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March 13, 2012

Exposing the 2 percent oil reserves myth

March 13, 2012
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“The United States holds only 2% of the planet’s proven oil reserves,” President Barack Obama[i]

According to President Obama, the United States contains only 2 percent of the planet’s proven oil reserves, Of course, he’s right — to a point. In classic fashion, he’s using a technicality to skirt the facts and keep the myth of energy scarcity alive. The reality is that the U.S. has enough recoverable oil for the next 200 years, despite only having 2 percent of the world’s current proven oil reserves.

Proven oil reserves are not all of our oil resources—not even close. In fact, proved reserves represent a tiny portion of our total oil resources. Proven (or proved) oil reserves are reserves that have already been discovered, typically through actual exploration or drilling, and which can be recovered economically. That estimate does not include oil that we know about, yet are unable to access because of regulatory barriers. For example, the billions of barrels of oil in ANWR are not included in our proved oil reserves.  So let’s look at the facts.

Currently, the United States has 1,442 billion barrels of technically recoverable oil, but only about 20 billion barrels are considered proven oil reserves.[ii] That is partly because the federal government is denying access to hundreds of millions of acres oil-rich federal lands: the Alaskan National Wildlife Refuge, the Naval Petroleum Reserve-Alaska, federal waters off the Atlantic and Pacific coasts, at least 45 percent of the Gulf of Mexico, the Chukchi and Beaufort Seas, and oil shale on federal lands in Colorado, Utah, and Wyoming, to name a few. In the case of oil shale (an oil composed of kerogen), technology needs to be perfected to make its production viable, but this will not happen until the land is leased. Regrettably, the Department of Interior has stopped a leasing program Congress directed it to undertake.

Proved Oil Reserves Are Not Static

Let’s take a look at history. In 1944, U.S. proven oil reserves were 20 billion barrels — about the same as they are today. Yet, between 1945 and 2010, the United States produced 167 billion barrels of oil. In other words, the United States produced over 8 times more oil than the amount of proven oil reserves it had in 1944.  How can that be? The answer is that proven oil reserves are not stagnant because people keep looking for oil. Proven oil reserves keep changing, are officially recorded every year, tallied country by country, and published in the Oil and Gas Journal, among other publications. And due to U.S. entrepreneurship and ingenuity, more reserves are found and proven each year.

What happens is one or more of the following: 1) technology is found that converts hard-to-produce resources into proven reserves, 2) oil prices increase to allow more expensive types of oil to be produced, and/or 3) companies are able to purchase additional leases and explore for new basins of oil. An example of the first case where technology enables oil resources to become proven reserves is hydraulic fracturing and horizontal drilling used to produce shale oil resources, most notably in North Dakota. North Dakota now ranks third among the states in oil production.[iii]  Its proven reserves have increased 25-fold in 13 years, and are likely to grow much larger.  An identical increase from the rest of the United States would result in US reserves of 500 billion barrels, or almost twice those of Saudi Arabia.

What Does More Recent Data Look Like?

So, is this an historic anomaly? No. Let’s look at more recent data. In 1980, according to the Energy Information Administration, the United States had 31.3 billion barrels of proven oil reserves. However, between 1980 and 2010, the United States produced 77.8 billion barrels of oil and still had 20.7 billion barrels of oil reserves left. In other words, between 1980 and 2010, the United States produced 2.5 times the amount of oil as it has proven oil reserves in 1980.

Conventional and Unconventional Oil

Proven oil reserve data for the most part are comprised of conventional oil resources. Yet, today unconventional sources of oil are being produced. For example, Canada has proven reserves of conventional oil of only 5 billion barrels, but has 170 billion barrels of oil sands–a heavy oil whose production is based on unconventional technology –either by open pit mining or in-situ techniques, which reduce the viscosity of the oil by injecting steam and/or hot air into the oil sands. Canada’s proven oil reserves are officially set at 175 billion barrels, because it requested that oil sands be included in its proven oil reserve estimate. Canada now ranks third in the world in proven reserves, behind Saudi Arabia and Venezuela.[iv]


Proven oil reserves are not stagnant. They are continually changing as companies explore, find and produce oil.  Declaring that “the U.S. has only 2% of the world’s oil is akin to saying that the only gasoline we will have is that which is in our tanks.”  The president should know better, and if he does not, his Secretaries of Energy and Interior should tell him.

