World has 70 years' worth of oil left: study

Russia, Saudis still have the advantage

Canada faces NAFTA competition for oil markets The Canadian oil industry in recent years has faced new competition from the very country where most of its oil is sent — the United States. A new study on oil reserves shows just how serious that competitive threat has become. According to data from oil and gas consultancy Rystad Energy, the U.S. has surpassed Saudi Arabia and Russia to have the world’s largest oil reserves.

The U.S. has 264 billion barrels of oil, compared to Russia’s 256 billion barrels and Saudi Arabia’s 212 billion. “We have done this benchmarking every year, and this is the first year we’ve seen that the U.S. is above Saudi Arabia and Russia,” Rystad analyst Per Magnus Nysveen told The Guardian. As recently as three years ago, the U.S. was in fourth place on oil reserves.

A worker is seen at an Encana Oil & Gas (USA) Inc. fracking and extraction site, outside Rifle, Colo. in 2014. Fracking has made billions of barrels of U.S. oil reserves economical to extract. (Photo: Brendan Linsley/Associated Press) That’s not to say that oil suddenly and magically appeared under American soil. The industry measures “recoverable oil reserves” — not the total amount of oil under a country, but the amount that can be economically and legally extracted. The U.S.’s oil deposits are growing thanks to fracking — a process of using water and chemicals to break open rock and extract the “tight oil” inside. With this oil counted towards the U.S. reserves, the country turns out to have more oil than anyone had previously thought. “This data confirms that there is a relatively limited amount of recoverable oil left on the planet.” — Per Magnus Nysveen, Rystad Energy ​ By Rystad’s estimate, the world has just short of 2.1 trillion barrels of recoverable oil reserves left. If the global production rate of 30 billion barrels per year remains unchanged, that amounts to 70 years’ worth of oil. Noting research showing that the world’s car population is set to nearly double to two billion by 2035, Rystad says it’s becoming “very clear that oil alone cannot satisfy the growing need for individual transport.”

Trucks drive along a road near the Petroleos Mexicanos (PEMEX) Antonio Dovali Jaime refinery in Salina Cruz, Mexico in May. Mexico promises to be bigger competition for Canada's oilsands as it privatizes its industry. (Photo: Susana Gonzalez/Bloomberg via Getty Images) Analysts note that, while the U.S. has the most oil, the cost of extracting American “tight oil” is much higher than in conventional Russian or Saudi oil fields. "The rise in prominence of the U.S. doesn't diminish the role of Saudi Arabia or Russia, which have some of the cheapest [costs] to produce oil in the world,” analyst Richard Mallinson told the Financial Times. But it could diminish the role of Canada’s oilsands. The International Energy Agency earlier this year noted that Canadian oil is facing increased competition from both of the country’s NAFTA partners, the U.S. and Mexico (which is privatizing its oil industry).