On oil reserves

posted 30 June 2009

So today @rands linked to the world clock, a cute little thing that counts various numbers up and down, like food production, population, illnesses, pollution, and energy. One of the numbers Michael pointed to in particular was the "oil depletion timer": 14,776 days of oil left. Only 40 years! Far off -- but not that far off! Scary! Ooo! Peak oil!

I call bullshit.

So here's the thing: I come from an oil producing nation. And for as long as I can remember, we've always had "only 30 years of oil left". Here's a graph of Trinidad's oil production since 1980 (source):

Trinidad and Tobago crude oil production by year, 1980-2006

What would you expect the graph to look like over two decades for a country that only had 30 years of oil left? A steady decline? A ramping up and then a sudden fall? Some sort of bell curve? Instead, this graph actually looks very like another graph (source):

Monthly crude oil prices, 1946-2009

In other words, we produce more oil when it is more profitable to do so. That's not a government decision, that's an oil company decision. And its those same oil companies who decide when to go looking for more oil. That's why, 20 years after the first time I heard the statistic, we still have more than 30 years' worth of reserves left. And so does the world. Proven world oil reserves have been rising for a decade. We only go looking for more oil when we're beginning to run low, somewhere around the 30 year mark.

I'm not saying that the world has enough oil to last forever. I'm also definitely not saying that relying on oil as an energy source is a good idea. I'm just saying that we have lots and lots of time to sort it out.