Reserves to Production Ratio

Time keeps on ticking. The reserves to production ratio tells us just how fast time is ticking, in terms of a natural resource.

Most of the time, the reserves to production ratio (RPR) is applied to oil and natural gas. It’s the amount of resources that you have (reserves) divided by how much you use per year, leaving you with how many years you have before it’s all gone.

Say a country has 2 million barrels of oil reserves, and they sell about 100,000 of them per year. If they are using 100k barrels per year, they’ll run out of the 2-million-barrel reserve in 20 years. 20 years is the RPR.

If we could nail down reserves to production ratio, we could tell when peak oil will happen (or if it’s happened already). The thing is, technology has made finding and extracting natural resources easier. That means our reserves are increasing as we’re finding more oil and natural gas, so the RPR keeps on changing.