How much oil do we have left? According to the United States Geological Survey's (USGS) latest report, published in 2000, the planet had 3 trillion barrels of oil and gas before we started using it up. It calculates we have used some 700 billion, leaving 2.3 trillion barrels underground.
A simple calculation using data from the Center for Global Energy Studies (CGES) shows that with 28.8 billion barrels currently being used a year (79 million a day), there is some 80 years of supply left in the ground.
However, the 2.3 billion barrels left includes 1.4 billion which, according to USGS analysis of global geology, exist but have yet to be discovered. That leaves roughly 890 billion barrels of oil and gas that have been discovered and are booked as proven reserves -- roughly 31 years' supply.
This estimate is lower than the industry's. BP's oil statistics -- the industry bible -- indicate some 1,047 billion barrels of proved reserves -- 36 years supply on current usage.
But analysts don't worry about this too much. Derek Butter of consultancy Wood Mackenzie says: "It is not something we get hung up about. We think in the medium term there is enough oil in reserve."
The BP statistics show that over the past decade, reserves have been roughly constant -- in 1992 there were 1,006 billion barrels -- indicating that through the 1990s the industry has been effective at finding reserves to replace the resources we use. It has done well -- in 1982, the figure was only 676 billion.
Manouchehr Takin of the CGES says: "Forty years ago, economists and geologists said there were 40 years of oil and gas left. Now they are saying the same."
He adds: "The techniques for finding oil and extracting it are advancing rapidly. It shows that at any one time what is left, and the time it will take to use this up is only a snapshot dictated by the current state of knowledge. And, of course, there is the impact of economic development, and the efficiency with which we use energy."
Efficient energy use, he argues, has offset the growth of formerly non-industrialised countries, such as India and China, which have anyway not grown as rapidly as was expected in the Sixties and Seventies. Similar dynamics are likely to continue.
Nevertheless, demand for oil is likely to increase, as, over time, is the price. Former UK Environment Minister Michael Meacher pointed to a crunch by 2015, when he says demand is likely to total some 60 million barrels a day more than the current 79 million, while supplies will only be some 90 million.
CGES argues that Meacher has overstated the increase in demand. It argues that taking reserves into account, his estimates imply 4 percent growth a year, whereas, depending on price, CGES forecasts between 1 percent and 1.3 percent, while OPEC has 1.7 percent.
At the top end of its range, CGES believes demand will be 87.7 million barrels a day, within its expected production level.
Nevertheless, as Wood Mackenzie points out, nothing can be taken for granted. In a note last week it said: "There is no escaping the fact that oil and gas are finite resources: the more that has been found, the less that remains to be found."
The crux is this: Will exploring and finding new reserves be worth it for companies? Theory suggests that as easy resources are depleted extraction becomes more difficult, but that reduction in supply increases price, underpinning the eventual return for companies.
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