Here is the Wikipedia definition of proven reserves, which is the same definition I’ve read elsewhere:
Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with a high degree of confidence to be commercially recoverable from a given date forward, from known reservoirs and under current economic conditions.
Here’s a short definition, from Hard Facts – An Energy Primer provided by the Institute for Energy Research.
They are the estimated reserves that are easily accessible and recoverable with today’s technology and today’s oil prices.
Here is the crux of the issue, from Mr. Yergin:
The idea of “proved reserves” of oil isn’t just a physical concept, accounting for a fixed amount in the “storehouse.” It’s also an economic concept: how much can be recovered at prevailing prices. And it’s a technological concept, because advances in technology take resources that were not physically accessible and turn them into recoverable reserves.
Here are at least four ideas from the definition of proved reserves that thoroughly discredit the peak oil silliness:
- Rising prices make more oil feasible to recover.
- Discovery of fields today that we didn’t know about yesterday means there’s more oil.
- New technology makes it possible to recover oil that we could not have touched before.
- Mr. Yergin points out that as a new field is developed, the geologists regularly realize there is far more oil in the field than they thought.
And that ignores the demand side.
Could anything actually cause oil production to drop? Sure.
Mr. Yergin provides a few possibilities:
Wars and civil wars, social turmoil and political upheavals, regional conflict, corruption and crime, mismanagement of resources—all of these can affect not only current production but also investment and future prospects. Environmental and climate policies can alter the timing and scale of development, as can geopolitics and politics within oil-producing countries.
What’s the common thread of all the things that could disrupt oil production? Political and social leaders inside countries and across borders. Our cultural leadership collectively can drive down oil production, not because there’s no oil there, or it’s not technically possible to get it, or it’s not economical to pull out. They can limit oil production because of decisions they make. It is a choice.
Apart from political and cultural leaders choosing to shut down energy production, the amount of proven reserves depends on what technology we have today and what the prices are.
Better and more creative technology? More oil.
Higher prices? Lots more oil.
The available oil is not fixed. It is not declining.