The Western Hemisphere is looking more promising as a source of crude oil, while today’s oil powerhouses—the Middle East and the Former Soviet Union—may have significantly less undiscovered oil than previously estimated, according to a new study by the U.S. Geological Survey (USGS).
Also, the prospects for finding more oil are getting dimmer, at the same time the outlook for natural gas is getting brighter, according to the assessment.
At a press conference on the report, Interior Secretary Ken Salazar spoke just after returning from a trip to Brazil. “With the offshore of Brazil holding nearly half of all of South American oil resources, we have a shared interest in helping Brazil develop its oil and gas reserves,” Salazar said, which would help “secure more of our energy from the Western Hemisphere, and strengthen our overall energy security.”
The last time the USGS did a complete survey of world oil was back in 2000. Since the data was collected for that report, the world has consumed about 450 billion barrels of oil—two-thirds as much as had been used up to that date, over the entire previous history of the oil industry.
Given this prodigious use, oil companies are constantly scouring Earth in search of new oil fields. While they make their own assessments of how much oil might remain to be discovered, the only detailed, publicly available assessment of that kind is from the USGS. The new USGS survey focuses only on “undiscovered, technically recoverable” oil—that is, oil that has yet to be found, and that is plausible that people could get out of the ground.
The total amount of oil left to be discovered around the world is 565 billion barrels, the USGS estimated. That’s a drop of 13 percent from the 2000 study, which put the figure at 649 billion barrels.
Behind this drop, there are some large regional shifts. In two key regions in the Eastern Hemisphere—the Middle East and North Africa, as well as the Former Soviet Union—the amount of oil left to be discovered is about half as much as in the USGS’s 2000 assessment. Instead of holding more than half the oil remaining to be discovered, as in the 2000 assessment, now these areas are thought to hold less than a third of oil yet to be found.
Meanwhile, compared with 2000, the prospects in Central and South America are up 20 percent, to an estimate of 126 billion barrels, higher than any other region in the world (just surpassing the Middle East and North Africa, with 101 billion barrels).
Also, Sub-Saharan Africa’s estimate was up more than 50 percent, reaching 115 billion barrels.
While the figures for undiscovered oil dropped 13 percent, the estimated amount of undiscovered natural gas outside the U.S. went up by 20 percent. “What we’re seeing is more gas, versus oil,” said USGS director Marcia McNutt at the press conference. “That is something that we might want to take into account in our future energy mix.”
The assessment is the first time the USGS has covered the Arctic, said Chris Schenk of the USGS, and “that turned out to be mostly a gas area, so that increased the gas numbers.” Other regions turned out to be more “more gassy,” and contain less oil, than thought before, he added.
A note of caution, however, about the absolute size of the USGS figures. Some have criticized the USGS figures for being overly optimistic. Kenneth Deffeyes, a retired geologist from Princeton University, has called the 2000 assessment “implausibly high.”
In 2004, Deffeyes predicted that global crude oil production would reach a peak on Thanksgiving Day, 2005. The precision was a joke, but the forecast was serious.
It appears that Deffeyes may have been close to the mark. Fatih Birol, chief economist of the International Energy Agency, said last year that it appears the world reached the peak of crude oil production in 2006—and since, crude oil production has been roughly flat.
With that peak of crude oil production, the world is becoming increasingly reliant on unconventional sources, which weren’t included in the new USGS assessment.