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The World's Oil Supplies: Total Resources Versus Reserves

Updated on October 17, 2016

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Oil Reserves
Oil Reserves | Source

The Political and Social Debate: How Much Oil Is Left?

Oil Dependence. Energy independence. Green energy. Non-renewable. Not much left. Reserves. Resources. What does it mean? These words are being used frequently in conversations and in media. In today's political climate we are hearing these words with ever increasing frequency. We have democrats accusing republicans, republicans accusing democrats, and media personalities on all sides pointing fingers, tossing out numbers, and creating accusations that the "other side" has lied.

With all of the terms that are used it is difficult to know who is correct. In order to crititically examine the energy issues and make an informed decision, we need to know what some of the vocabulary means. Scientific definitions are often different and/or more specific than everyday connotative definitions. This is the case when examining scientific uses of the words resources and reserves. When the media reports the world's resources have some many years left it is very different from stating that the world's reserves have so many years left. Let's explore these two words so that you can have a deeper understanding of reports on energy supplies.


A Story About Ohio Oil

In the early days of oil in the United States, Ohio was a large oil producer. In 1886 it was considered the "middle east" of oil, producing 24 million barrels of oil. Now when you drive around the only sign of oil production is a few lonely oil pumps scattered around rural areas. It is easy to think that this means that Ohio's oil simply ran out. The real explanation is much more complicated. Once oil was found in Ohio, people began building oil wells everywhere. It is likely that you have seen oil drilling in movies or on television. When the supply of oil is hit, it gushes out of the ground as a giant, black oil geiser. Underground oil is under pressure. When a hole is poked in the supply, it squirts out that hole. The more holes are poked, the less pressure is available. It is kind of like the water in your house, the more water is running, the less pressure is available. After time passed there were large numbers of drill sites. This lowered the oil pressure. Taking the oil out of the ground reduced the pressure further. Soon it was very difficult for companies to get any oil out of their drill sites. The oil wells were closed and the oil industry ended. There was still lots oil oil left under the ground, but it was no longer reachable. Now, over a hundred years later, we have technology to re-pressurize the wells. The problem is that the wells were not capped well in the late 1800's and early 1900s. If the wells are pressurized, the plugs will likely pop out and oil will be everywhere. Ohio is upping producing with new technology, but the reserves are still much smaller that the available resources.

Resources Versus Reserves

The story makes an important point. Resources are not reserves. These two words are sometimes used interchangeably in media. Sometimes these words are used for political arguments that make little sense when you know the definitions of these two words. One political side will say we only have so many reserves and then the other side counters that they are wrong, our resources are vast and the we are only using a small percentage of those resources. Due to definitions, both parties are right. It is not a lie to say that our reserves are expected to last 30-40 more years. This is true because despite vast resources our reserves are only a small portion of the available oil.

Textbook Referenced:

What are Reserves?

Reserves are the natural resources that with today's technology are able to be recovered at a profit. Oil reserves only cover oil that is discovered, confirmed, and able to be obtained economically. Reserves do not count oil that is:

  • Unable to be access with current technology
  • On property that does not allow drilling (private land, national parts, and etc.)
  • Unable to be accessed without violating laws
  • Unable to be economically viable

Physical Geology by Plummer, et al. (2010) places current estimate's of the world's recoverable oil at around 1,000 billion barrels. Glen Kessler of the Washington Post notes that the Unites States currently has 22 billion barrels of oil reserves, a number that has been fairly constant since the 1940s. (The United States hit a peak of 40 billion barrels in 1970.)

What are Total Resources?

Total resources are much larger than reserves because resources include all of the oil that current research shows should exist. This includes:

  • Oil that is not economical to obtain
  • Oil on private property
  • Oil on government property (national parks)
  • Oil that current laws or environmental restrictions block
  • Oil that theoretically should be there but has not been proven
  • Oil that current technology cannot reach (think of the Ohio story)

Think of some of the difficult places that we find oil: under the sea floor, in sub-arctic settings, or wedged in between individual layers of shale rather than in a pool. None of this oil is counted as reserves. Plummer, et a. note that the USGS estimates that there are around 2,300 billion barrels (including the reserve) of oil resources. Kessler writes that the U.S. is estimated to have 160 billion barrels within its borders.

