America’s independence can be viewed in a new light this July 4th with data from Monday’s Rystad Energy report. The recent global study reveals America has surpassed Russia by 8 billion barrels of untapped oil and now leads the pack in global oil reserves.
After a three-year survey of 60,000 oil production fields worldwide, the Norwegian oil and gas consulting firm, Rystad Energy, estimates a total of 264 billion barrels of economically recoverable American oil from proved reserves in existing fields, probable reserves in existing fields, discoveries and undiscovered field projections. Second in line globally are Russia’s estimated 256 billion barrels and Saudi Arabia’s estimated 212 billion barrels.
U.S. Fastest Growing Oil Producer Worldwide
America has become the fastest growing oil producer worldwide, exceeding its 2008 oil production by 80% in 2015. Last month, the United Stated Energy Information Administration (EIA) reported the nation averaged nearly 8.7 billion barrels of oil produced per day. Texas is sitting on over 50% of untapped U.S. oil in unconventional shale oil, Rystad data shows. Texas’ vast shale oil plays, including Barnett and Eagle Ford, carry over 60 billion barrels, nearly 23% of America’s untapped shale oil.
Globally, Rystad estimates total oil reserves at nearly 2.1 trillion barrels, nearly twice the total 1.3 trillion barrels of oil ever produced worldwide up to 2015 and 70 times the current production rate of 30 billion barrels of crude oil per year. Offshore accounts for 33% of the total global recoverable oil reserves, while unconventional oil recovery accounts for 30% of the total. Behind Saudi Arabia, the world’s top oil producers include Canada (167 billion), Iran (143 billion) and Brazil (120 billion).
Advanced Drilling Techniques Propelled U.S. into First Place
Innovative drilling techniques like horizontal drilling, fracking and hydraulic fracturing are largely responsible for America’s first-place standing. In 2000, 2% of U.S. crude oil came from fracking. In 2014, the EIA estimated American proven crude oil and natural gas reserves had reached 39.9 billion barrels, finally exceeding the record of 39 billion barrels set in 1972, and by 2015, fracking was producing 51% of American crude oil.
The Oslo, Norway consulting firm argues its estimates provide a more accurate representation of global oil reserves than other, less conservative metrics. The Rystad study applied “an established standard approach for estimating reserves to all fields in all countries, so reserves can be compared apple to apple across the world, both for OPEC and non-OPEC countries,” Rystad Energy’s Head of Analysis, Per Magnus Nysveen explains.
For example, Nysveen mentions the figures reported by the BP Statistical Review of World Energy, which estimate U.S. oil reserves at 55 billion barrels and Venezuela’s at 301 billion barrels. “Other public sources of global oil reserves are based on official reporting from national authorities, reporting reserves based on a diverse and opaque set of standards,” Nysveen explains. “Some OPEC countries like Venezuela report official reserves apparently including yet undiscovered oil, while others like China and Brazil officially report conservative estimates and only for existing fields.”
Undiscovered Oil Fields: Vast by Estimation
If the U.S. reported undiscovered oil, America’s Green River formation alone, spanning the Rocky Mountain regions of Utah, Colorado and Wyoming, is estimated to be sitting on up to 1.5 trillion barrels of recoverable oil shale.
Though the vast estimations of our global undiscovered oil fields may appear to keep the world afloat for decades to come, global oil demand is increasing every year. “This data confirms that there is a relatively limited amount of recoverable oil left on the planet,” Nysveen said. “With the global car-park possibly doubling from 1 billion to 2 billion cars over the next 30 years, it becomes very clear that oil alone cannot satisfy the growing need for individual transport.”
The very drilling techniques that boosted oil prices to over $100 per barrel in mid-2014, created a surplus that pulled oil prices to under $30 this year and put a halt on many areas of U.S. production. It remains to be seen whether Rystad’s report on America’s first-place status in global oil reserves will sway pricing. Numbers suggest the U.S. oil export will increase as global surplus drops and prices recover.