New study on oil depletion… Let’s start our preparations now.
Sunday, March 20th, 2005In the post View from the Peak, WorldChanging brought to my attention a story at Salon about a report by respected energy research group John S. Herold, Inc. about peak oil estimates of various oil companies.
The Salon article makes a few conclusions from the research.
Herold’s projections have enormous ramifications both for stockholders in the major oil companies and for every energy consumer on the globe. If Herold is correct, and the world’s biggest oil companies cannot increase their production in the coming years, then several things appear certain:
- Oil prices — which are already at record levels — will continue rising as demand outstrips supply. In a few years, gasoline prices of $2 per gallon could seem like a bargain.
- State-owned oil companies like Mexico’s Pemex, Venezuela’s PDVSA (Petroléos de Venezuela) and Saudi Arabia’s Saudi Aramco may be unable to increase their production enough to meet burgeoning global demand.
- The producers who belong to the Organization of the Petroleum Exporting Countries, and Saudi Arabia in particular, may have even more leverage over the global oil market in the coming years.
- The United States will be ever more reliant on oil imported from countries filled with people who don’t like George W. Bush or his policies.
The author, Robert Bryce, concludes:
Of course, scientists, pundits and oil men have been predicting that the world will run out of oil ever since the gusher blew at Spindletop in Texas in 1901. Despite those predictions, the last century has been one of unbroken increases in supply. Each year, the oil industry has produced more oil than it did the year before. Today, the industry is producing about 83 million barrels of oil per day. New oil fields in the deep-water Gulf of Mexico, in the Caspian Sea and in Saudi Arabia will soon begin pumping oil onto the global market. Plus, huge deposits of oil are available in the Canadian tar sands and American oil shale.
But turning tar sands and shale into motor fuel is a very expensive proposition. And those new, unconventional oil sources may be insufficient to replace the decline in production from existing fields, which deplete by about 6 percent per year. Further, they may be too small to quench the demand from the developing world — China in particular. Last month, at a conference in Houston, Zhu Yu, the president of China’s Sinopec Economics and Development Research Institute, said that between January and September of 2004, motor fuel use in his country soared by 20 percent. Yu also predicted that China’s oil consumption will double over the next 15 years to more than 10 million barrels of oil per day. Meanwhile, the Energy Information Administration expects India’s oil consumption to increase by nearly 30 percent over the next five years.
That we continue to turn a blind eye to this problem is truly astounding. We will run out of oil one day.
President Bush is an easy target with his oil background; however, attacking Bush will not solve the problem. This problem is much larger than silly politics. Without political support there will not be a solution.
Politicians react to the people. Our people have become näive and self-absorbed. We have become so used to being prosperous that we have lost sight of the big picture. It has become common to think that things will stay the same. Americans are still buying SUVs in droves, many just don’t seem to have the ability to think long-term.
It is said that once the price of gas reaches a certain point we will react and reconsider our ways. I strongly believe this; however, it is sure to be a rude awakening. If we start the process of reducing our dependence on oil now, then we will be creating a cushion for our inevitable rough landing. The technologies will be there waiting. Switching to them will still be painful, but not as painful as it will be if we continue to ignore the looming problem at hand.