Wind and solar power are expensive, realistically four to six times the cost of conventional energy sources. If we are going to convert to electric cars we will need lots of energy to make the batteries for the cars as well as to charge them. In a separate category, the global warming scare tries to impress upon us the need to avoid fossil fuels immediately for fear we all fry by 2010, or whatever the current date of doom. Underneath these discussions is the question of how much oil is left. When the oil equivalents like oil shale are counted, the US has about 300 years.

Proven reserves of oil equivalents

Proven reserves only represent the oil we know about, and large areas of the US are not explored, because there is no point in expensive exploration to discover reserves that are prohibited from development. The Atlantic and Arctic costs are not well explored, for example. Currently, the areas off limits to new oil drilling are: all the coasts except the western Caribbean, all of undeveloped Alaska, and about 97% of Western land. Even without any new discoveries, proven reserved grow because the technology for economically extracting oil advances.

It turns out that traditional petroleum is not the most interesting part of the accounting. Equivalents to petroleum can be recovered from tar sands and oil shale, even though current U.S. development is effectively prohibited. It is relatively expensive to do so, but coal can also be converted to an equivalent of oil. Natural gas is used for home heating and can be used for vehicles, if the price is right.

The Congressional Research Service says the US has oil reserves of 163 billion barrels Economically recoverable oil shale reserves in the US are estimated at 1.5–2.6 trillion barrels, by far the largest in the world. The US has only 32 billion barrels of oil from tar sands, whereas Canada has 1.75 trillion barrels worth of oil in tar sands. The US has 22% of the world’s coal, equivalent to 930 billion barrels of oil.

Energy consumption

The US consumes about 18.7 million barrels per day, which is 6.8 billion barrels per year. Oil consumption has been roughly stable for two decades. Oil is used almost entirely for transportation. Electricity in the U.S. is derived about half from coal, a quarter from nuclear, and the rest from natural gas and hydroelectric power. Wind and solar are negligible. Total energy use per person in the United States peaked in 1978 and has declined by 16% since then. Total energy consumption is the equivalent of 15.9 billion barrels of oil, with about 43% of it from petroleum.

Let’s assume that coal will be used at the present rate to generate electricity for the next hundred years. That would use about half the reserves of coal, so the other half is potentially available for conversion into a petroleum substitute.

Natural gas usage for electric power will probably increase, because new recovery technology is rapidly increasing the reserves. The reserve estimates showed equivalence to about 50 billion barrels of oil in 2009, with reserves have been growing each year for over a decade. The latest innovation is in recovering shale gas, and that is dramatically increasing reserves. Current estimates are that shale gas reserves in the US are about three times other reserves, amounting to the equivalent of 150 billion barrels of supply in the U.S.

At current consumption rates, the world has enough uranium to power the worlds reactors for about 100 years, but if more expensive fuel reprocessing is used, the supply jumps to 2500 years.

We’ll assume that a 100 year allotment of coal together with nuclear and natural gas will take care of electricity and home heating. So if forced to rely solely upon our own reserves to provide petroleum equivalents for transportation, the US has 24 years worth of conventional petroleum, 220 to 514 years worth of oil shale, and 68 years worth of coal-to-oil equivalent. We could get by for at least 300 years. Our Canadian neighbors have about 250 US-consumption-years worth of oil equivalents from tar sands.

The value of fossil fuels

Currently the US imports about 4.5 billion barrels per year, which at $100 a barrel represents a cost of $450 billion. Oil soared to $150 a barrel, then dropped to $40 a barrel and recently recovered to $100 a barrel. The long term trend is likely upwards due to the strong demand from outside the US. $100 a barrel is conservative over the long term.

At that price the US has about $312 trillion worth of fossil fuels, with most of the oil and all of the tar sands and oil shale now off limits. Coal is currently allowed, but Obama has declared war on coal and the EPA has imposed new regulations that make it less economic. The current plan offers no alternative to importing ever-increasing quantities from Canada and elsewhere. Canada has plenty, so why would we want to develop US resources rather than import from Canada? It is because we could use the $312 trillion coming into the US, rather than most of that amount going out of the US.

The reserves imply that the U.S. could be energy independent. It doesn’t make sense to develop domestic resources if foreign oil is cheaper. Some domestic reserves are likely to be competitive, such as Alaska, the Eastern Caribbean, and the Pacific offshore oil. Keeping that oil locked up makes no economic sense. Political risks with foreign oil from Middle East may make domestic oil worth more to some degree, an adjustment that could be made with selective tariffs on imports.

Just removing the immediate obstacles to domestic energy production could provide 500,000 jobs The current recession is attributed to lack of consumer demand for products. Energy is one product with a growing worldwide demand, and only government stands in the way. Currently the energy sector provides 9.2 million jobs for Americans. Releasing prohibitions on the development of domestic resources has the potential for millions more.