The Energy Challenge 2004 Petroleum
What most people don't know is that USA oil production has been in decline since 1970, with the rate of decline slowly increasing. It's at about 4%/yr. now. We now produce only about 40% of the oil we consume, and oil imports are the single largest item in our very negative balance of payments. If you had to pay at the pump to maintain the military we keep in the middle-east to keep the supply lanes open, (not counting the cost of the war in Iraq), instead of having it buried in the defense budget, gasoline would be over $7.00/gal today.
To make things more interesting, worldwide oil production will probably be in irreversible decline before the end of this decade. The present high oil and gasoline prices are just the first tremors of the earthquake that is coming.
Some months ago Lee Raymond, the chairman of Exxon-Mobil made a presentation that included a curve showing historic oil production (in Mb/d) and projecting future supply and demand. The supply curve, based on production from present known reserves sloped downwards. The demand curve sloped upwards. The growing gap between supply and demand represented new sources that we must discover to support world economic growth. Mr. Raymond made the point that by 2020 we must find enough new oil sources to supply 50 Mb/d. Today Russia and Saudi Arabia are each supplying a little more than 9 Mb/d, and struggling to get to 10. Their combined claimed reserves are about 400 Gb. One can extrapolate that we need to find and develop1100 Gb of new reserves during the next 15 years, or an average of about 75 Gb/yr. During the last 15 years, with plenty of incentive to find new oil sources, we have not averaged 10 Gb/yr.