Two times more oil exists than producers report

Peak, shmeak. Fact is, says Richard Pike, a former oil industry man and now CEO at the UK’s Royal Society of Chemistry there’s plenty more where the last century’s oil came from. Indeed as oil grows more expensive, the volume of reserves that can be economically exploited gets bigger too. At $50 per barrel, for example, Canada’s tar sands are too costly to cook into usable fuel. Not so now. This is no surprise of course to folks in the energy industry. Reserves, for example, are typically reported only if they are considered “economically recoverable.” So prospectors have long known about far flung locations and exotic types of oil that exist, but that cannot be affordably recovered. The problem with this sort of data, though, is that the existence of such “extreme” reserves obscures far cheaper steps that should be taken before they’re tapped: higher efficiency in vehicles, power plants, and buildings should be the first and main focus of all energy strategy in the near- to mid-term.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.