From The Economist of 20 Apr 2006
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Steady as she goes
But is the world really starting to run out of oil? And would hitting a global peak of production necessarily spell economic ruin? Both questions are arguable. Despite today's obsession with the idea of “peak oil”, what really matters to the world economy is not when conventional oil production peaks, but whether we have enough affordable and convenient fuel from any source to power our current fleet of cars, buses and aeroplanes. With that in mind, the global oil industry is on the verge of a dramatic transformation from a risky exploration business into a technology-intensive manufacturing business. And the product that big oil companies will soon be manufacturing, argues Shell's Mr Van der Veer, is “greener fossil fuels”.
The race is on to manufacture such fuels for blending into petrol and diesel today, thus extending the useful life of the world's remaining oil reserves. This shift in emphasis from discovery to manufacturing opens the door to firms outside the oil industry (such as America's General Electric, Britain's Virgin Fuels and South Africa's Sasol) that are keen on alternative energy. It may even result in a breakthrough that replaces oil altogether. ...
It is true that the big firms are struggling to replace reserves. But that does not mean the world is running out of oil, just that they do not have access to the vast deposits of cheap and easy oil that are left in Russia and members of the Organisation of Petroleum Exporting Countries (OPEC). And as the great fields of the North Sea and Alaska mature, non-OPEC oil production will probably peak by 2010 or 2015. That is soon—but it says nothing of what really matters, which is the global picture.
When the United States Geological Survey (USGS) studied the matter closely, it concluded that the world had around 3 trillion barrels of recoverable conventional oil in the ground. Of that, only one-third has been produced. ...
It is also true that oilmen will probably discover no more “super-giant” fields like Saudi Arabia's Ghawar (which alone produces 5m bpd). But there are even bigger resources available right under their noses. Technological breakthroughs such as multi-lateral drilling helped defy predictions of decline in Britain's North Sea that have been made since the 1980s: the region is only now peaking.
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Many technologies existed and are now being pioneered or rediscovered only because price of oil is starting to return to the average 20th Century price.
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Shell blended conventional diesel with a super-clean and super-powerful new form of diesel made from natural gas (with the clunky name of gas-to-liquids, or GTL). ...
Unless the world sees another OPEC-engineered price collapse as it did in 1985 and 1998, GTL, tar sands, ethanol and other alternatives will become more economic by the day.
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Large sections of the North Sea and Bakersfield CA have new oil because more advanced recovery concepts are worth investigating. When does biodiesel become viable? $80 per barrel. Welcome back to the real world. Welcome to what happens when a nation blindly builds a fleet of 1960 technology SUVs rather than doing more with less energy. Now we must spend money, machinery, and labor - massively - for where most of that oil always remained.
So how many were too emotional to think logically; complain gas prices are too high? That same complaint was when gas prices rose from $0.85 per gallon to $1.30. So what did they do? Nothing. Nothing because their complaints were totally based in what adult children do - think emotionally; not logically. SUV sales even increased as gas went to $2/gallon. Still they cried like children - and did nothing.
IOW act like a Rush Limbaugh type instead of first learning facts. Price of oil triples and yet demand is not altered? By my definition, those who complain about price of gasoline are classic examples of anti-Americans. Emotional rather than logical. "I feel he has WMD; therefore he must". No wonder this nation now tortures people over the world - and so many Americans are too anti-American to even speak up. Same nonsense from those who somehow know oil prices are too high.
One final point. Serious problem is not due to a shortage of oil. Those second two trillion barrels will be burned at significantly increasing rates. Serious consequences are from other factors such as massive increases in CO2 emission and other toxic (destructive) compounds. We are only just learning consequences of things that few industrialized people have only just begun to consider AND now the entire world is just beginning to contribute into.
Plenty of oil is available. And there remains nothing in the long term that will provide 'energy per pound' so necessary in oil based fuels. We have plenty of oil. If we want to burn it like there was no tomorrow, costs (prices and other factors) will reflect accordingly. Oil is a wonderful material unrivaled in the products oil can create. And yet we just burn it. Don't worry. Be happy. Consequences of not using oil responsibly will instead fall on our heirs.