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Energy Myths of the Left

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From confused “peak oil” theorists to confused Congressmen, it’s all but impossible to hear a discussion of US energy policy without hearing the left’s tired refrain: “The United States currently uses 25% of the world oil production but has only 2% of world reserves.” The left uses this misinformation to argue against domestic oil drilling, claiming that with only two percent of the world’s reserves, we can’t possibly have enough oil in the ground to matter.

It’s a line which reminds me of Mark Twain’s wisdom (which he attributed to Benjamin Disraeli) that “There are three kinds of lies: lies, damned lies and statistics.” Twain would be proud of these haters of fossil fuels whose “statistics” fall apart upon examination of a couple of definitions and a few pieces of data.

First, the word “reserves.” As the Congressional Research Service notes, there are several different types of reserves, classified based on their official discovery, as well as “concentration, quality, and accessibility.” The top of the “resource pyramid” is made of “proved” reserves, namely reserves of oil, natural gas, coal, or other fuel “which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.”

This is the most limiting definition of reserves, and of course it is the one which the left relies on when saying that we have “only two percent of the world’s oil reserves.” Specifically, the U.S. has 20.7 billion barrels of proved crude oil reserves as of the end 2009. (That’s actually up from 2008 numbers which by itself should be a clue how meaningless the left’s two-percent argument is.)

The problem with the use of the “proved reserves” statistic is that it ignores the many more billions of barrels of oil which we know exist and are likely to be recoverable on American land and just off our coasts. Since our government prevents exploration, there are massive deposits of oil (and other fuels) which are prevented from being measured adequately to be defined as “proved.” But that doesn’t make them less real.

A broader measure of fossil fuel deposits is UTRR, undiscovered technically recoverable resources. Marcus Koblitz, energy analyst at the American Petroleum Institute, sent me this “short” definition of the term: “UTRR are estimated by USGS and/or BOEMRE using advanced modeling techniques that apply knowledge of geologic formations and technical access capabilities to currently unexplored formations that are similar to producing formations in order to determine the amount of oil and natural gas in a specific area or basin.”

The UTRR numbers are remarkably high for the United States; indeed they demolish the left’s anti-drilling pseudo-logic. Or they would if the media’s talking heads would stop just accepting the 2% lie-statistic.

In particular, the United States’ UTRR for onshore oil is currently about 38 billion barrels, with the offshore technically recoverable resources coming in at a stunning 86 billion barrels. (Of this, just over half is in the Gulf of Mexico, a third in Alaska, and the rest off our Pacific and Atlantic coasts.) Our real but not “proved” resource of oil is thus about 125 billion barrels. Furthermore, the offshore numbers are based on a report that used data from 2003, at which time oil discovery and drilling technology were far behind what they is today, the BP disaster notwithstanding. It is likely that a new survey would conclude with a substantially higher UTRR number.

Even with the outdated offshore figures, the U.S.’s total technically recoverable oil, including current proved reserves and 10 billion barrels of natural gas liquids, is estimated by our government at 163 billion barrels, eight times the number thrown around by the left.

Yes, our total recoverable oil reserves (including proved) are at least eight times our proved reserves alone. It’s just that government keeps us from proving them.  And if that’s not enough, our UTRR for natural gas is five times our proven reserves of that resource.

Using only the proved oil reserve number of 20.8 billion barrels, the U.S. ranks 12th in the world in that category.  However, America’s UTRR of oil and natural gas combined is likely the largest in the world. (Although Saudi Arabia has more oil than we do, the majority of it is already classified as proved.) Current data for other nations is difficult to find, but a U.S. Geological Survey report from 2000 (and again, this is likely to be pessimistic from a U.S. perspective) showed the U.S. to have about one-eighth of the world’s UTRR of oil, and even a larger share of the world’s natural gas UTRR.

Thus, ranking by UTRR would put the U.S. roughly around fifth in the world for oil alone. Including all fossil fuels (oil, natural gas, and coal), the U.S. probably has the world’s largest total energy resources and is certainly in the top three. I bet you won’t hear that from a Congressman anytime soon (or at least not a Democratic Congressman). Unfortunately, you won’t hear it even on “fair and balanced” news channels, allowing an important distortion in the critical debate over our nation’s energy policy.

There are broader discussions to be had about substitution possibilities among natural gas, oil, and coal and the appropriate use of the three. What needs to be remembered, however, as we discuss an “all of the above” energy strategy for the nation is that America has abundant endowments of each. For at least a generation the U.S. will not and cannot substantially reduce its use of gasoline, diesel, and jet fuel made from oil. It’s fortunate, then, that we have so much more oil than the anti-drilling left would like us to believe since solar, wind, and biomass will not and cannot be competitive with the reliability or efficiency of fossil fuels. (Nuclear power is, but following the disaster in Japan, that debate is probably off the table for at least a couple of years.)

Now let’s address the other part of the liberal misinformation, namely the statement that America uses 25% of the world’s oil. It’s true that total consumption of energy by the U.S. hovered around 24% from 1990 through 2000. It’s been steadily declining since then as India and China’s economic growth increase their absolute and relative share of energy use. In 2007, the U.S. used about 20.5% of the world’s energy. It’s estimated to drop to 18% by 2020 as the developing world actually develops.

