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Fossil Energy
Reserves, Resources,
and Geopolitics
ENERGY RESERVES AND RESOURCES
Some  sources offer the prospect of being inexhaustible. Water and wind are
two such sources. Some more sources include biomass, solar energy, and nuclear
fusion (all to be discussed in later chapters). However, the common sources of
 that people in many countries rely on are electricity and liquid fuels for
transportation. These usually come from fossil fuel sources. Most of us take for
granted an unlimited supply of electricity; if there is any limitation at all, it is in our
ingenuity for plugging appliance upon appliance into the available outlets. Similarly,
we presume the ability to purchase unlimited amounts of gasoline or diesel fuel,
anywhere, anytime. But fossil fuels are not inexhaustible. And, unlike biomass, fos-
sil fuels cannot be regenerated on human time scales. Someday, in some sense of the
term, we will run out.
The concepts of reserves and resources to be discussed in this section apply to any
 source (and indeed to other natural substances as well, such as ores). The
reserve is the amount of a material that can be recovered economically with known
technology. Reserves usually are established by detailed exploration. A resource is
the entire amount of the material known or estimated to exist, regardless of the cost
or technological developments needed to extract it. In other words, the reserve is
what were sure of, but the resource includes what we think is there. By these deni-
tions, the amount of reserves is always less than the amount of the resource.
One’s personal nances can serve as an illustration of the concepts of reserves
and resources, and the various categories of each. A nancial reserve would con-
sist, rst of all, of the amount of cash in hand, the amount of money in checking
and savings accounts at the bank, and whatever cash advance could be gotten from
credit cards. All these amounts can bein principle—determined quite accurately,
and they represent money that one can count on having. This money represents
proved reserves.
In addition to proved reserves, money could be raised by selling personal pos-
sessions, such as a car; or by liquidating investments, such as stocks or bonds. This
is a bit trickier than emptying a purse or wallet and bank account. First, stock and
bond markets uctuate daily, so that while certainly some money can be realized by
liquidating investments, it’s not certain in advance how much could be realized on a
particular day. Second, while used cars, antiques, and collectibles do have assessed
values, if forced to sell a car in a hurry, one cant necessarily count on holding out to

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