Somebody recently posted a message repeating a common refrain about natural resources, in this case oil. It doesn’t matter how much oil is actually out there since the total has to be finite. Oil companies don’t just make oil after all. Well, actually they can.
Most people dramatically underestimate the amount of existing oil as well as the number of nontraditional ways that oil can be extracted from the planet. Often what seems like a pipe dream today turns out to be an enormous source of oil tomorrow.
A good example of that is the Athabasca oil sands in Alberta, Canada. Discovered in the 18th century, essentially what you have is a huge area of sand saturated with oil. Of course oil mixed in with sand can hardly be refined very easily.
But, in fact, a method for separating the sand from the oil was developed as far back as the 1920s. The problem? With cheap oil prices, the process is just too expensive to bother with. Today, however, the price of the process has declined enough and the price of oil has risen enough to make separating the oil from the sand cost effective. The New York Times recently reported that with development currently under way the amount of oil extracted from the oil sands could top one million barrels a day by 2006 — more oil than comes from Alaska’s North slope. By 2010 the area could potentially produce more than two billion barrels a day.
And just how much oil is recoverable from the oil sands? The total reserves are estimated at 300 billion barrels.
Getting oil from the oil sands is hardly the only method of extracting large amounts of oil that is available but expensive. There are vast deposits of oil around the world that simply aren’t included in oil reserve estimates not because they can’t be extracted, but rather because extraction would cost too much given today’s oil prices (most estimates of oil reserves give proven or estimated oil reserves at specific price points for a barrel of oil).
But doesn’t that dodge the point that there are an ultimately finite number of barrels of oil that can be extracted. Sure, but only in the sense that the universe itself probably contains a finite number of atoms and energy and must run down at some point too.
Are you worried about the ultimate death of the universe? I’m not, for the same reason I’m not worried about ultimately running out of oil. Even assuming no technological improvements in extracting oil, the world has more than enough oil such that we will have abandoned fossil fuels for a variety of reasons long before we come close to exhausting the world’s supply of oil. There are simply too many viable alternative energy sources to fossil fuels — many of which are not exploited largely because oil remains so cheap (despite what some people seem to think, fossil fuels are still incredibly cheap sources of energy).
Eventually either technological advances will drive the price of these alternatives below the price of oil or gradual long-term rise in oil prices will spur more research and development of these alternatives. Either way, although there will still be plenty of oil left at the end of our century to power the world’s economy, it is very likely that by that point it won’t matter since we will be well on the way to obtaining energy from alternative sources.
Source:
Digging for Oil. James Brooke, The New York Times, January 23, 2001.