The status of conventional world oil reserves—Hype or cause for concern?
Nick A. Owen
, Oliver R. Inderwildi, David A. King
Low Carbon Mobility Centre, Smith School of Enterprise and the Environment, University of Oxford, Oxford, United Kingdom
Received 13 January 2010
Accepted 10 February 2010
Available online 12 March 2010
The status of world oil reserves is a contentious issue, polarised between advocates of peak oil who
believe production will soon decline, and major oil companies that say there is enough oil to last for
In reality, much of the disagreement can be resolved through clear deﬁnition of the grade, type, and
reporting framework used to estimate oil reserve volumes. While there is certainly vast amounts of
fossil fuel resources left in the ground, the volume of oil that can be commercially exploited at prices
the global economy has become accustomed to is limited and will soon decline. The result is that oil
may soon shift from a demand-led market to a supply constrained market.
The capacity to meet the services provided by future liquid fuel demand is contingent upon the
rapid and immediate diversiﬁcation of the liquid fuel mix, the transition to alternative energy carriers
where appropriate, and demand side measures such as behavioural change and adaptation. The
successful transition to a poly-fuel economy will also be judged on the adequate mitigation of
environmental and social costs.
& 2010 Elsevier Ltd. All rights reserved.
Fossil fuels have been at the centre of growth and trade since
industrialisation re-organised economies for the purpose of
manufacturing goods (O’Sullivan and Sheffrin, 2003). In many
applications, energy dense crude oil-derived fuels displaced coal
and have long since dominated as a transport fuel. In recent years,
however, concerns have grown over the environmental conse-
quences of burning large volumes of oil, and whether reserves
have the capacity to service growing demand (Alekkett, 2007;
Campbell and Laherrere, 1998; Laherre
re, 2009a; Robelius, 2007;
Sperling and Gordon, 2007; USGAO, 2007).
Here we review the status of conventional crude oil reserves.
As crude oil is a ﬁnite non-renewable resource, by deﬁnition it
cannot continue to meet ongoing demand. Of particular interest is
the point at which oil production becomes limited by the capacity
of extraction technology, causing supply and demand curves to
diverge. To determine when this may occur requires access to a
number of contentious and inherently uncertain data sets.
Although it is not the intention of this report to discuss
motivations for reserve misreporting, it is necessary to investigate
ambiguities and sources of error that are broadly acknowledged
but not taken into account in public data
due to the politically
sensitive nature of reserve information.
It was found that the failure to report according to guidelines
set out by the Society of Petroleum Engineers (SPE) and the World
Petroleum Council (WPC) together with intentional false report-
ing, could go a long way to explaining the polarised views on the
status of conventional oil reserves.
Evidence suggests that conventional oil production has a
limited capacity to meet growing demand, and most additional
demand will have to be met by unconventional sources (IEA,
2008). Unconventional resources are abundant and may meet
supply deﬁcits, although the capacity for substitution is also
contingent upon the effective mitigation of environmental, social,
and technical challenges associated with the production of
ARTICLE IN PRESS
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Select terms and abbreviations: API, American petroleum institute gravity
(141.5/speciﬁc gravity—131.5); BPSR, BP statistical review; Conventional oil, Oil
that is less dense than water (above 101 API); Gb, giga barrel (one billion barrels);
Giant oil ﬁeld, contains 0.5 Gb of 2P conventional oil reserves; IEA, international
energy outlook; Information agencies, organisations that republish data from
reporting agencies (some times with small amendments); NGL, natural gas liquids,
the liquid or liqueﬁed hydrocarbons produced in the manufacture, puriﬁcation and
stabilisation of natural gas; OGJ, oil and gas journal; OPEC, organisation of the
petroleum exporting countries; Reporting agencies, organisations that gather oil
reserve data from producers; Reserves, commercially exploitable oil that is in-situ;
Super-giant oil ﬁeld, contains 5 Gb of 2P conventional oil reserves; Unconventional
oil, oil that is below 101 API; Ultimate recoverable reserves (URR), The total
volume of reserves expected to be recovered, past and present; WEO 2008, world
energy outlook 2008; WO, world oil; 1P, ‘proven reserves+P90’; 2P, ‘proven+
probable reserves’=P50; 3P, ‘proven+probable+possible’=P10
E-mail address: firstname.lastname@example.org (N.A. Owen).
Includes data presented in the BP Statistical Review (BPSR), Energy
Information Administration (EIA), Oil and Gas Journal (OGJ), World Oil (WO),
and the International Energy Agency (IEA).
Energy Policy 38 (2010) 4743–4749