Why is oil depletion always predicted to be 50 years away? Oil’s reserves-to-production ratio (R/P), technological advances, and new resource discoveries are the main factors that keep extending this prediction. It’s impossible to predict exactly when oil will run out, and the R/P metric is an imperfect way to estimate when it will run out.
When will we run out of oil? Many people may have heard from various sources that we will run out of oil in about 50 years. If that’s the case, then we should expect to live in an oil-depleted world in about 2073, and the oil depletion predicted 50 years ago should be 100 years from now. However, those who lived through that time will know that the predicted timing of oil depletion was not much different then than it is today, meaning that oil was predicted to run out in roughly 50 years. However, given that petroleum requires the long deposition and maturation of large amounts of organic matter, it is unlikely that the amount of petroleum in the ground has increased.
To answer this question, we need to understand the Reserves-to-Production Ratio (R/P) of oil. R/P is the number of proven reserves over a given period of time divided by production, and is an indicator of how much oil can be produced in the coming years under current conditions. A misunderstanding of this metric can lead to misleading conclusions about the timing of oil depletion by confusing it with R/P. However, it’s important to note that R/P is a fluctuating number that depends on the amount of proved reserves and production. In fact, the R/P for each year of oil has been increasing over time, which means that we can expect more years of oil production in the future.
So what’s driving the increase in R/P? Since R/P is proved reserves divided by production, we can look at it in terms of both proved reserves and production. If proved reserves were constant, the R/P would increase as production decreased. However, in reality, global oil production has actually been increasing since the 1980s. This is because the demand for oil has increased along with industrial development, which has increased supply. Therefore, the increase in R/P is due to an increase in proved reserves that exceeds the rate of production growth.
Before we look at the reasons for the increase in proved reserves, let’s define them. Proved reserves are those reserves that are mineable, well-defined, and economically balanced with current technology. In other words, if a resource can be produced and is economically viable, it is included in Proved Reserves, which can increase as technology improves. The recent example of shale gas is a good illustration of this. Shale gas is a resource that has become economically viable due to technological developments such as hydraulic fracturing and horizontal drilling. In addition, the amount of proved reserves is expected to continue to increase due to advances in technology to increase oil recovery rates, the discovery of reserves in deepwater and remote areas, and the development of resources such as oil sands, extra-heavy crude oil, and tight oil.
The R/P, production, and proved reserves described above describe the nature of oil as a resource. Petroleum resources are underground and are subject to market fluctuations in supply and demand. Because the resource is hidden underground, it is difficult to pinpoint the exact amount of proved reserves, and accessibility can change the economics of the resource due to technological developments. Production is also volatile because it is sensitive to economic and political factors. These characteristics lead to fluctuations in R/P, which is why past and current estimates of oil depletion are similar. If we predict oil depletion in 50 years today, it is likely that in 2073 we will still have 50 years to go.
In conclusion, even if we discover all the resources on the planet, it is impossible and unnecessary to predict when we will run out of oil if we don’t have access to them or know exactly how the oil market will evolve in the future. It is also impossible to predict when we will run out of oil by extrapolating R/P.
