Abundant Reserves Show Petroleum Age Is Just Beginning

Published October 1, 2003

It is difficult to imagine how our grandparents and great-grandparents lived at the end of the nineteenth century. The United States was still largely a rural society, and the amenities we take for granted today were unknown then.

Most people lived on farms. Few Americans had running water, hot water, bath tubs, or flush toilets. Central heating, electricity, and telephones were rare. There were no antibiotics. Infant mortality was high, and life expectancy was 30 years lower than it is today. For most people, educational opportunities were very limited. In 1890, only 5 percent of the eligible population attended high school.

In the year 1900, there were only about 8,000 automobiles in the entire country. Horseless carriages, like yachts, were a toy for the rich to enjoy. People knew there would never be enough gasoline to power a nation of automobiles because the output of the Pennsylvanian oil fields had been declining for years.

Spindletop Well Transforms U.S.

The seminal event that transformed the United States into an industrial and technological powerhouse occurred on the morning of January 10, 1901, near Beaumont, Texas. A wildcat oil well on a location named Spindletop erupted into a geyser 100 feet high. It was the greatest oil well ever seen in the United States.

Over the next year, production from the Spindletop well equaled the production of 37,000 typical oil wells in the eastern U.S. Overnight, the price of oil dropped to 3 cents a barrel, recovering to 83 cents a barrel two-and-a-half years later. The cheap energy provided by abundant oil allowed the U.S. to transform itself from a rural, agrarian country into an urban, industrialized nation. Along the way, the prosperity of our society increased manyfold.

Petroleum continues to be the lifeblood of our civilization. In the U.S., our entire way of life depends on the energy provided by the oil industry. Oil and natural gas are by far the most important energy sources for the world.

Technology Prevails

And the age of petroleum has only just begun. For more than 80 years, geologists’ estimates of the world’s endowment of oil have risen faster than developers can pump it out of the ground. In 1920, the U.S. Geological Survey estimated just 20 billion barrels of oil remained in the world. By the year 2000, the estimate had grown to 3,000 billion barrels.

Every year, technological advances make it possible to draw upon petroleum resources whose extraction was once unthinkable. We can now drill wells up to 30,000 feet deep. The amount of oil that can be recovered from a single well has been enhanced by a technology that allows multiple horizontal shafts to be branched off from one vertical borehole. The ability to drill offshore in water depths of up to 9,000 feet has opened up the vast petroleum resources of the world’s submerged continental margins.

The world also contains immense amounts of unconventional oil resources that we have not yet begun to tap. Tar sands found in Canada and South America contain 600 billion barrels of oil, enough to supply the U.S. with 84 years of oil at the current consumption rate. Worldwide, the amount of oil that can be extracted from oil shales could be as much as 14,000 billion barrels–enough to supply the world for 500 years.

Oil is cheap, abundant, and clean. Dramatic improvements in our quality of life over the past two centuries can be traced back to the energy provided by the petroleum industry. Without that energy, and the technological advances that make its recovery possible, life in the U.S. would be short, dark, and impoverished.

David Deming is an adjunct scholar with the National Center for Policy Analysis and associate professor of geology and geophysics at the University of Oklahoma. Copyright 2003 David Deming; reprinted with permission.