
There is a very important distinction between resources and reserves, which is illustrated in the image below.
Move your mouse over the "oil areas" to see how crude oil resources, reserves, and consumption relate to each other.
Fuel Resources are fuel formations that are known to exist but are not currently economically viable (or technologically viable).
Fuel Reserves are fuel formations (such as an oil field) known to exist, which have fuel that can be extracted economically with current technologies and price structures. When oil prices rise or there is an advance in technology (such as deep sea oil drilling or hydrofracking), then resources become reserves, etc. Of course, new oil (coal and gas fields) are still being found. They are also still being formed but the rate of formation is so slow (millions of years) we do not consider new fossil fuel formation a possibility.
So we have extracted a lot of our fossil fuel resources but there are many more available as you can see below. Unfortunately, it tends to be lower quality and more expensive to get.

Crude Oil Lifetime Reserve Calculation
The lifetime of a fossil fuel is the quantity available (reserve) divided by the consumption. So:
Lifetime of a fossil fuel = Quantity in Reserve/ Rate of use
Let's look at some numbers:
- Total US proven reserves of crude oil are 22,446 million barrels.
- Estimated production/extraction (would be the better term) is 1,915 million barrels.
Lifetime of supply calculation:
22,446 million barrels / 1,915 million barrels per year = ~12 years
Why doesn't this worry me? Audio Text Version (click to reveal)
Dr. Mathews: You would think if we only had eleven years or twelve years supply of crude oil left that we should be in a bit of a panic. But the bottom line is that we aren't. If I looked up the data from a few years ago, actually we have more crude oil than we did back then. Remember this is somewhat of a misleading calculation. Because although we do have a relatively fixed quantity of crude oil in the world, our ability to find it changes quite dramatically, in the sense that we have to be looking for it. When we have lots of reserves and the price of crude oil is low we don't look for it. When we have certain economic indicators that the value of crude oil is higher then we go and look for some more. And so it is a continually moving target. Yes, we have crude oil. Yes, we use it. But the bottom line is we do not see reductions in how much crude oil we have every year. This is because we find new crude oil. This is because of some uncertainties in the existing fields. And we tend to be able to make some adjustments and get some more out of the ground. And if you look back in the history of these estimates, even one-hundred years ago, said we had thirty years to fifteen years of a supply of crude oil. And every decade or so someone comes up with the same calculation and the same estimate and the number is about the same. So we have had about a fifteen year supply of crude oil for the last hundred years. And we are probably going to have a fifteen year supply of crude oil well into this coming century. Now certainly some of our fields are going to become exhausted. Some of the Alaskan fields, for example, are going away and in the UK, some of the North Sea fields are going to be exhausted. But essentially what we will do is look for new crude oil. We will spend additional money, we will have new technologies, we will go deeper finding it in the Gulf of Mexico, and we will be able to extract more with some additional techniques I will discuss. So yes we only have eleven point two years of crude oil supply via this calculation but the reserves are going to continue to grow and be depleted at the same time. Generally, that is going to be about the same rate. But eventually, at some point in time, the US is going to pretty much run out of its crude oil but then we are going to switch to other fuels. Remember we can take coal and turn it into a crude oil. The reason we don't do that is because it is expensive. Cost us about thirty-five dollars a barrel to that and I can go and buy a barrel of crude oil for about twenty-seven dollars. So it is cheaper but once we start running out, then the cost will go up, and we will be more able or be more intent to save money by going with some of these new advanced techniques. And of course there are tar sands, oil shale, and the list goes on.
Here is a good example of how changing technologies such as horizontal drilling and hydrofracturing have recently (2008 to 2012) increased our reserve even while our Alaskan reserves are being depleted due to extraction.

More Fossil Fuel Lifetime Reserve Calculations
Natural Gas
We can do a similar calculation for US natural gas:
- Total US proven reserves of natural gas are 21 trillion cubic feet.
- Estimated production is 19,779 billion cubic feet per year (this varies with weather, economy, etc).
A lifetime of supply calculation:
183,460 billion cubic feet / 19,779 billion cubic feet per year = 10 years
Coal
- We have in the neighborhood of 261 billion short tons US reserves (recoverable coal).
- We mine (and use) about 1 billion short tons.
That equates to about a 261-year supply if we maintain coal extraction levels.
Remember, our RESOURCES of fossil fuels (those that are not economic to extract, or which would require technology we currently lack) are much larger than the reserves (that we can extract using current technologies and are economically viable).