Recently, Newsweek invited its Twitter followers to suggest topics to discuss here on this blog. We had a great response and a lot of ideas. But I noticed that one theme kept coming up: Is the world running out of oil?
This is a legitimate question, and one that those of us at ExxonMobil hear frequently; so, I’d like to address it.
Oil is not the world’s only energy source — it currently accounts for about 35 percent of global demand — but it is our single largest energy source, and it fuels nearly all the world’s transportation. It’s very understandable that people want to know what the future holds for this resource.
So, let’s take a look at some facts about our oil resources, as well as some historical perspective.
First, some facts: The U.S. Geological Survey, to cite just one authority, has over time significantly increased its estimate of the world’s recoverable conventional oil resources. It now estimates that only about one-third of these resources have been produced to date. Many times in modern history, experts have worried that recoverable oil resources were nearing depletion, only to be proven wrong as new technologies opened up new avenues for production, both onshore and offshore.
There was an interesting historical perspective on this issue in the pages of Newsweek itself just recently in an article by George Will. In the article, Will talked about various estimates for oil supplies, such as the Bureau of Mines saying in 1914 that U.S. oil reserves would be exhausted by 1924. In 1939, the Interior Department said global reserves would last 13 years. And, more recently: In 1970, global proven petroleum reserves were estimated at 612 billion barrels. By 2006, more than 767 billion barrels had been pumped, yet proven reserves had risen to 1.2 trillion barrels.
Even though significant oil supplies remain, it doesn’t mean the world should not be developing other energy sources besides oil.
For one, the scale of the world’s energy needs today is beyond what any one fuel could provide. And, because of expanding populations and economies, by 2030 global demand will be about 35 percent higher than it was in 2005, even with substantial gains in efficiency. We will need to expand all economic energy sources to meet this demand growth. That means we’ll need natural gas, coal, nuclear and emerging alternatives such as wind and solar, in addition to oil.
But back to the original question: Is the world running out of oil? No. Not even close.
However, the world’s remaining petroleum reserves do require more complex technologies, and higher levels of investment, than they did a generation ago. For example, the world is increasingly looking to oil sands, ultra-deepwater, and arctic resources. ExxonMobil is utilizing advanced technologies to unlock these resources – technologies such as extended reach drilling, which allows us to drill wells targeting reservoirs that are miles away from the surface location; 3D seismic and electromagnetic mapping methods that improve imaging of oil and gas reservoirs; and enhanced oil recovery techniques that significantly increase oil recovery in producing fields.
We also need to use energy resources – including oil – wisely and efficiently. Energy efficiency extends the resource endowment and reduces emissions. For ExxonMobil’s part, we invest in technologies to improve our own use of energy, and to help consumers use energy more efficiently as well. In our operations, for example, we take advantage of a process called cogeneration that simultaneously produces electricity to power our operations and captures useful heat or steam for industrial processes. Our cogeneration capacity is enough to supply the electricity needs equivalent to more than 2 million homes in the United States.
For consumers, our vehicle technologies – such as lightweight plastics that reduce vehicle weight, advanced tire-liners that keep tires inflated, and synthetic motor oils that improve fuel economy – can help save significant amounts of fuel. At the same time, we continue to work on developing breakthrough energy technologies that can supplement energy supplies in the future, including algae-based biofuels.
I hope this helps to address the questions we received on the future of oil. Thanks to Newsweek’s Twitter followers for submitting their ideas, and I welcome your questions about our energy future.