Oil and Gas Reserves



Oil and gas form at extremely slow rates — 10’s of millions of years — so we can consider the oil and gas present now to be all that is available. We can wait around all we want and there will be no significant increase in the oil and gas.  The total amount of oil and gas in existence on Earth is sometimes called the oil in place. We can only guess at this (somewhere around 6 trillion barrels of oil equivalent), but regardless of its size, we can probably only get about 50% of it out of the ground (this recovery factor ranges from 10% to 80% for individual oil fields). The recoverable oil and gas can be divided into two types of reserves — proven and unproven. Proven reserves are the oil and gas that we know about (which means we have a 90% confidence level about them), while unproven reserves are the oil and gas that we are less certain of, but we have some indication of their existence. These reserves are usually expressed in terms of barrels of oil equivalent and includes both oil and natural gas.

It is estimated that our proven reserves are on the order of 1.5 trillion barrels of oil, and unproven reserves are thought to be in the range of 3 trillion barrels. Last year, we consumed 31 billion barrels of oil, and at this rate of consumption, we’ve got less than 50 years worth of oil in the proven reserves, and about 97 years worth in the unproven reserves. Now, move onto the first part of this assessment 1. The Simplest Case.