The answer to this, according to a CTV News online article by Neil Reynolds entitled “The Fossil Fuel King of the World,” might surprise you. I myself would have guessed a country, or combination of countries in the Middle East, but according to a study done by the U.S. Congressional Research Service, the answer to that question is the United States.
Reynolds reports, and I quote, “The agency’s calculations are based on proved reserves of oil, natural gas and coal. By this measure, the U.S. has less conventional oil (19.1 billion barrels) than other fossil fuel superpowers: Saudi Arabia has 46.7 billion barrels. But it has much more natural gas (43.4 BBOE) and coal (910.1 BBOE). Saudi Arabia, in contrast, has zero coal. “Using only proved numbers for the U.S. and other nations,” the agency says, “[we show] that the U.S. remains among the top nations in proved reserves of all fossil fuels taken together.”
Here are the Top 10 countries, according to the report: (1) U.S., 972.6 BBOE (Billions of Barrels of Oil Equivalent); (2) Russia, 964.9; (3) China, 474.8; (4) Iran, 328.1; (5) Australia-New Zealand, 314.6; (6) Saudi Arabia, 309.1; (7) India, 227.3; (8) Canada, 211.4; (9) Qatar, 184.8; (10) Kazakhstan, 164.1. Runner-up countries include Venezuela, UAE, Kuwait and Iraq.”
He goes on to note that the calculations for U.S. fossil fuel reserves do not even take into account the huge coal deposits in Alaska, which are difficult to access, but which could meet our energy needs here in the U.S. for the next 3,000+ years.
Saudi Arabia, while rich in oil, has no coal deposits, hence they’re burning crude to produce electricity; a fact I pointed out in a previous blog post on March 30, 2011. The fact that they’re burning their own crude to support an ever-expanding population and economy has a direct bearing on how much oil they can bring to market, and, of course, has an impact on the oil market as a whole. (Oil traded at $108 a barrel yesterday, a new high.) According to a new Reuter’s Poll, oil will be trading in the $130 range by the end of this year, and one in five traders thought it might go as high as $150 a barrel; something no one wanted to hear.
Obviously, this spike in oil prices isn’t solely attributable to the Saudis burning crude to generate electricity. That’s just a small part of the picture. Rising demand and political upheaval in the Middle East play a much larger role.
While we in the U.S. are blessed with huge deposits of coal and natural gas, we still have to import oil for transportation needs, and that oil is getting more and more expensive all the time. Whether we like it or not, it appears that high gas prices will be another one of those painful “new normals” that will cause us to adjust our thinking. Be prepared.