Reserves and Total Resources
Considering the finite aspect of the world, there is a fixed quantity
of resources, often referred as total resources. Based upon what has
been discovered and its cost of recovery, only a segment of the total
resources can be considered as reserves. Thus, reserves are resources
that are available under current market conditions (cost and technology).
A significant amount of resources could be known to be present, but
if the costs of their extraction and transformation is prohibitive,
they will not be used, as they are considered sub-economic. A growth
in the price of a resource (mainly due to scarcity and growing demand)
can increase the quantity of resources that are recoverable in addition
to technological improvements enabling resources that were not previously
recoverable to become recoverable. Exploration can also identify resources
that can either be immediately recoverable or could potentially be if
investments were made. Some resources can be considered potentially
unrecoverable since they exist in concentrations and/or locations
that are unlikely to ever be available.
For petroleum, most of the exploration cycle is completed, implying
that it is unlikely that additional reserves of significance are going
to be found. The question of cost of recovery remains as scarcity (peak
oil) has become a strong force in growing prices. Under such circumstances,
new resources, such as tar sands, can become available and thus be
considered as reserves.