There is no disputing that the industrial revolution and current economies of first world countries run off of fossil fuels such as oil. With rising prices, the question of oil supply is an important one.
How important is oil in our world? Well, imagine if all the oil in the world simply disappeared tomorrow. What would be the impact? It would be huge. All the ships transporting goods around the world would be unable to do so. The freight trucking system would grind to a halt. You would be unable to drive to the grocery store. Even if you walked there, you would find little to buy since the trucks delivering it would no longer run. Enjoy auto racing? Not anymore.
All of these questions and scenarios raise all kinds of questions about our energy needs. As countries like India and China grow like mad, there energy needs grow as well. Throw in the already thirsty needs of the United States, Europe and other areas, and you have a major demand. A significant amount of this energy comes in the form of oil.
So, how much oil is left? The figures are somewhat vague because it is generally agreed that we haven’t found all of the available oil. We will find more, but it is going to be harder to find and more expensive to get at it. Regardless, the current argument is tailored around when we will start to see oil reserves start to decrease. You might be shocked to learn many are pointing to…2007. This date comes from none other than Goldman Sachs, a prominent and respected company. It is based on the fact that 2005 represented a watershed year in exploration. Specifically, the year saw a massive drop off in the announcement of new oil production projects and locations. While the exact date is obviously unknown, it is clear that it is imminent.
Turning to hard numbers, it is estimated that there are about 1.27 million barrels of oil in current reserves across the world. While this may sound like a lot, it represents about 44 years of oil supply at current usage levels. The catch with this estimate, however, is the fact that the growth of India and China with their huge populations is going to increase demand substantially. Since nobody knows how fast the demand of emerging markets will be, it is difficult to determine the real number of years left. Guesstimates range from as low as 25 years to as high as 40. Yet another caveat to this figure, however, is future oil discoveries. While we will find more, nobody believes it will be a substantial amount.
