Last week, various media outlets (including Al Jazeera and the Energy Bulletin) reported that Mr. Abdallah Jumah, president and CEO of Aramco (the state-owned Saudi Arabian Oil Company) made a number of statements regarding future world oil production, notably:

• The world has potentially 4.5 trillion barrels in reserves - enough to last 140 years at current levels of consumption, and
• The world has only consumed about 18 percent of its conventional potential.

140 years of supply

Regarding Mr. Jumah's first statement. If the world has 4.5 trillion barrels in reserves and if current levels of consumption remain unchanged (at 85 million barrels a day or 31 billion barrels a year), then yes, there would be enough oil to last 140 years:

4.5 trillion divided by 31 billion per year gives about 145 years.

Although no one knows the world's total reserves, we can say with certainty that the world's demand for oil will increase. This being the case, even if the world has 4.5 trillion barrels in reserves, there will be less than 140 years of oil remaining since current levels of consumption will not remain unchanged.

18 percent of conventional potential consumed

Mr. Jumah's claim that the world has only consumed 18 percent of its conventional potential is based upon his assertion that the world has 4.5 billion barrels in reserves. If, as most analysts agree, the world has consumed one trillion barrels, then using Mr. Jumah's 4.5 trillion reserve figure, the world's total oil endowment would be 5.5 trillion barrels. Based upon this total, the percentage of the world's total oil consumed to date is 1 trillion divided by 5.5 trillion or about 18 percent.

And when does the peak occur?

Assuming for a moment that the world does have 4.5 trillion barrels in reserves, it is instructive to calculate when the peak would occur. If the world has 4.5 trillion barrels in reserves and has used 1 trillion, then the world's total supply of oil was 5.5 trillion barrels. The peak (the midpoint) in this case would be 2.75 trillion barrels (half of 5.5 trillion). Since 1 trillion barrels have already been consumed, the peak will be reached when another 1.75 trillion barrels have been consumed. When this will occur depends upon the annual rate of growth in consumption (assuming that daily consumption in 2006 is 85 million barrels a day):

If, as Mr. Jumah claims, the world has 4.5 trillion barrels in reserves, a peak will still occur; in this case, within the next 30 to 60 years. Quite simply, there is no escaping the fact, we live on a finite planet and its oil reserves are finite; inflating the possible reserves does nothing to stop the peak from occurring.

Larry Hughes, Dalhousie University, Halifax, 18 September 2006