you need to make sure you keep track of your oil and gas interests today to make sure you’re getting the most for your barrels.
Comment on what you think and keep smiling!