Petroleum Economics - Chronological Aspects of American Oil-reserve Replenishment, with a Note on the Contemporary Situation

Published literature regarding the nation's oil reserve has been largely concerned with the estimated quantities in sight in known producing fields. This proved reserve has never been large in relation to demand. It has been the practice to consider the total future reserve (beyond that in sight within known fields) in the light of the broad potentialities of vast areas of partially explored sedimentary rocks, which are regarded as possible oil territory. Until recently, but little attention has been given to the rate at which the unexplored potentialities may be. converted into the proved reserve classification. To a certain extent, therefore, our contemporary viewpoint on the subject of national oil reserves is characterized by a pronounced contradiction. On the one hand, we measure known reserves as sufficient for only a few years of consumption—i.e., relative scarcity; on the other hand, we are confident that millions of unexplored acres will yield many new oil fields and that countless deeper productive formations underlie many of our known productive fields—i.e., infinite abundance. Of greater significance than the quantitative measure of either of these reserve classifications is the rate at which reserve replenishment must be accomplished in order to maintain an adequate time supply of proved oil reserves. The accumulation of geological data covering broad areas supports the belief that the remaining undiscovered oil reserve is exceedingly large. The distribution of oil in sedimentary formations of practically all ages, from Cambrian to Recent, is suggestive of almost unlimited possibilities; and the relatively small proportion of these possible areas that has been intensively explored in this country is a further index of the probable magnitude of the undiscovered future reserve. The implication that may reasonably be drawn from these observations is that oil, though distributed with less regularity and concentration than its related hydrocarbon, coal, nevertheless is a relatively abundant natural commodity of which the exhaustion appears remote. Final exhaustion of our oil reserve, if not infinitely remote, is a future contin-