Oil Sector Productivity

Slate, via Ritholtz:

In 2010, America’s proved oil reserves stood at 31 billion barrels, just slightly below the 33.8 billion barrels of proved reserves the United States had in 1990. But over that two-decade period, the domestic oil sector produced about 52 billion barrels of oil. In other words, between 1990 and 2010, the United States produced nearly twice as much oil as we believed the whole country had in 1990, and yet at the end of that period, we still had about the same amount in proven reserves. What’s going on? In a word: innovation. And few industries on the planet have been as innovative as the American oil and gas sector.

It’s not the size of your reserves that counts, it’s what you do with them. And the U.S. oil and gas sector has been remarkably proficient at exploiting this country’s vast mineral wealth. Over the past century or so, oil and gas drilling has gone from a business dominated by wildcatters armed mainly with a hunch and a prayer to one where the latest seismic and “geosteering” technologies allow drillers to steer their bits so accurately that they can arrive within inches of their target zone two miles (or more) beneath the Earth’s surface.

While the U.S. might be continuing to find oil, their energy ROI is still getting worse and worse, and that is the most important fact.  At a certain point, it just isn't a very good investment.  We're getting ever closer to that point.