For the past several years, energy investment banker Matt Simmons has spent much of his time stumping for Oil Transparency. His argument is that if we better understand the amount of oil left in the ground, we are in a vastly better situation for figuring out what to do about it and have a vastly stronger foundation for building the necessary political will to swallow potentially bitter pills. Simmons says the lack of greater certainty around our energy future enables us to complacently sit on our laurels as the window of opportunity for addressing peak oil narrows. He suggests making oil reserves data public worldwide, noting that exporting countries have not been forthright about their reserves.

An important International effort to make world oil production numbers transparent is the Joint Oil Data Initiative. It, however, does not address the most important data we need to make vital energy decisions − total remaining reserves audited by third parties. It is useful to know how quickly the car is using gas, which this initiative provides, but without knowing how much gas is left in the gas tank, we still can’t make important policy decisions.

A comprehensive Oil Transparency strategy would include the best information about oil still in the ground, as well as an understanding of the assumptions that go into world oil production models, what exactly is defined as oil, and how quickly and economically substitutes can be produced. Oil transparency can include alternative sources (like shale, tar sands, etc.) but must also openly consider the ecological and climate consequences of turning to these sources. Lastly, we need to understand how we came to be in this predicament. Deciphering U.S. energy policy over the past six decades will help us understand how we arrived to this perilous situation and what kinds of changes need to be put in place to make sure that the mistakes of yesteryear are not multiplied into the future.

We need transparency in all aspects of oil especially worldwide reserves data and its implications for future production for several reasons.

First, without this data, we are unable to predict when the world will reach peak oil, the point at which worldwide oil production inexorably begins to decline. Because our economies are completely dependent on highly available and inexpensive oil, knowing when the peak will occur is vital to planning our transition away from oil. The Energy Information Administration (EIA) and Cambridge Energy Research Associates (CERA) claim that peak oil will not occur for several decades and argue that there is plenty of oil left to recover for future use. On the other hand, the Association for the Study of Peak Oil and Gas (ASPO), which counts Simmons and many independent and respected geologists among its members, believes that the peak is just a few years away.

Second, valuable policy initiatives such as the Oil Depletion Protocol, in which countries agree to ratchet down their oil consumption in lockstep with the overall depletion rate, would work best if based upon accurate reserve and production data estimated using best practices yet to be established. The Oil Depletion Protocol is an innovative international agreement that will prevent resource wars over the remaining oil deposits which may be inevitable without this sort of agreement in place.

Third, oil transparency could be the linchpin that enables the country to buckle down and commit to a sustainable energy future. We sorely need a massive and immediate energy efficiency/conservation initiative to drastically reduce energy (and water) use in the next decade along with an intensive build out of a more sustainable and localized, renewable energy-powered economy over the next three to five decades.
We no longer have the luxury of planning our economy around speculative technological advances that may never materialize or believing that vast of amounts of energy resources will discovered or will replace oil just because they exist. We need a responsible energy policy that addresses both peak oil and climate change that has proven technologies at its core and rational standard methodologies for estimating EROEI and carbon emissions for all proposed alternatives. This is the leading possibility for a development of a responsible energy policy that will begin the transition towards a sustainable future.