Critically Analyze What you see and Hear

Knowing the difference between reserves and resources explains the media outcry on both sides about oil. When you read articles, see news, or hear speeches pay attention to the wording. Each side will use resources or reserves depending on the argument that is being made. Next time you hear one political side say, "Our reserves are only a tiny percent of the world's resources," followed by the other side saying, "They are wrong! The United States oil resources are a hundred time larger!" you can chuckle knowing that both sides are telling the truth.


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    • ib radmasters profile image

      ib radmasters 4 years ago from Southern California

      Neither of these truths are the critical factors, The critical factor is the manipulation by a world monopoly, de facto as it may be, it is still a monopoly. OPEC sets the price, and the speculators make it usually higher. Regardless of supply and demand, and the current down swing in oil prices, and prices at the pump can go sky high is a Middle Eastern Heartbeat.

      The US should have been working on alternative, pollutant free energy since the oils scams of the 1970s, which were artificially induced shortages by the Middle East to teach us a lesson about Israel.

      No one tells the truth.


    • Lwelch profile image

      Lena Welch 4 years ago from USA

      You are correct, these aren't the factors. All they are are terms that we need to understand to digest the information that we are fed.

      We should and should have been working on alternatives. There are many reasons for that... political, environmental, power, economic...

      It is very hard to know the truth about any of it. Knowing the vocabulary is a great way to start to critically analyze what we are given.

    • Larry Wall 4 years ago

      My friend IB and I disagree on a lot of things. I do not know what oil scams he was referring to in the 1970s. However, I know that we landed a man on the moon in 1969. That was a mandate from former President Kennedy. No one gave any attention to developing alternative fuels. I do not think the technology existed in 1970 to even begin a real search for alternative fuels at that point. Your analysis of reserves and resources is on target and make a very good point. The solution for the near term, and by near I mean at least 50 years, is to be allowed to recover those resources and thus reduce for foreign dependence, but knowing that those resources are going to be more expenses to extract that the traditional reserves, which means the price of energy will go up.

    • Glenn Stok profile image

      Glenn Stok 4 years ago from Long Island, NY

      It's interesting how we can be misled by politicians using words that we really don't understand. You explained the difference between reserves and resources very well and now I know the difference. But this brings up so many more questions now.

      It's important that we become independent of OPEC oil. And we have the resources to do it. But as you explained, it can be very costly to keep the reserves available.

      Larry Wall made a good point in his last comment. It seems pretty certain that energy independence will not necessarily mean cheaper oil.

    • Lwelch profile image

      Lena Welch 4 years ago from USA

      Well we are up 7% in oil production so far this year. We are almost beating Saudi Arabia in oil production. Despite this gas is over $3.00 here. Proof there is much more to the story.

      Glenn, I agree that Larry is right... more oil doesn't mean less money. Now here is the kicker... would it be different with a different power source? If you have ever played the boardgame Powergrid you know that the market can be manipulated in odd ways....

      Thank you so much for stopping by. It is important that we fact check and learn. So often we are told the truth but hear the spin.

    • Larry Wall 4 years ago


      I saw the story about increased U.S. production. My concern, and I am not a geologist, is that the shale plays, where a lot of this new oil is coming from are going to be as productive for as long as some people are predicting. The same issue affects gas.

      The solution is to take advantage of this abundance and while we have it, come to some consensus on alternative fuel sources and how they can best be used in certain areas of the country.

      What we have to watch out for is that the OPEC nations have nationalized oil companies and can lower the price at will.

      The U.S. production comes from private (publicly traded but not government owned and independents) who would have to meet those prices. If the U.S. was to embargo the importation of foreign oil, we would create a global crisis. We could continue to sell our oil at a higher price, until the supply reaches the point again, and it will, that we have to import. Then you will see some very high prices.

    • Richard Gerome 4 years ago

      Two more words: Capacity and fungibility. Why are these more important that reserves or resources? Because spare capacity is what allows for liquidity in the market. Also, oil is fungible, meaning that any additional production in the US is just as advantageous to China, India, and other emerging markets.

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