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For the First Time, US Now The World's Largest Oil Reserve, Surpassing Saudi Arabia And Russia

Jul 08, 2016 04:00 AM EDT

The United States now has the largest oil reserve in the world, surpassing top oil leaders Saudi Arabia and Russia.

A report by a Norwegian oil and gas consultancy firm, Rystad Energy, said the U.S. is now the new global leader in recoverable oil reserves. The study reported that the country has 264 billion barrels of oil, 8 billion barrels more than Russia (256 billion oil barrels) and 52 billion more than Saudi Arabia (212 billion oil barrels).

Per Magnus Nysveen, head of analysis of the consultancy firm, said this is the first year that the U.S. made its way to the top of the list. Nysveen said the rise can be credited to the rapid increase of discoveries in the Permian basin in Texas over the past two years, as per The Guardian.

Just in the state of Texas alone, it holds more than 60 billion barrels of shale oil, even bigger than all of Mexico's reserve, as per the Los Angeles Times.

The study found out that many countries, especially members of the Organization of Petroleum Exporting Countries (OPEC), have exaggerated the size of their reserves in self-reported surveys. Rystad concluded the study by recording each country's "economically viable reserves."

The OPEC is an intergovernmental organization with 12 member countries, including Saudi Arabia. Together, they produce 40 percent of the world's crude oil supply.

Dark future ahead

Despite a reported global reserve of 2.1 trillion barrels, the study also revealed a dark future for oil in the world. The findings revealed that at the current rate of production, the oil supplies will only last for 70 more years.

On the other hand, the number of cars is projected to double in number in the next three decades, prompting the firm to conclude that the world cannot rely on oil alone to satisfy the need for individual transport.

The sharp increase in the oil reserves in the U.S. stem from hydraulic fracturing, or fracking, and horizontal drilling that squeeze out oil and gas from shale formations. More than half of the country's oil reserves are in shale oil.

Fracking has received sharp criticism from environmentalists around the world, due to its reportedly excessive water usage and contamination of nearby wells.

There is also a strong push to switch to renewable energy sources, such as solar, wind and water.

But there is definitely more work needed to be done to do the switch. In the U.S., even though California holds a reputation as a leader among the states as a top renewable energy producer, it still sits as the third-largest crude oil producer in the country.

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