Peak Oil News: Peak-oil concept stresses urgency of dwindling oil supply

Wednesday, May 25, 2005

Peak-oil concept stresses urgency of dwindling oil supply

The California Aggie

By DANIEL MCMENAMIN

Addictions can be hard to break. The United States’ addiction to fossil fuels has enabled it to reach heights never seen by any civilization in history.

However, many people who have studied the theory of peak oil —also known as Hubbert’s Peak, and is the idea that the world’s oil production will soon peak and then start to decline — believe that this addiction is not sustainable in the long term. They argue that in the near future, fossil fuels could be too expensive to use and eventually lost forever.

Most people found this idea hard to believe when it was proposed by a Shell Oil geologist over five decades ago. But today’s rising gas prices and sinking U.S. economy are making more and more people take heed of the theory, including politicians and CEOs of oil companies.

Along with the fact that several oil companies have merged in the past decade, executives of these companies are now beginning to acknowledge an oncoming crisis.

David J. O’Reilly, the chairman and CEO of Chevron Corporation told a Houston energy conference in February that “the time when we could count on cheap oil and even cheaper natural gas is clearly ending.”

The government is also becoming aware of this issue. In March, the U.S. House of Representatives listened to a presentation from U.S. Rep. Roscoe Bartlett (R-Md.), who spoke about the issue of peak oil, its long-term effects on American life, and possible alternative energy sources.

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So where did this idea come from, and why has it taken so long for people to start addressing it?

In 1949, a scientist named Marion King Hubbert publicly predicted that the fossil fuel era would be relatively short — that the production of oil within the United States would peak in 1970.

This theory was rejected by the majority of his colleagues and largely ignored by the public at the time. However, global oil discovery peaked in 1962, and surely enough U.S. production of oil began to decline in the early ’70s, proving that Hubbert was indeed correct.

What will happen when oil production peaks is usually depicted by a bell curve.

After production goes past the peak of the bell curve, supply can no longer meet demand. As the supply of oil dwindles, it becomes more rare and expensive, and this results in sharp rises in prices, which continue to increase until the supply is all used up.

When the peak will occur is not quite clear at this point, and this is something many people studying the issue disagree on.

“If we want to be pessimistic and make assumptions that no new discoveries are made, then the peak could be years from now,” said Hossein Farzai, a UCD professor who studies the economics of natural resources. “But if we’re optimistic and depend on technological advancements in the future, then investment in discoveries could delay the peak until decades from now.”

While people in the field of economics may be more likely to be more optimistic about technology coming to our rescue, geologists like Eldridge Moores tend to emphasize the finite nature of fossil fuels.

“This is a topic that the general public is not aware of,” said Moores, a professor emeritus in geology at UCD. “Economists tend to argue that we’ll always find more [oil], but some day you’re going to reach the end of that.”

Some of the most pessimistic analysts studying the issue predict that, based on current rates of consumption, the peak will come in the near future. For example, the Association for the Study of Peak Oil and Gas estimates that it will occur in 2008.

The government has even made its own prediction. The U.S. Geological Survey, which published a report in 2000 on the future of oil, predicted the peak to be reached at least a few decades down the road.

However, in a 1968 report the USGS predicted U.S. domestic production would grow long into the future. But within a decade, the study was completely discredited as Hubbert’s prediction hit its mark.

No one knows for sure though about when the peak will hit, since it depends largely on oil-rich countries like Saudi Arabia, which is part of the Organization of Petroleum Exporting Countries. These countries keep much of the information about their crude oil reserves secret, so it is hard for a consensus to be reached on when the event will occur.

Regardless of the exact date, it is clear that peak oil is not a matter of if it will occur; it is a matter of when, and signs are starting to show. According to the U.S. Department of Energy, the cost of a barrel of crude oil is currently just under $47. This is over 60 percent higher than the $29 price of May 2003, and almost triple the $17 price of May 1999.

The mainstream media, though, have been negligent in covering the impending oil crisis, and have only really started to talk about the issue of peak oil as the prices have increased, according to John Theobald, a UCD communications professor.

“Fear doesn’t play well in the long term. Often [the media] will talk about things like crime where there’ll be a remedy at the end,” he said. “That doesn’t appear to be the case here.”

Theobald teaches a class on underreported issues in the media, and has studied peak oil in depth. He is the thesis adviser for Liz Warren, who is writing her senior thesis on underreported issues and offered more reasons for why the media are only now waking up to the peak oil problem.

“There’s a tendency [in the media] to focus on events, like tsunamis, rather than incrementally growing problems,” Warren said. “It’s also hard to get the general public’s attention about it ... because it’s not fun to hear about. But people will start to feel cheated when they can’t have their way of life, and I think that’s the scariest thing about peak oil.”

Even people like Kurt Vonnegut, one of the most famous authors living today, are addressing the peak oil issue.

“We are all addicts of fossil fuels in a state of denial, about to face cold turkey,” he said in a 2004 essay.


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