So, what can be done to increase our oil reserves?  First and foremost, the United States needs to open more federal lands and waters to oil leases. Currently, only about 3 percent of government property is leased for finding energy.  Once that is done, American ingenuity will take over to explore and produce those resources. ”According to a Gallup poll, an overwhelming number of consumers — 85% — say Obama and Congress should take “immediate” action to keep a lid on (gasoline) prices.”[v]

It is time our government stops misleading the American public and starts owning up to the reality of our energy situation – we are a nation rich in energy resources with poor policies that do not allow us to access them.

[i] L. A. Times, Federal report: U.S. oil imports down, domestic production highest since 2003, March 12, 2012,,0,1926377.story

[ii] Institute for Energy Research, North American Energy Inventory, December 2011,

[iii] Reuters, Shale boom turns North Dakota into No. 3 oil producer, March 8, 2012,

[iv] Energy Information Administration, International Energy Outlook 2011, October 2011,

[v] USA Today, Gas prices must come down consumers say,

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  • Willis Forster

    It is not a myth, it is a fraud in the the order of lies, damn lies, and statistics.

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  • LiarLiar_PantsOnFire

    This information is important in many ways.

     What if our lawmakers, the heads of the Bureau  of Land Management,  Depatment of energy and other departments of mis-information,  were required by law to respond, recuse or publically accept factual information of this sort.  As it stands now all branches of our governing bodies are bullet proof when it comes accountability.


    • shagspur

       If the US has 60 times more unfound oil than shown by proven reserves, isn’t it fair to say that the rest of the world does, also?  And in that case, isn’t it obvious that we still have only 2% of the world’s reserves?
      You right wing dinosaurs shouldn’t try to think so hard.  Your brains are too small, but, rest assured, in 100 million years, all our bones will be contributing to the creation of more fossil fuel. In this respect, no life form is more important than any other, and all the rest is just stupid noise.

      • Scott

        There are other oil shale reserves around the world, however US of A has the lagest on the planet. The only middle east country having oil shale is Jordan. You put algae in your tank, I’ll require Congress and the President to develop Oil Shale reserves for gasoline for mine. Quit lying to yourself and others because of your politics. I for one think you’re smarter than you think. You just might have to use more than 1% of your brain. Quit bowing at the alter of Obama, lunatic.

        • shagspur

           “Altar” has no “e.” 
           Anywhere that dinosaurs roamed (150 million years of dinosaurs)
          will have oil reserves, and shale…and most of it has not been
          established….  Playing games with the 2% of proven reserves is manipulative and false….  but!!!!!….the point is that producing oil from shale
          is filthy and expensive.  If we weren’t dinosaurs, we would all be
          buying solar panels.

          Look, the age of wood as the primary source of energy lasted roughly a
          hundred thousand years.  (Ten thousand years of “civilization.”)

          Coal has been with us for two hundred years…petroleum for one hundred
          and fifty.  Do you think that the “Blacks” can win out over the “Greens”
          for another thousand years?  Or a hundred? Or even fifty?

          That’s the question, Mr. Oil Lover, Mr. Black and Brown Sludge, Mr. Filthy water and filthy air.

          As you can see, I am not inclined to be kind to the “Blacks” because I believe you are dinosaurs.  And I freely admit to being a lunatic.  After all, I can see things that are invisible to you, so it’s obvious that you are right.

          • Taylor Foster

            Dead dinosaurs are not petroleum. Ancient algae, plankton and plant matter are oil. Don’t correct others when you yourself don’t know what you’re talking about.

          • shagspur

            Oh Taylor, you are so correct, except that it doesn’t matter whether I say dinosaurs, or algae; You are a Black, and as a Black,if you don’t like being called a dinosaur, I am perfectly happy to stipulate that you are plankton, . My larger points stand: first, that we are evolving beyond the use of fossil fuels and second: that i can see things that are invisible to you (Just like the polls of the 2012 election: Visible to Democrats but invisible to Dinosaurs!).

