A recent study puts U.S. oil reserves at 264 Billion barrels of recoverable oil. A staggering amount that is larger than both Saudi Arabia (212 Billion) and Russia (256 Billion). Looking back over the past 20 years of U.S. energy policy and business strategy around U.S. energy reserves, it is hard to think that anyone would have believed in, say 2006, that U.S. reserves would be the highest in the world ten years later. Back then, many serious minded people were worried about "peak oil" and thought that reserves would only decline in the future.
None of this is to take a position on the future of global oil reserves, but merely to point out that most boards and most people make predictions using straight-line projections of current circumstances. Just as high oil prices were not ultimately sustainable in the 2005 - 2006 timeframe, the current low oil price is also very likely to be unsustainable as well. The real world is highly unpredictable and remarkably unwilling to be tamed by even the mightiest spreadsheet (as useful as such tools are!). Boards of Directors should keep this unpredictability in mind and take to forecasting with a requisite does of humility.