Earth may have more oil than anyone thought

The Energy Information Administration raises its estimates of shale oil and gas, which are both costly to extract.

By Jason Notte Jun 11, 2013 6:57AM
Image: Oil drums (© Kevin Phillips/Digital Vision/age fotostock)There could be a lot more oil and gas out there than we thought. But it's going to cost a whole lot to extract it.

The Department of Energy's Energy Information Administration has upgraded its estimates of global oil reserves by 11% after scouring 41 countries and finding a lot more "technically recoverable" shale oil and shale gas than it did the last time it filed a similar report, in 2011.


Since then, the EIA's shale gas estimates alone have jumped by 10% and its estimate of gas reserves has soared by 47%. The U.S., China and Argentina are largely responsible for the upticks in shale oil and gas numbers, while Russia's shale oil stockpile and Algeria's shale gas resources also place them among the EIA's top four potential producers in each category.


Note the use of "potential" there. As we noted in November -- just after Superstorm Sandy slammed into the East Coast, wrecked refineries and caused a supply shortage that led to gasoline rationing and military assistance -- the idea of peak oil remains far more frightening than it appears.


While the EIA's numbers are promising, they'll ward off peak oil only if extraction technology catches up to the potential of that latent supply. M. King Hubbert created the first peak oil model in 1956 and predicted U.S. oil production would peak between 1965 and 1971. Globally, he believed oil production would peak in 1995, which clearly didn't happen.


Even if oil hasn't peaked, it's starting to feel as if it has. Exxon Mobil (XOM) said in 2005 that "all the easy oil and gas in the world has pretty much been found." Meanwhile, former Shell chairman Lord Ron Oxburgh warned in 2008 that "any new or unconventional oil is going to be expensive."


The Bakken Shale Formation sitting beneath North Dakota, Montana and Canada's Saskatchewan and Manitoba provinces, for example, has been estimated to contain anywhere from 4 billion to 150 billion barrels of oil, though current extraction methods provide access to less than 10% of it. Oil sands just beneath Edmonton in Canada's Alberta province hold an estimated 175 billion barrels, making it the third-largest oil reserve in the world. But it's going to spend much of the near future untapped.


The problem is that even extraction methods like fracking are in their crudest stages and don't come close to being adequate for most oil sand extraction. The oil in those shales isn't easy to separate from the sand and water surrounding it and leaves huge waste pools in its wake. That mess costs money, and it's only going to get messier as those oil numbers surge.


More on moneyNOW

90Comments
Jun 11, 2013 12:27PM
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What a party - only in America. We can thru our own skills, talents and abilities solve our energy problems. We also can develop the environment technology we need in this energy development. Let us get it done, this is what America dose best.
Jun 11, 2013 12:15PM
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This news should send the global warming tree humping loonies into a panic.
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Some of our neighboring planet's moons have naturally occurring Methane.  There are oceans and clouds of it.  The theory that plants produced the oil and gas on Earth mystifies me.   I wonder if our planet isn't making this gas and oil every day and it may be unlimited??
Jun 11, 2013 4:13PM
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I notice the author left out the Green River Oil Formation in the western US which contains up to 3 trillion barrels of oil or more than the rest of the world combined.
Jun 11, 2013 11:39AM
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Good news everyone!

 

This means we'll be able to purchase gasoline north of $4.00 a gallon for three decades longer than originally anticipated!...

Jun 11, 2013 9:57AM
Jun 11, 2013 11:02AM
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If we could map the entire planet, from it's core to the surface and detect all fuel sources, we probably have enough fossil fuels for many, many generations, and maybe even forever, that is not really the important point here.  The question is how much does it cost to get a barrel out of the ground.  About 100 years ago, the ratio was something like for 1 dollar of investment, you got 100 dollars of energy.  Today, it is a lot less than that and it's getting worse.  If we try to get oil that's really deep or in difficult locations on the planet, it will probably cost too much to bother getting it out of the ground.
Jun 11, 2013 9:58AM
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The cheap, easily recoverable oil has already peaked. The vast majority of easily recoverable oil which is left is controlled by OPEC and their state owned oil companies.
Jun 12, 2013 3:08AM
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Hubbert"s prediction's were accurate. The deviation's are based on: oil producing production reductions at a political level and to a small part the technological revolutions around new oil recovery techniques.  "Conventional"  Peak US oil occurred in the 1971 timeframe and peak world oil production occurred in the 1999 -2004 timeframe. The shale oil fields discussed in this article and other new extraction techniques were not part of Hubbert's estimates and today are a large delta in his estimates. The new techniques are only viable post 2006 prices. These estimates changes are not revolutionary in themselves they are small changes in the estimates of the downward slope. A 10% change isn't going to change the slope's aspect (down), but it may delay the day's of worldwide starvation a few years... The new techniques might put off those dark day's for another generation...

