Oil is vital for the functioning of industrialized nations. It powers our cars, heats our homes, and plays an important role in the production of synthetic materials and textiles. According to a 2012 report from UBS, there are 1.38 trillion barrels left in global oil reserves, which should last another 46.2 years.
But where are these reserves located and just how much oil is available in the United States?
The United States currently ranks 12th in the world for largest oil reserves, with 31 billion barrels that are consumed at a rate of 18 million barrels, daily. At this rate, US reserves will last another 11.3 years.
The 10 most oil rich states are Louisiana, Colorado, Utah, Wyoming, New Mexico, Oklahoma, North Dakota, California, Alaska, and Texas, with Texas having the most oil reserves.
In Texas, there are currently 27 oil refineries and as of 2011, 7,014 million barrels of oil reserves. In 2010 alone, 32 new oil fields were discovered in the Lone Star state.
Alaska ranks second in terms of oil reserves with nearly 3,816 million barrels of oil reserves in 2011. About 11.9 percent of the state's workers are employed by the oil and gas extraction industry.
California is number 3 with 3,005 million barrels of proved oil reserves in 2011 and 16 oil refineries. In 2013, it was discovered that Monterrey shale oil deposits would soon be accessible in Southern California, which could create between 512,000 to 2.8 million jobs in the state. If extraction does occur, California could soon surpass Texas in oil production.
In other parts of the world, there are large oil reserves as well. Saudi Arabia currently ranks number 1, with 265 billion barrels of oil or 19.1 percent of the world supply, which would last the country another 72.4 years. Venezuela comes in at a close second with 211 billion barrels of oil or, 15.3 percent of the world's supply, which according to their lower consumption rate, would last the country another 234.1 years.
Iran currently has 137 billion barrels of oil (9.9 percent of the world supply) and at their rate of usage, is expected to last another 88.4 years.
Iraq is number 4 in the world for largest oil reserves, with 115 billion barrels left and roughly 8.3 percent of the world supply. Using 2.7 million barrels daily, their supply should last another 128.1 years.
Finally, Kuwait ranks 5th in the world for largest oil reserves; containing 102 billion barrels or roughly, 7.3 percent of the world supply. With a consumption rate of 2.75 million barrels daily, their reserves should last another 110.9 years.
What is important to think about first and foremost is the quality of these different oils from different parts of the world. The countries with the largest oil reserves on a global level are also largely part of the OPEC Basket classification of Crude Oil, which known for higher sulfur content and heavier viscosity- attributes which come at a lesser value compared to Brent Blend and WTI from Europe and North America.
If our oil reserves on a global level are to last and be utilized, however, more efficiency in oil extraction and refinement of lesser oil types like that of OPEC Basket oil might be something worthwhile to pursue. If the United States current oil reserves are only set to last another 11.3 years, this could be very problematic for its economy and thus action must be taken.
Another issue at play here is the increased demand for oil in recent years from developing nations who are not currently members of the OECD (Organization for Economic Cooperation and Development.) China, for instance, has experienced an incredible surge in economic growth over the last decade. For transportation alone, China will double its demand for oil within the next 15 years as the number of Chinese citizens driving motor vehicles is quintupled. By 2020, China may be importing up to 63 percent of its oil. But where will that oil come from?
China has been on the offensive with developing relationships with oil rich territories like Sudan, Angola, and Gabon. While these areas are politically volatile, China has been using diplomacy, loans, and other measures to cultivate relationships with these oil suppliers, protecting future interests.
As mentioned previously, the greatest consumer of oil in the world is the United States. To protect its interests, the US began stockpiling oil in 1975 in case of emergency. The oil is currently stored in large, underground caverns in Louisiana and Texas. In 1985, the reserves were enough to last 118 days. However, due to increase in demand and consistent disruptions in global supplies, the reserve as of 2012, would only last 80 days.
The reserves in the United States are only put into effect when absolutely necessary because being the world’s greatest oil consumer; markets would be greatly affected if the U.S. was to rely solely only its reserve supply, even if for a short time.
While Saudi Arabia has the largest oil reserves in the world, its value has been corroded by its inability in recent years to keep up with demand in terms of production and refinement. In 2005, a $50 billion investment was made to bring production up to speed over the course of four years, to keep up with rising oil demand. While countries in the Middle East are rich with raw materials, they often lack the infrastructure to make the most of these raw materials through advanced production techniques.
As our need for oil grows, alternative technologies for obtaining it are being developed. One of the most promising North American locations is the Canadian Tar Sands in Alberta. The sands contain billions of barrels of oil.