To the long list of wearying apocalyptic scenarios facing the future of humankind must, unfortunately, be appended yet another. One which, nonetheless, at least has the merit of focusing attention by virtue of its sheer immediacy.
According, then, to many of the world's most prestigious (independent) oil geologists and institutions, not only is the era of cheap oil now almost certainly at an end, but by the end of this decade--and likely before--the price of a barrel of oil will rise well past $100, and will continue to climb quickly and inexorably thereafter. One need not be a rocket scientist to begin to grasp the staggering implications of this for industrial civilization.
But before we do that, best to start at the beginning....
In 1956, the geologist M. King Hubbert predicted that the U.S.'s oil production would peak in 1970, and thereafter begin an accelerating decline. Despite being derided at the time by many industry analysts, his predictions proved entirely accurate. This, for the very good reason that he had correctly figured out that oil extraction follows a statistical model known as a bell curve.
Oil production starts off slow, picks up more and more, reaches a peak--when half the oil has been pumped out--and then begins to fall as it had risen, that is, faster and faster. In the latter stages, all sorts of strategies are used to maintain pressure at the wellhead, including pumping the reservoir with water and gas. Still, it's a case finally of diminishing returns. Less and less oil at greater and greater cost.
But, you might ask, what difference does it make if a particular oil field runs dry? Aren't new ones being discovered?
Aye, there's the rub. In fact, many of the world's largest oil fields are now decades old and are depleting rapidly. Thus, in the mid-eighties the North Sea used to produce 500,000 barrels per day. Today it produces 50,000. Prudhoe Bay in Alaska once gushed out over 1.5 million barrels per day, but in 1989 it peaked and now gives only 350,000. The huge Russian Samotlor field used to account for 3.5 million barrels per day. Now its ledger tallies a mere 350,000.
Even the largest oil field in the world, the giant Ghawar of Saudia Arabia, is showing distinct signs of having peaked. The Saudis must now inject some seven million barrels of water per day into the reservoir just to maintain well-head pressure.
As for new discoveries, there have been no new large discoveries in over two decades. The 14 largest oil fields average over forty years old. Indeed, Dr. Colin Campbell, former chief geologist for Shell Oil, has stated that the discovery of major new oil reserves "peaked in the 1960s" and that, "We now find one barrel for every four we consume."
According to the best estimates, by such as the Petroconsultants of Geneva, the French Petroleum Institute and the Colorado School of Mines, global "peak oil" will likely be upon us sometime before 2010. Such estimates, of course, fly in the face of those by the U.S. Geological Survey and the International Energy Agency, both of which acknowledge "peak oil," but which project its onset to somewhere between 2015 and 2040. Most of the independent experts, however, argue that these latter figures are mistaken on at least three counts.
The first is that oil reserve figures have been inflated for years for purely speculative and ideological reasons, essentially to maintain investor confidence. A stark illustration is provided by the scandal of Shell Oil, which was recently forced to revise its reserve estimates downwards by over twenty per cent.
The second involves reliance on so-called "non-conventional" oil supplies, including tar sands and oil shales. Unfortunately, these require massive amounts of energy to extract. And not just energy. For every barrel of oil from tar sands; 400 to 1,000 cubic feet of gas are …