Jun 11, 2013 9:34AM
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Peak Oil is the End of Cheap Oil. Clearly that is over. There have been various reports over the years that some countries have lied about their true Reserves. That actual Reserves are far lower than counted. Careful on predictions of actual Reserves, it's likely Bogus.
Jun 12, 2013 9:14AM
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PBS, I would expect that even a low information voter such as yourself is aware of the issues of water. Even Fox.com has a report titled "Farmers and Frackers compete for Water in the Western US". Even they admited that a new player has been added to the mix as Frackers are now bidding at auction for WATER!  As the Fracking boom increases, so will their mix at auction increase.

Low information voters aren't aware that there is a Global Crisis concerning Groundwater supplies shrinking due to overuse. Low information voters aren't aware that 50% of folks in the United States get their drinking water from groundwater and that it's biggest use is irrigation.  Almost 2 Billion humans across the Globe rely on underground aquifers and most are being rapidly depleted. It would take thousands of years to refill those aquifers once depleted. So as we use them faster than Rainfall replenish them, It's no wonder that many say that the next War will be fought over WATER, not Crude Oil.

Jun 11, 2013 6:15PM
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The author is exactly right in suggesting that the issue is not how much oil can extract, but how much oil we can AFFORD to extract. At $1,000 a barrel I'm sure oil companies could find many way to extract oil, but who would be able to afford to drive at that price?
Jun 11, 2013 11:36AM
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Peak oil = peak politics.  The notion of peak oil is a political device.  It seemed to be true in the 1970s onward after the windfall profits tax and other regulations, taxes and environmental conditions almost shut down oil production in the US.  Now the big oil booms mentioned above are occuring in the 3 states that have the least amount of federally controlled lands.  Thats no coincidence. If the government backed off its war on oil other areas would boom too. 
Jun 11, 2013 3:11PM
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They have also found a big oil deposit in Austrailia  It's suppose to have more than Saudi Arabia and Iran together. This is in the middle south part of the country. One of the hottest places there. People there live underground in caves because of the heat.
Jun 11, 2013 10:18PM
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In other words, nobody is really sure how much oil is out there.
Jun 12, 2013 6:35AM
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Gee, the "experts" may not have been right. Who could have imagined that?
Jun 11, 2013 7:54PM
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The Fracking Boom is only one because of the High Price of Crude. Sure it helps those locally but it sure hasn't helped the rest of us. Regardless of any rise in supply while demand softens, prices continue to rise. We are getting Darn Close to a War on who Gets Clean Water Supplies as we waste more while using more. The Fracking Boom won't help increase the supply of clean drinking water. Most folks won't even drink the crap coming out of their facets now, that will only get worse. We can live without crude, we can't live without clean Drinking Water. Keep that in mind in this rush to DRILL, Frack or whater without thinking about the potential longer term issues. Just as Greed will implode the Stock Markets, the same might be stated for the Environment. Is there another planet folks have in mind to use if we screw this one UP? Exactly.
Jun 12, 2013 9:17AM
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The Dept. of Energy can find oil by flying in a plane and scanning .. then the Dept. of Energy developed deep water drilling now... private oil companies get all the benefits.. about time to nationalize oil and gas to pay for HEALTH CARE

 

Jun 15, 2013 4:36PM
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I'm concerned that extracting oil is behind all the earthquakes that are increasing in severity and frequency.  Why is it never discussed?  You remove things under the earth, the earth shifts, makes sense!
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