The Orinoco Oil Belt is now reckoned to contain 513 billion “technically recoverable” barrels of oil, or more than double the previous estimate of 235 barrels. Although this has been compared with and is said to dwarf the 264 billion barrels under Saudi Arabia, like is not quite being compared with like. The Venezuelan oil is “heavy oil”, which is a highly viscous bitumen rather than the light oil from Saudi which is highly prized since it is much easier to refine into fuel, especially petrol for spark-ignition engines. Converting the Orinoco “oil” into fuel will need a swathe of new engineering investment to build and develop refineries in order to derive fuel from it.
Nonetheless the Venezuelan President Hugo Chavez and his government have drawn-up plans to bring foreign investors including companies from China and India into the region, even though contract disputes reign with previous partners, based in the United States. The heavy oil is present in the form of oil-sands, similar to the tar-sands in Canada’s Athabasca region, and is highly intensive in terms of energy to provide heat to extract the bitumen and water too. Nonetheless Orinoco is the largest oil accumulation ever to be assessed by the United States Geological Survey, and the amount of recoverable oil is derived from estimates that 40 - 45% of it may be recovered, although there is some scepticism about this and one Venezuelan geologist, Gustavo Coronel, has put this down to 25%, noting that even then much of it would be too expensive to produce.
The latter does however depend on the prevailing price of a barrel of oil, which is now around $80 and rising. Sources of oil from Mexico (e.g. Cantarell) are in decline and American home-production of oil is falling even in the face of falling demand for it as driving-habits change. The Canadian tar sands are looking increasingly ripe, as supplies of conventional oil from the Middle East look to become more expensive and it is in no way certain that President Chavez will sell his oil to the U.S. anyway. In short, light crude oil will become an increasingly precious and scarce commodity, and heavy oil will be extracted instead.
As to the likely outcome of this, even if sufficient quantities can be recovered it is to the EROEI (Energy Returned On Energy Invested) that we should look to determine the viability of sources of “oil”. Middle East oil has various estimates of EROEI ranging from about 30 down to 8 (i.e. for each barrel of oil worth of energy, 30 to 8 barrels of oil may be recovered), while “oil” from tar sands is costed at anywhere from 3 down to 1.5. Clearly, whatever amount of hydrocarbon liquid fuels may be produced in the future, cheap, easily refined oil must soon peak, and along with it our global transportation network. It is the relocalization of civilization whose silhouette appears on the future horizon.
“Venezuela oil ‘may double Saudis’.” http://news.bbc.co.uk/1/hi/world/americas/8476395.stm
“Oil Estimates in Venezuela Doubled,” Jan Mouawad. http://greeninc.blogs.nytimes.com/2010/01/22/oil-estimates-in-venezuela-doubled/
“Why the U.S. needs all the tar sands oil it can get,” By Jeff Rubin. http://www.theglobeandmail.com/blogs/jeff-rubins-smaller-world/why-the-us-needs-all-the-tar-sands-oil-it-can-get/article1436274/