Oil Reserves Are Growing – Should We Cheer or Remain Vigilant?

Photograph by Plamen Petkov for Bloomberg

I read a Bloomberg Businessweek article here and I found it really interesting. Amid the long clamorous campaign of most of our society (perhaps mostly the environmentalists) to reduce the use of fossil fuel (mostly oil), there is an astonishing idea from Daniel Yergin who claimed that the technology advances and new discoveries have led worldwide oil reserves to growing. This is the main claim: “For every barrel of oil produced in the world from 2007 to 2009, 1.6 barrels of new reserves were added“. Well, that seems good for human being, but most likely bad for mother earth. In fact, it is the benefit of human being that allows mother earth to suffer more. Why is that? The first plausible idea is perhaps this will ease the alarming awareness (or fear) of tackling climate change that has been enforced internationally both in macro and micro level. However the article doesn’t reveal the mechanism behind this oil-reserve expansion.

Before we delve into the next ideas outlined by Bloomberg, let us play some math here. If you compare the data of global oil reserves from here and global oil consumption from here, then we can do simple calculation to predict the bussinessweek claim. I wish to find the recent data, but it seems hard to find all the countries update their reserves and consumption. Even the Wikipedia version doesn’t cover the recent one. By doing the calculation of dividing the total data of oil reserves with total data of oil consumption (both globally) then we end up in the number arround 47 years. That’s not so far from bloomberg calculation. Perhaps the most recent data suggest that bloomberg’s number (38 years). But this number doesn’t mean so much. It is frivolous to just use all the reserves completely with the current consumption rate, right? There must be new resources of energy being generated during that period, there must be new efficiency of oil usage by discovery of new technology, and the list will go on. So 38 years later won’t be the peak oil. There seems no doubt about the prediction.

Next thing, in that article Bloomberg claimed that expanding resource (oil and minerals) reserves means great news for poor countries which are home of many mineral’s discoveries. Well this is very debatable seeing the obvious facts of how resources such as oil has become the major problem in developing countries either in politic or economic climate. But I agree with the article that extracting most of these abundant resources seems lunatic to do. Beside the fact that it will seriously damage our Earth even further, the political and social turmoil it may inflict is enormous for sure. So, there should be no way these countries (where under their geographical areas myriad oil exist) proactively engage in new deal with oil companies to extract these hidden oil reserve. Perhaps, they may opt for it, but it shall not the main objective they pursue in fulfilling their countries’ energy needs. Given these tempting facts, the ongoing idea of developing new energy resources (of course the renewable ones) should not dwindle any little. It should remain being focused in order to gradually replace our old “black gold”. Therefore, instead of being cheered up by this fact, we should better remain vigilant in utilize it.