The question I have to
ask is why is there even a debate about energy and this country. Of course it yet
again goes back to the money. There are MANY, MANY different
kinds of energy that we as a country should be working on and
encouraging people to develop. If the people running for
office would quit worrying about the large money people that help
put them in office. They could then come up with a good energy
policy. There is NO reason that we should be held hostage by
the oil companies and countries where the oil comes from.
There is so much more that we could use and develop. We could
have a lot more freedom from energy if only we would stop listening
to the people that this kind of policy would hurt the most, BUT help
the majority of the people the most.
brews: Has oil production
advocates say brief gas shortages, soaring pump prices could become
permanent way of life
Almost since the dawn of the oil age, people have
worried about the taps running dry. So far, the worrywarts have been
wrong. Oil men from John D. Rockefeller to T. Boone Pickens always
manage to find new gushers.
But now, a vocal minority of
experts says world oil production is at or near its peak. Existing
wells are tiring. New discoveries have disappointed for a decade.
And standard assessments of what remains in the biggest reservoirs
in the Middle East, they argue, are little more than
“There isn't a middle argument.
It's a finite resource. The only debate should be over when we
peak,” says Matthew Simmons, a Houston investment banker and author
of a new book that questions Saudi Arabia's oil reserves.
Today's gasoline prices are high
because Hurricanes Katrina and Rita disrupted oil production in the
Gulf of Mexico. But emergency supplies from strategic oil reserves
in the United States and abroad can largely compensate for that
temporary shortfall. If the “peak oil” advocates are correct,
however, today's transient shortages and high prices will soon
become a permanent way of life. Just as individual oil fields
inevitably reach a point at which it gets harder and more expensive
to extract the oil before output declines, global oil production is
about to crest, they say. Since 2000, the cost of finding and
developing new sources of oil has risen about 15% annually,
according to the John S. Herold consulting firm.
As global demand rises, American
consumers will find themselves in a bidding war with others around
the world for scarce oil supplies. That will send prices of
gasoline, heating oil and all petroleum-related products
“The least-bad scenario is a
hard landing, global recession worse than the 1930s,” says Kenneth
Deffeyes, a Princeton University professor emeritus of geosciences.
“The worst-case borrows from the Four Horsemen of the Apocalypse:
war, famine, pestilence and death.”
He's not kidding: Production of
pesticides and fertilizers needed to sustain crop yields rely on
large quantities of chemicals derived from petroleum. And Stanford
University's Amos Nur says China and the United States could “slide
into a military conflict” over oil.
There's no question that demand
is rising. Last year, global oil consumption jumped 3.5%, or 2.8
million barrels a day. The U.S. Energy Information Administration
projects demand rising from the current 84 million barrels a day to
103 million barrels by 2015. If China and India — where cars and
factories are proliferating madly — start consuming oil at just
one-half of current U.S. per-capita levels, global demand would jump
96%, according to Nur.
Such forecasts put the doom in
doomsday. Many in the industry reject the notion that global oil
production can't keep up. “This is the fifth time we've run out of
oil since the 1880s,” scoffs Daniel Yergin, who won a Pulitzer Prize
for his 1991 oil industry history The Prize.
In June, Yergin's consulting
firm, Cambridge Energy Research Associates (CERA) in Cambridge,
Mass., concluded oil supplies would exceed demand through 2010.
Plenty of new oil is likely to be found in the Middle East and off
the coasts of Brazil and Nigeria, Yergin says.
“There's a lot more oil out
there still to find,” says Peter Jackson, a veteran geologist who
co-authored the CERA study.
Based on current technology,
peak oil production won't occur before 2020, Yergin says. And even
if it does, oil production volumes won't plummet immediately;
they'll coast for years on an “undulating plateau,” he
Both sides in the peak oil
controversy agree that oil is a finite resource and that every year,
the world consumes more oil than it discovers. But those are about
the only things they agree upon.
As the debate has persisted,
it's grown personal. “Peak oil” believers disparage those who
disagree as mere “economists” in thrall to the magic of the
marketplace or simple-minded “optimists” who assume every new well
Yergin emphasizes that the CERA
study was developed by geologists and petroleum engineers, not
social scientists. Of Simmons, Yergin says: “He's wonderful at
stirring up an argument and slinging around rhetoric. … For some of
these people, it seems to be a theological issue. For us, it's an
When they're not trading
insults, the two sides disagree fiercely over the likelihood of
future technology breakthroughs, prospects for so-called
unconventional fuel sources such as oil sands and even the state of
Saudi Arabia's reserves.
