Gauging the Global Fuel Tank’s Size

Will the world’s oil and gas reserves last through the 21st century?

The question is once again relevant--as the prices of gasoline and natural gas soar and as urgent calls for energy conservation go out for the first time in 20 years.

Estimates of global reserves vary widely, but most of the forecasts are optimistic.

After five years of studying geological structures, a scientific task force of the U.S. Geological Survey has concluded that the world has enough oil to last through the century--more than 2.3 trillion barrels worldwide. Much of that, however, is in reserves that have not yet been discovered but which the agency’s scientists believe are out there.

At the M. King Hubbert Center at the Colorado School of Mines, however, a group of geologists believes world oil production will peak by the end of this decade and go into a severe decline soon afterward. The center is named after a geologist, now deceased, who correctly predicted a peak of U.S. domestic oil production in the 1960s. Believers in Hubbert’s theories now contend that world production could fall to 35 million barrels a day by 2020 and less than 10 million by 2100.

That view is strongly rejected by the government’s geologists and many outside experts.

“Again and again,” pessimistic predictions about oil and natural gas production have proved wrong, said Daniel Yergin, author of the 1991 book about the oil industry, “The Prize.”

Yergin recalled that as early as 1880 and again after both World War I and World War II, skeptics said oil was about to run out. “Today, proven reserves are double what they were in 1970,” he said. “We know the oil supply is finite. We just don’t know how finite.”

Both sides in the debate agree that comparatively minor amounts of the world’s future supply of oil and gas remain to be produced in the United States.

The Geological Survey task force sees the most future production coming from Russia and the Middle East. It also identified major oil and gas prospects in areas that are undeveloped, including the northeastern coastal shelf of Greenland and the northwestern coast of Australia.

Rising gasoline prices this spring have been caused by shortages in refinery capacity and stockpiling rather than any shortage of crude oil. But the pessimists contend that an impending worldwide shortage of crude will soon send prices ever higher and force a radical change in the global economy.

At a recent meeting in Los Angeles of the Geological Society of America, Walter Lewellyn Youngquist of Eugene, Ore., a retired geologist and author of the 1997 book “GeoDestinies,” declared that, based on Hubbert’s ideas, world oil production, now 72.6 million barrels a day, will peak at 83 million a day by 2007 and then decline.

Since 1990, only about one new barrel of oil has been found for every four produced, Youngquist said.

By contrast, Thomas S. Ahlbrandt, chief of a five-year world energy assessment by the Geological Survey, said recently that his staff estimated that less than one-fourth of the world’s total oil has been consumed. He said production is not likely to peak worldwide until about 2036.

The assessment showed that 710 billion barrels of oil have so far been consumed. According to the survey, proven reserves total 891 billion barrels with the potential to grow by another 688 billion barrels. Based on its assessment of worldwide geologic systems, the survey estimated that an additional 731 billion barrels remain undiscovered.

Writers for the Hubbert Center’s quarterly newsletter maintain, however, that a number of countries, particularly in the Middle East, have grossly overstated their reserves. They also believe that much of the undeveloped resources are in places that may prove too costly to exploit, such as deep ocean basins.

One of the most pessimistic is Colin J. Campbell, a petroleum consultant living in Ireland, who sees recoverable new discoveries as limited to a maximum of 85 billion to 100 billion barrels, “enough to meet demand for [only] three to four years.”

The fact that the industry is searching for oil in deep basins, the Arctic and the Antarctic is seen by the pessimists as proof of their case. If new oil were readily available on land in the temperate zones, that’s where the search would be focused, they assert.

All sides agree that both supply and price prospects are brighter for natural gas in the long run. Even in the United States, production is expected to rise in the decades ahead and reserves are expected to last several hundred years.

The Geological Survey believes that only about 11% of the world’s natural gas has been consumed.

The survey’s task force concluded that the world has consumed 1,752 trillion cubic feet of gas. It said proven reserves are 4,793 TCF, estimated reserve growth at 3,660 TCF and projected that an additional 5,196 TCF of gas will be found in reserves that have not yet been discovered.

Oil industry experts make similar projections. Daniel Steward, a manager of Chevron facilities in Bakersfield, said there are too many unknowns about oil and gas to settle on any peak production year.

“What about oil shales and tar sands?” he asked. “When will they be [economical] to produce? What about the Antarctic basin, or ocean deep-water basins? How about recovery improving in mature fields? What about ‘stranded’ super-giant fields which are currently uneconomic for production but won’t always be?”

Robert Esser, a geologist working for Yergin’s Cambridge Energy Research Associates, said that if natural gas liquids recovered with oil are included, the productive capacity of the petroleum industry is already at 79 million barrels a day and will reach 83 million by next year.

Esser sees it going to 92 million barrels a day in 2005 and 100 million in 2010.

“We will have significant new capacity by 2020, and the peak does not appear in our outlook through 2020,” he said.

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Two Views of Oil Reserves

The so-called Hubbert Curve predicts daily oil production worldwide will rise to a peak of 83 million barrels a day between the years 2007 and 2010 and then quickly decline to about 35 million barrels a day in 2020.

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By contrast, government experts project that proven reserves plus undiscovered reserves they believe will be found will allow for another century of consumption at current levels.

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Conventional Oil Endowment of the World

This map shows the regions that U.S. government experts believe contain most of the Earth’s remaining oil reserves.

Sources: U.S. Geological Survey, M. King Hubbert Center at the Colorado School of Mines