The President and environmentalists are fond of the factually incorrect statement that the U.S. maintains only 2% of ‘proven or known’ oil reserves. ‘Proven reserves’ carries a very tight definition; ‘proven, confirmed and economically recoverable to a 90% certainty’. There are other categories of reserves that the President ignores. The actual fact is that estimated reserves are at least eight times higher than the President contends. It is also logically demonstrable that we have not even come close to identifying the full scope of potential energy reserves based on the rapid advance of technologies applied to production and identification of reserves.
The President further contends that the 2% reserve equals 2% of global production; also in error. The U.S. is responsible for 9% of global production. That differential is due to production efficiency and the relatively shorter time frame for getting it out of the ground and into usable forms. It also related to the immediately available markets in the U.S.
A favorite talking point is to connect the 2% reserves and the 2% production with yet another ‘hanging fact’. It is true that we consume 20% – 21% of global energy production. This representation is supposed to make us curl up in a guilty ball and self flagellate until we come to our consumption senses.
The appropriate comparison is what percentage of Global GDP does 20% consumption support? The answer is, based on the CIA World Fact Book, 24%. Economically speaking we’re relatively efficient when consumption is compared to GDP. China for instance represents 11% of global GDP and consumes 11% of available energy resources. Japan, historically, based on their reliance on nuclear power represents 10% of GDP but only 5% of energy consumption.
So put down the whips, chains and horse hair shirts. Connecting the factual dots is much more productive.