        • shagspur

          America may have the largest discovered oil shale reserves, but nobody knows yet what other reserves are out there. And they are out there! The sun shines and the wind blows, and it is not I lying to myself, but you and all those other fools who still think that the 2012 polls were skewed Democratic (They were actually skewed Republican, overall!)!

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  • Laurent

    But using this oil is unrealistic. 
    American oil shale is estimated to hold more than 1.8 trillion barrels of recoverable oil. 
    Oil shale must be heated to temperatures between 400C° and 500C°.According to Shell, to produce 100,000 barrels per day, 5 million tons of coal and at least 4.6 billion gallons of water are needed each year.The largest deposit of oil shale in the United States is near the Colorado River basin, which could run out of water in 2050.
    As U.S. is using 18,8 million barrels a day…

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  • Mark

    Pssssssss!  Hot stock tip.  (Algae) 

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  • Frank Sheeran

    The factual part of this article is really nice.

    The opinion part–the first and last paragraph basically–is weak.

    The first paragraph implies that Obama has a special affinity of only quoting figures that suit his goal.  In fact thats something true of all Presidents and most Americans and indeed humans I’ve met.  If I had written the speech I’d have avoided that assertion because once its shown to be weak (as you’ve done) the natural response is to discard his conclusion that increased exploration isn’t a good idea.However, the “2% of world reserves” isn’t the only or even main reason to cut oil exploration and consumption.  And therefore refuting this pillar from supporting the conclusion doesn’t refute the conclusion.Take a look at a city like Zurich, which almost every year is awarded “world’s highest standard of living.”  Its 4-6 story mixed-zoning, with retail at the ground level, office space above that, and apartments on top.  Although there’s an excellent public transport system, most people simply walk or bike to the grocery store, school, and work.  Its faster and healthier; the air is cleaner.  The decreased oil usage is actually correlated with the higher standard of living.  In contrast, in the suburb I grew up in, one had to drive to the convenience store–how convenient!  Especially for those who can’t afford a car.Next point is Ecology.  As an engineer I know that with some time, effort, and patience we can recover from most oil spills and from rising sea levels.  But all in all wouldn’t it be better NOT to have to clean up Deep Water and so on?  I also am sure that even without humans, there’ed be a fair amount of global warming–but also that humans are producing some portion of it.  How much is the human portion?  1/20? 1/2?  No-one honestly knows.  Several trillion dollars may well be enough to build a sea wall around Manhattan, Miami, and LA.  But rather than build such a wall, its be better to incur costs of even 10-100 billion in trying to keep the warming down just a bit.  I’ll even agree that in 150 years, with 20/20 hindsight it may have proven a regret that we bothered to conserve–but I think its far more likely we’d look back and wish we had conserved a bit more.Economically, even if the US produced far more oil domestically (its already the world’s #1 producer–NOT Saudi Arabia or Russia!) there would stlil be a large exposure to imported oil, which gives the US an economic and military “Achilles Heel.”  The US must currently (because the US electorate will fire any politician involved in higher prices at the pump) take steps to “ensure” smooth foreign production as well.  This means military in the mid-East; cosying up to repressive regimes; pissing off people who don’t like those regimes; having some terrorism; paying for the “Homeland Security”; lowering the interest of foreigners studying at US universities, which in turns weakens the “soft power” the US has had.  Finally, whether fueled by imported oil or domestic, cars running on oil need roads, which consume huge amounts of money, resources, and real estate.Finally, is there any amount of increased domestic production that would substantially lessen the US’s dependency on imported oil?  If the US produces say 1/2 its own oil today, doubling production doesn’t remove foreign dependency.  Instead it will lower prices, increasing the number of people commuting longer distances one per pickup or SUV, increasing oil usage… imports would in fact probably only be a little lower, so the US would continue to have unpopular, expensive policies in the mid-East.  This isn’t a guess–this is already demonstrated.  The US imports about as much oil per person as Germany, which has no reserves whatsoever!  So the oil production in the US–already half our consumption and the largest production in the world–hasn’t seemed to cut imports at all.

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