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Reserves and Resources: How Much Energy?

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Succeeding chapters concerning specific energy sources begin with a brief assessment of the domestic energy supply, a fundamental consideration in all energy policymaking. However, disagreement over the available amount of a resource, especially fossil fuel energy, is a predictably contentious prelude to many discussions about how to manage the resource. Experts with respectable credentials frequently disagree about the precise amount of an energy resource physically available domestically or internationally.

One reason for this disagreement is different estimates concerning how much energy is recoverable under current economic and technological conditions (an energy reserve) and how much of the total energy source exists (an energy resource). A petroleum producer or a coal mining company, for instance, would define its reserves as the amount of petroleum or coal it is reasonably sure exists and can be located, extracted, and marketed under current conditions. Such companies would usually have a much larger energy resource. Additionally, experts may agree about the size of an energy resource or reserve, yet predictions of future availability may vary because of differing assumptions concerning future market demand. Chapter 3, concerning petroleum and natural gas, illustrates how predictions about a future natural gas “boom” depend, in good measure, upon whether the environmental impact of rapidly developing fracking technology that extracts natural gas from oil shale will be environmentally and economically acceptable.

Estimates of energy reserves and resources constantly change as new sources are discovered, older ones depleted, and economic or technological conditions alter. Consider the example of petroleum production. The rising price of domestic petroleum after 2000, for instance, made extraction of petroleum from the oil shale—previously considered too expensive to produce in quantity—now attractive to petroleum producers and refiners. Stated differently, with the right combination of technological innovation, market price, and anticipated demand, an energy resource can become a reserve.

American Energy

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