There’s a lot more oil in the world than most people realize. But today, most of the easily drillable oil is beneath a handful of less-than-stable countries.
In previous issues of Trends, we’ve explained that ultra-deep offshore drilling, coupled with lateral drilling and better extraction from older wells, will enable us to tap into a lot more oil than previously recognized. And, in the longer-term, North American oil shale, seafloor methane hydrate, and a renaissance in the use of nuclear power will ensure the availability of plentiful energy for hundreds of years to come.
Over time, this will enable us to cut our enormous subsidies to hostile governments in places like Iran and Venezuela. Unfortunately, some of these techniques won’t be widespread for a decade or more, while others are still too costly, even at $60 per barrel. But fortunately, there are already proven, cost-effective technologies that can fill a big part of the short-term gap.
According to a report from Research and Markets,1 the most promising solution for North America is to extract oil from the oil sands of Alberta, Canada. Oil sands consist of clay, sand, water, and bitumen, a form of hydrocarbon that can be processed into oil. The sands are mined, not drilled, but until now, it has been impractical in economic terms to do it.
In 2006, the Alberta sands were already yielding 1.2 million barrels a day, and that output is expected to grow by another 2.4 million barrels a day during the next 10 years.2 The longer term potential is even bigger; oil sands account for 66 percent of the world’s total oil reserves, with Canadian sands holding 1.7 trillion barrels of oil — and possibly more. That means the estimated Canadian oil sands reserves outstrip the 300 billion barrels of oil reserves in Saudi Arabia.
Moreover, the United States has reserves of oil sands in Utah, Kentucky, Kansas, Missouri, Oklahoma, California, and New Mexico. As the Canadian effort proves fruitful, we may see an oil sands boom in the U.S., too.
If additional oil found in oil shale and other forms that can’t yet be economically recovered by present-day technology are counted, the total reserves in Alberta alone amount to as much as 2.5 trillion barrels. The U.S. has similar deposits in its Western states.
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