The world's No. 1 oil exporter,
in fact, is at the center of Simmons' new book, Twilight in the
Desert: The Coming Saudi Oil Shock and the World Economy, which
has reinvigorated the peak oil argument.
Simmons says it's impossible for
global production to keep up with surging demand unless the Saudis
can increase daily production beyond today's 9.5 million barrels and
continue pumping comfortably for decades. And, indeed, Yergin is
counting on the Saudis to reach 13 million barrels a day by
Yet while the oil reserves of
U.S. firms are verified by the U.S. Geological Survey, the Saudis —
like other OPEC countries — don't allow independent audits of their
reservoirs. So when Riyadh says it has 263 billion barrels locked up
beneath the desert, the world has to take it at its word.
Simmons didn't. Instead, two
years ago, he pulled about 200 technical papers from the files of
the Society of Petroleum Engineers and performed his own assessment.
His conclusion: The Saudis are increasingly straining to drag oil
out of aging fields and could suffer a “production collapse” at any
Yergin is more optimistic both
about the Saudis and the industry's prospects in general. If the
past is any guide, technological breakthroughs will reshape both
demand and supply, he says. In the 1970s, for example, the deepest
offshore wells were drilled in 600 feet of water. Today, a Chevron
well in the Gulf of Mexico draws oil from 10,011 feet below the
Widespread use of technologies
such as remote sensing and automation in “digital oil fields” could
boost global oil reserves by 125 billion barrels, CERA says.
Already, advanced software and “down hole measurement” devices to
track what's happening in the well have elevated recovery rates in
some North Sea fields to 60% from the industry average of 35%,
Technology also won't stand
still on the consumption side of the equation, Yergin says. “By 2025
or 2030, we'll probably be moving around in vehicles quite different
from the ones we drive today. Maybe we'll be driving around in
vehicles that get 110 miles to the gallon,” he says.
That's more than a guess.
Toyota's 2001-model Prius hybrid got 48 miles per gallon; the 2005
model was up to 55 mpg. If automakers focused solely on energy
efficiency, 110 mpg isn't out of the question.
Still, breakthroughs don't just
happen, and in the late 1990s, after oil prices fell as low as $12 a
barrel, major oil companies slashed research spending. Some who
previously doubted the peak oil claims now wonder whether the
industry is equipped to develop the necessary
“Before 1998, I was on the side
that said, ‘Technology solves all problems,' ” says Roger Anderson
of Lamont-Doherty Earth Observatory of Columbia University. “The
problem is, after $12 oil, oil companies responded by merging and
firing large portions of their technical staff.”
Now, the International Energy
Agency in Paris estimates that $5 trillion in new spending is needed
over the next 30 years to improve exploration and
As oil prices — now about $63 a
barrel — stay elevated, so-called unconventional supplies of oil
become economically feasible. Exhibit one: enormous deposits of
Canadian oil sands, which could eventually yield more than 170
billion barrels of oil. On the list of the world's biggest oil
countries, that total puts the USA's northern neighbor behind only
That's the good news. The bad
news is that wringing oil from the sludge-like tar sands is
difficult and costly, and requires enormous quantities of water and
natural gas — itself an ever-pricier fuel.
Deffeyes calls talk of
substantial tar sands production “the fantasy of economists,”
adding: “They believe if you show up at the cashier's window with
enough money, God will put more oil in the ground.”
In recent months, the peak oil
camp has received support from some fairly sober quarters, including
the U.S. government. A 91-page study prepared in February for the
Energy Department concluded: “The world is fast approaching the
inevitable peaking of conventional world oil production … (a
problem) unlike any yet faced by modern industrial
So far, almost no one in
government is calling for immediate action because of the peak oil
argument. But in a recent interview with USA TODAY, Energy Secretary
Samuel Bodman sounded less than sanguine about the
“There's plenty of oil to deal
with this over the near term, five years. But if you look out over
the next 20, 25 years, we expect demand to grow 50% to 120 million
barrels a day. I wouldn't want to opine that's available,” says
Bodman, a former professor of chemical engineering at Massachusetts
Institute of Technology. “It could be, but I don't know.”