For years, activists argued for an energy transition away from fossil fuels because, they said, we were hitting “peak oil,” the point at which we can no longer produce oil because there’s little left in the ground or it’s too expensive to recover.
In 2023, the U.S. produced nearly 13 million barrels per day, more than any other nation in history. Predictions that the U.S. and the world would run out of oil go back decades, and these predictions have so far turned out to be wrong.
Tom Pyle, president of the Institute for Energy Research (IER), a free market think tank focusing on energy, told Just the News that anti-fossil fuel activists latched onto “peak oil” to push for alternatives, and with the U.S. leading the world’s production, their rhetoric has evolved.
“First, they said, ‘We don't have the resources. We're big consumers, but we don't have the energy. So we have to get off of the resource. Then it became evident and clear that that was not the case,” Pyle said.
Centuries of energy
In 2011, IER produced its first North American Energy Inventory.
“It was really for the purpose of shattering this myth of energy scarcity. To my knowledge, prior to that, nobody had taken the effort to compile, using government data …. the amount of energy that we have in North America,” Pyle said.
In that 2011 report, Pyle stated: “Thanks to new and continuing innovations in exploration and production technology, there’s every reason to believe that today’s estimates of reserves are only a fraction of what will be produced and delivered tomorrow.”
The statement turned out to be accurate. The Shale Revolution, which combined technologies in horizontal drilling and hydraulic fracturing, made available large deposits of previously unrecoverable oil throughout the U.S.
The IER’s 2024 North American Energy Inventory update shows that North America has 1.66 trillion barrels of technically recoverable resources, and at current rates of consumption, the report calculates that it would take 227 years to deplete it all.
“Technically recoverable resource” refers to oil and gas that can be produced based on current technology, and it doesn’t consider economic factors that might make it unprofitable under current technologies.
The 1.66 trillion barrels is 15% higher than the estimates from the 2011 report.
By the numbers
If all the oil in North America’s technically recoverable reserves was devoted exclusively to gasoline production, according to the report, the North American transportation sector would have enough energy for 539 years at 2023 usage rates.
There are 4.03 quadrillion cubic feet of technically recoverable natural gas reserves, which is a 47% increase in the 2011 estimate. At current rates of consumption, there’s enough gas for 130 years.
Proved reserves of coal, arguably the most abundant fossil fuel, can satisfy 485 years of demand at 2022 consumption rates, and the U.S. has 53% more proven coal reserves than Russia, the country with the next largest coal reserves.
Proved reserves are the resources that geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions.
Pyle points out that production in the U.S. has increased to record highs, rather than depleting reserves, they’ve grown.
“As production increases, we find even more of a resource,” Pyle said.
Economic impact
The high levels of energy the U.S. is producing may be what’s allowing the economy to tread water as inflationary pressures weigh it down. Doomberg, a team of analysts who publish their work on Substack, argue that economies awash in fossil fuels are likely going to grow rather than shrink.
“Energy is not an input into the economy, it is the economy,” the analysts write. “Humanity organizes its economic activities to ensure a steady growth in the extraction and exploitation of primary energy because energy is life, standards of living are defined by how much energy is available to be exploited, and all humans everywhere are perpetually seeking a higher standard of living.”
In 2008, U.S. oil production had dropped to 5 million barrels per day in 2008, the lowest level since 1947. Then, America’s oil and gas producers began to figure out how to use hydraulic fracturing to recover oil and gas from shale profitably. U.S. production by 2011 had risen to 5.67 million barrels of oil per day, and it was just under 13 million barrels per day in 2023.
North Dakota gained a lot of attention as the state experienced an oil boom that started about 2005. The state went from 35.7 million barrels of oil produced in 2005 to 429.6 million barrels in 2015.
In the 2008-2009 recession, the U.S. unemployment rate topped out at 10% in October 2009. North Dakota’s unemployment rate never got above 4% until the 2020 pandemic.
Pyle said an irony of the Shale Revolution is that it likely kept the U.S. from a much more serious economic crisis in 2008, and that helped Obama get reelected.
“The sheer amount of economic activity generated after the housing crisis is probably what saved the Obama economy. And the same can be said, I think, is that it’s giving President Biden a fighting chance. And that is the ultimate irony of the situation,” Pyle said.
Free market energy
The IER report looks only at North America, but there are shale deposits all over the world.
Pyle said the U.S. was fortunate to have the technology, the know how, and the resource base to become a leading producer. However, what’s often overlooked in making the nation the leader in energy production is a unique system of private mineral ownership. This allows private owners to get royalties from oil produced from the mineral rights they own.
“It gets people’s skin in the game,” Pyle said.
In most other countries in the world, the minerals are controlled by the government. The U.S. federal government actually owns the largest mineral estate in the county, and despite this, oil and gas production is much higher on state and private lands than on federal land.
“It's that unique system of private property ownership that allowed this to flourish here and to blossom and to create the environment that we're now enjoying,” Pyle said.
