- It's called "the big rollover," the moment
when worldwide demand for oil outstrips the global capacity to produce
it.
-
- Most oil experts agree that when that day of reckoning
comes, it will signal the end of the oil age and the end of cheap energy.
Petroleum geologists, energy-industry analysts and others are now saying
that moment is close at hand and may even have already occurred.
-
- "This is the monster in the closet," said Kenneth
Deffeyes, a professor emeritus of geosciences at Princeton University and
author of a book about oil depletion. "This is such bad news that
... we're not going to hear from either Republicans or Democrats about
it until after the election. Everybody wants to say we can have 2 percent
or 3 percent economic growth."
-
- While the public has generally grown complacent about
oil dependence, believing that the day the world runs out of oil is far
in the future, that is not the moment that counts, oil experts said.
-
- Rather, under the scenario many experts lay out, the
key moment will be when oil production can no longer keep pace with demand.
When that happens, prices will rise - maybe sharply, maybe gradually -
and they will keep rising until demand eventually drops.
-
- Since transportation in the United States is almost wholly
dependent on oil, and the United States uses more oil than any other nation,
the potential for economic havoc is great.
-
- "Whether that peak happens in 2020 or 2050 is not
important," said David Goodstein, a physics professor at the California
Institute of Technology and author of "Out of Gas: The End of the
Age of Oil." "It still doesn't give us enough time to come up
with an alternative if we don't make an attempt to come up with an alternative"
right away.
-
- Forecasts for when the peak will arrive vary, with some
experts predicting it will occur this decade - Deffeyes says Thanksgiving
Day 2005, give or take a month - and others point to about 2012. The International
Energy Agency, which was created by industrial countries after the 1973
oil crisis, places the peak of oil production somewhere between 2010 and
2020.
-
- The U.S. Energy Information Administration, the government's
energy data and analysis arm, places the peaking point at about 2037, considerably
farther into the future. But the energy administration's analysis is based
on an estimate of 3 trillion barrels of total recoverable oil since production
began - a far more optimistic assessment than many analysts believe is
reasonable.
-
- Other experts cite about 40 studies that place the total
amount of oil that can ever be technologically and economically recovered
at between 1.8 trillion and 2.4 trillion barrels.
-
- A total of about 950 billion barrels - or nearly half
- has already been produced. That's key because most analysts - including
experts with the energy administration - believe that production will peak
at about the halfway point in proven oil reserves.
-
- Their reasoning is based on the experience of the United
States, which reached its production peak in the lower 48 states in 1970
at almost exactly the halfway point in proven reserves.
-
- If the estimates of proven reserves grow based on the
discovery of new fields or the use of better technology to recover more
oil, the day of reckoning moves further into the future.
-
- However, if world demand for oil grows faster than proven
reserves, the day of reckoning draws closer. And that's exactly what has
been happening. The volume of oil discovered every five years has been
decreasing steadily since about 1980, while demand has been growing at
about 3 percent a year.
-
- Meanwhile, the oil being produced is increasingly coming
from older fields that are nearing the point when their yield will start
to decline.
-
- "The average barrel of oil comes from a field that
was discovered more than 30 years ago and some of it is coming from fields
discovered more than 100 years ago," Deffeyes said.
-
- Currently, the world consumes 28 billion barrels of oil
a year, or 78 million barrels a day.
-
- Matthew Simmons - chairman of the Houston energy research
and investment banking firm Simmons & Company International, and an
energy adviser to the Bush campaign in 2000 - recently created a flurry
of controversy in oil circles when he suggested that Saudi Arabia and other
OPEC (Organization of Petroleum Exporting Countries) nations may be overstating
their proven reserves.
-
- If that's the case, then the moment of peak production
is likely to be sooner, rather than later.
-
- In the mid-1980s, when OPEC was changing its quota system
based on each member country's proven reserves, Saudi Arabia and other
countries suddenly and dramatically increased their estimates of proven
reserves, Simmons said.
-
- Those estimates have essentially remained the same ever
since, even though there have been no large oil discoveries "of a
meaningful size" in the last 20 years, Simmons said.
-
- "They (Saudi Arabia) went from 360 billion barrels
of proved reserves to double that number without any new oil being found
and no increase in rigs," Simmons said.
-
- For example, in the early 1970s, four of the world's
largest oil companies - Exxon, Chevron, Texaco and Mobil - estimated the
Ghawar oil field, which is the largest oil field in Saudi Arabia, to have
60 billion barrels of recoverable oil, Simmons said.
-
- Ghawar has now produced 55 billion barrels, which means
it should be at the end of its life, Simmons said. But Aramco, the Saudi
national oil company, now says the field has 125 billion barrels of oil
left to produce, Simmons said.
-
- "If that were true, it means that four companies
with the single best people working on this missed Ghawar's reserves by
a factor of three," Simmons said skeptically.
-
- It's difficult for outsiders to confirm or disprove Saudi
estimates since the government keeps secret much of the information on
which estimates are based.
-
- Saudi officials have vehemently denied any suggestion
that their reserves are overestimated, but Simmons and others want Aramco
to disclose more information.
-
- "If we don't get serious about reforming energy
data," Simmons said, "we're going to have a cataclysmic event
and people are going to say, 'Gosh, I wish we had known this ahead of time.'
"
-
- On the Net: www.eia.doe.gov
-
- Distributed by Scripps Howard News Service, ( http://www.shns.com
)
- © 2004 The E.W. Scripps Co.
- http://www.tcpalm.com/tcp/nation_world_news
/article/0,1651,TCP_1022_2790063,00.html
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