Just how much oil is out there?
st1\:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-ascii- mso-ascii-theme- mso-fareast- mso-fareast-theme- mso-hansi- mso-hansi-theme- mso-bidi- mso-bidi-theme-} There are really two theories about future oil availability today and they could hardly be more opposed to each other. The more prominent position states that increasing demand for energy will be met with an equal supply. It”™s hard not to giggle at such a stunningly unrealistic approach to the status of a non-renewable resource, particularly one that is not located within our borders. We import 60 percent of our oil supply from suppliers that also serve the growing needs of big developing countries. Now let”™s talk about the other theory ”“ peak oil.
To understand the principle of peak oil we need to go back to 1956 when legendary geologist M. King Hubbert developed his bell-shaped “peak oil curve,” to estimate the oil remaining in any given reserve. He illustrated his concept by predicting that oil production in the U.S. would peak in about 1970 and then go into a long, slow decline. By peaking he meant that roughly half of the oil reserves in the continental U.S. would reach their maximum production and then begin a decline. He was right on target. Prudhoe Bay, the U.S.”™ largest oil field ever, began production in 1977, but only reversed the U.S. production decline by about six years. There have been many smaller oil reserve discoveries but they have only added incrementally to U.S. oil production and are easily overcome by the steady climb in U.S. demand for fossil fuels, two to three times any new reserves discovered.
All the excitement over the benefits of oil shale, tar sands and even off-shore drilling is political talk with little reality attached. These projects would take several decades to develop, do tremendous damage to the environment, load the atmosphere with carbon, and put off the inevitable ”“ the critical need to make the enormous adjustments to cope with the end of the oil age.
The nation is dependent on foreign oil and it will be many decades before that dependency can be reduced. To underline the enormity of the adjustment for this nation, with only 5 percent of the world”™s population we consume 25 percent of the energy in the world creating ever more dependency on the Middle East, not the most stable part of the world.
Meanwhile, the lack of transparency in the OPEC countries makes it difficult to determine the extent of the remaining global oil reserves. The output allotment of the members of OPEC is determined by what each country says its remaining reserves are. Therefore, there is a temptation to overstate the size of the reserves. At this time there is no sure estimate of the remaining oil reserves in the world. We can see that Mexico”™s largest oil reserve, Cantarell, is not maintaining its output and is therefore considered to be in decline. Mexico is this nation”™s second largest supplier. Russia”™s reserves are said to be reaching peak. The North Sea is on the down side. The OPEC countries, particularly Saudi Arabia, are more complicated. The actual amount of oil remaining underground has to be assessed in other ways, by comparing the annual output of these OPEC members and when the particular reserve was put into production, for example. Such an equation can give an approximation of the remaining reserves, but only an approximation.
Today oil and gas prices are dropping and it is tempting to think the whole issue of peak oil has gone away. The drop in the price of a barrel of oil is a function of a rising value in the U.S. dollar as well as the effect of a slowing economy in this nation, and, of course, the chaos in the market and the lack of liquidity in the investment world.
We need to look at other factors that impact the price of oil. For one thing the oil reserves are located in countries that do not have our best interests at heart. This requires our government to frame its foreign policy based on our need to keep the oil flowing. China is getting into this game by making iron-clad deals with Nigeria to assure itself a steady supply of energy well into the future. Russia has begun to flex its political muscle in the way it is using its developed reserves.
There are more influences on the price of oil. The increasingly erratic weather has already caused damage to off-shore refineries. Some global oil suppliers have become interested in using their energy resources to develop their homeland. And, a new entrepreneurial enterprise is emerging around the Middle East and North Africa ”“ piracy. I am not aware of an oil tanker being hi-jacked yet but it is only a matter of time before that event makes the news.
The average worldwide recovery for all oil fields is about 35 percent. Even with all the technological advances there is no miracle that will increase production rates enough to offset natural declines. The current estimate for worldwide oil reserves to peak is between 2010 and 2015. Time to wake up to the reality of future energy security.
Surviving the Future explores a wide range of subjects to assist businesses in adapting to a new energy age. Maureen Morgan, a transit advocate, is on the board of Federated Conservationists of Westchester. Reach her at mmmorgan10@optonline.net.