Today there is a very good opinion article in the Wall Street Journal.Â The article is titled The World has Plenty of OilÂ and was written by Mr. Nansen Saleri, president and CEO of Quantum Resevoir Impact in Houston.Â Mr. Saleri essentially says that we are nowhere near running out of oil and the ongoing concerns that many have that leads to higher oil prices are without base.Â I looked at some of his numbers and did some of my own calculations.Â Here is what I found out:
Some assumptions need to be made for this little estimate.Â First, assume that oil consumption – currently at 86 million barrels a day – will grow consistently at 2% annually, which is at the higher end of the estimates for growth.Â Second, assume that due to improving technologies we are able to extract 0.5% more oil per year.Â Clearly with these figures an end is a mathematical certainty.Â
Given the above assumptions, it may surprise some that the depletion of oil will not come until 2098.Â Granted this is only 90 years away, but at the current rate of technological growth wouldn’t it make sense that we will find a new source of energy to replace oil?Â Or perhaps even slow the growth in consumption?Â Let’s look more into that.
In a second estimate, let’s assume that oil consumption grows at 2% for the next 20 years then slows to 1% for 20 years, then to 0.5% indefinitely.Â Keeping extraction rates the same, the depletion of oil does not come until 2144.
Going one step even further, what if oil consumption grows by 2% for 10 years, 1% for 20 years, and then by 0.5% to a peakÂ in 2050 and then declines by 0.5% annually indefinitely?Â In this situation, we never run out of oil.
So out of the three examples, which is the mostly likely situation we can expect to see?Â I think the first example is the absolute worst case scenario the world would see, whereas the third example is probably not going to happen either.Â However, I would expect reality to be somewhere between the second and third examples.Â As a result, I would estimate that the earliest the world would run out of oil would be 2144.Â
That brings up another question though.Â Where will we be in 136 years?Â Perhaps we’ll have access to some of the fuels that may exist on Mars.Â After all, NASA plans on landing there by 2030.Â That would leave 114 years to find at least some oil on the planet.