Energy & Environment

Big lies on Big Oil

How much truth is there in President Obama’s latest favorite mantra that we consume a disproportionate share of the world’s oil, especially considering how little of the world’s reserves we have?
Recently, Obama said: “But here’s the thing about oil. We have about 2, maybe 3, percent of the world’s proven oil reserves. We use 25 percent of the world’s oil. So think about it. Even if we doubled the amount of oil that we produce, we’d still be short by a factor of five.”
First, let’s look at the raw numbers and then examine Obama’s misleading framing of the issue. This is important because he uses these statistics to justify his reckless expenditure of federal funds to pursue alternative “green” energy sources, such as the disgraceful and scandalous Solyndra project.
The United States has some 20 billion barrels of oil in reserves. By “reserves” we’re talking “proven” reserves, meaning those that are certain to be recoverable in future years from known reservoirs under existing economic and operating conditions. That is, we have 20 billion barrels of oil that is recoverable at current prices and under lands currently available for development.
That definition excludes many oil reserves that Obama has declared off-limits. According to the Institute for Energy Research, we have more than 1.4 trillion barrels of oil that is technically recoverable in the United States with existing technology. The largest deposits are located offshore, in portions of Alaska and in shale deposits in the Rocky Mountain states. So the United States has more recoverable oil than the rest of the non-North American world combined. The Heritage Foundation says this is enough to fuel every passenger car in the nation for 430 years. Therefore, “it is merely semantics — not a scientific assessment of what America has the capacity to produce — that allows critics to claim repeatedly that America is running out of energy.”
When you add in recoverable resources from Canada and Mexico, the total recoverable oil in North America exceeds 1.7 trillion barrels. “To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves.”
Another critical point: Even using the restrictive definition of reserves Obama is using, the 20-billion barrel figure is misleading, because Obama is clearly implying it is a fixed, or static, number — as though with every barrel of oil we consume, we are pushing the oil energy doomsday clock another second toward the apocalypse. But in fact, that number is not static, but constantly in flux.
The institute tells us that in 1980, for example, the United States had 30 billion barrels of oil in reserves. But over the next 30 years — through 2010 — we produced 77 billion barrels. Now, how can it be that we produced almost 2 1/2 times more oil than we had available, consumed a great deal and still ended up with plenty left over?
Obama’s own Energy Information Administration is predicting a steady increase in reserves on land currently available for exploration. Heritage’s David Kreutzer says, “It projects that improvements in technology and the economics of extraction, production, and sales actually will lead to a 23.7 percent increase in U.S. reserves — even after extracting billions of barrels of oil in the interim.”
There’s more. Obama’s formulation conflates two different measures. True, we might have only between 2 and 3 percent of the world’s recoverable reserves — as narrowly and misleadingly defined — but we don’t consume 25 percent of the world’s oil reserves, which is what Obama wants you to believe. We consume closer to 22 percent — but it’s not of reserves; it’s of the world’s oil production. But, as Heritage notes, “we consume about 22 percent of the world’s production of everything,” not just oil. Consumption is determined by income, not by available resources — and for those who are always knocking the United States, we also produce about 22 percent of the world’s total output of all goods and services.
Admittedly, we don’t produce 22 percent of the world’s total oil output; it’s more like 6 to 10 percent. But experts say this number will increase even if we don’t access the other abundant sources that Obama has declared off-limits.
For overblown and in some cases completely fabricated environmental concerns, Obama is preventing us from greatly expanding the pie of our oil reserves, from offshore drilling to Alaska to Keystone to fracking, and at the same time throwing government money down the ratholes of projects that aren’t sound and economically prudent enough to warrant substantial private investment dollars.
He’s told us he wants to bankrupt the coal industry, get us out of gas-driven cars and into electrical clunkers and onto bike paths, and increase the price of gas.
Why don’t we believe him?

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  • reddarin

    “IER is funded by the oil industry.  What do you expec”

    Funny how this standard never seems to be applied to the liberal organizations supporting the green pipe dream.

    “as long as we realize they don’t hold the interests of the American People as their primary goal”

    But somehow the flat-earther no-growth crowd has America’s best interests at heart. Yeah.

    “as their primary goal regardless of the damage the pursuit of those interests might do to the American People”

    That is the perfect description of the green on the outside red on the inside flat earth no growth crowd that you so closely identify with. Hell we’ve experienced 3+ years of it with the Obama administration.

  • Joe Shmoe

    Dear Joe Hanko -

    I gave no date for the timing of the coming energy and natural resource collapse.  It is not far away though.  The video I mentioned will give you a sense of how close to the brink we are.

    The video “There’s No Tomorrow”, by the Post Carbon Institute, can be found on YouTube.  However you can also find it at the website of the film’s creators – Incubatepictures dot-com.  At that website you can find page after page of citations and links to EVERY BIT OF DATA USED in the making of the film.  It is completely documented, with FACTS.  Whenever there was a range of values, or disputed numbers, they used the most conservative ones so as to not inflate the findings.  So, please do not be so hasty to accuse me of making baseless “green fairy tales”.  The facts are very solid.

    As for my credentials, well any thinking person can understand the video and the data if they invest the effort.  However, I do have a degree in environmental science, another degree in landscape architecture, and a degree in environmental and community planning.  I have several decades of scientific studies and analysis experience.  I have studied with some of the world’s foremost experts on Energy Return On Investment (EROI); and in fact one such expert was my graduate adviser.

    I can lead you to knowledge Joe Hanko, but I can’t make you drink it. 
    Ignorance is bliss until it hits the fan … 

  • restoreliberty

     then a right to abortion doesn’t exist, a right to privacy doesn’t exist, a right to an education doesn’t exist, a right to gay marriage doesn’t exist

    you sir are fool and not even a useful one

  • restoreliberty

     Post Carbon Institute…..well I’m sure they have no bias.