But the energy use figure tells you almost nothing by itself. After all, energy is used to do things and to make things. It’s the key input into economic output. Therefore, a sensible question is: “What percentage of the world’s GDP does America produce?”

The answer, according to government data, is that the U.S. share of world GDP has been in a narrow range around 27%-28% since 1990 and is forecast to drop to about 24% by 2020. We produce more of the world’s GDP than we use of the world’s energy. By comparison, in 2007, China used almost 16% of the world’s energy to produce 7.4% of the world’s GDP.  China is expected to surpass the U.S. in total energy use in about 5 years. At that time, it will produce an estimated 9% of the world’s GDP.

The U.S.’s use of energy is remarkably efficient, and particularly in comparison to what the world is about to experience from China and India in coming years. If environmentalists are worried about the dangers of carbon dioxide (aka “plant food”) now, just wait until they get their wish and the U.S. is using relatively less of the world’s energy.

The left’s mantra that the U.S. “has only two percent of the world’s oil reserves but uses a quarter of the world’s oil production” reminds me of another Mark Twain quip: “Carlyle said ‘a lie cannot live.’ It shows that he did not know how to tell them.”  The anti-capitalist left and their useful idiot-parrots in Congress and the media know how to tell the lie about America’s energy resources, and tell it often enough that it has become common, though incorrect, wisdom.

American Spectator

8 Comments on "Energy Myths of the Left"

  1. Terrance Stuart on Sat, 28th May 2011 12:20 am 

    In 1974 I attended the now famous senate sub-committee meeting on oil, in which NE senators were complaining about the purchase by Mobil Oil corporation of Montgomery Wards through their holding company. It seems that Mobil was drilling on federally owned land. John Sawhill, the “Energy Czar” was in attendance. At no time did any of these leaders ask waht type of oil reserves or deposits we had on hand? Rather their lame approach was to ask the oil company to pursue alternative energy mining, like uranium with their massive 5 billion dollar profits. The 1974 crisis was an oil refinery crisis in so far as oil has to be “cracked” using various techniques based on its viscosity and characteristics. Many of our refineries were keyed to Saudi light crude, we could not adjust fast enough to refine other oil. The cost of extracting Saudi crude at that time was 25 centa a barrel, ours cost more then and now to bring to production then does Saudi crude. The oil business is a business, they are looking for short term profits and oil regardless of where it is extracted goes to the nearest refinery and is distributed rationally to the nearest proximity end user unless politics interferes. We have tremendous oil deposits; as always reserves are deposits that are recoverable at a sliding scale based on a cost benefit analysis. It is very likely to be discovered that oil is coninuously being made in the mantle through biological and non-biological processes. In the 2nd instance it is proven that some oil has risen to the surface with markers that indicate it was non-carbon based. In the 1st instance, my theory, there is oil being produced biologically deep in the mantle and bacteria may play a role in that production. This theory is not tested nor is it on the horizon to be tested. Bottom line, politics are interfering with oil recovery and production in the USA, and interefere with the ability to build refineries which are require if the goal of oil independence ever has any chance of being fulfilled for the US.

  2. Dusko on Sat, 28th May 2011 1:23 am 

    If Mark Twain were reincarnated today I believe he would be “James Howard Kunstler.” I think the man is “A Modern Day Mark Twain.”

  3. DC on Sat, 28th May 2011 2:52 am 

    Well, the US technically may have all that ‘oil’, but most of it is very diffuse, hard or impossible to get at in any meaningful way, or just too costly. Or like the PO movement has been saying all along, LoW EROEI oil. Easy for a sane person to grasp, harder for a american BAU cheerleader.

    I like how he hauls out the america produces a lot of the worlds GDP. Maybe true in the narrow sense that GDP numbers from america are large, but we also know that GDP is a near useless measure itself. Also, merika hardly produces much for the ‘world’, most of what america makes is FOR merikans, fast food, coal plants, movies what have you. If you took weapons and primitive badly made autos out of the eqaution, america wouldnt have muvh of anything to sell to anyone.

    Besides, what does left have to do with anything anyhow. I dont consider running out of cheap oil to be a false left right thing anyhow. Of course, the US ‘right’ is commited to drill-baby-drill, so I guess they figure anyone not on board with that plan has to be, by definiton a ‘leftie, ie a subversive.

  4. Rick on Sat, 28th May 2011 3:37 am 

    This article is pure BS.

  5. VP on Sat, 28th May 2011 5:07 am 

    As I remember, Matt Simmons also stated that with only 2% of the world population we Americans use 25% of the world’s oil. He, who was an advisor to George W. Bush, was not a “leftist”. I agree with Rick: to make this into a “right” against “left” argument is not helpful.

  6. VP on Sat, 28th May 2011 5:09 am 

    Correction, with only 2% of the world’s reserves! , I should have stated. (We have about 4% of the world’s population.)

  7. SilentRunning on Sat, 28th May 2011 12:00 pm 

    This article makes me think that we could solve two problems at once by converting all the right-wing science deniers into oil by thermal depolymerization. We should be able to get at least 2 barrels out of Rush Limbaugh.

    Thermal depolymerization: The final solution to the Conservatard problem.

  8. Don S on Sat, 28th May 2011 1:03 pm 

    “Just because any particular oil field can peak does not mean that “peak oil” theory is correct except in some far-future hypothetical scenario.”

    This is one of the gems the author drops in the comments.

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