Out of gas? How much is there?
By Ken Geiger / Guest columnist
We need to recognize that the Earth's resources are finite. Oil and natural gas occur under very specific geologic conditions. There has been a tremendous effort to locate and quantify the world's oil reserves. Most experts seem to agree that the earth had oil reserves of between 2.1 and 2.2 trillion barrels prior to our extractions, which began in the mid 1800s. A barrel is 42 gallons. Based on records of aggregate consumption, we've used about 1.0 to 1.1 trillion barrels. This means that if both the 1.0 and 2.1 trillion figures are correct, we've used approximately half of what the earth has to offer.
The current annual global oil consumption is about 31 billion barrels (0.031 trillion barrels) and rising.
This summer I read "The Long Emergency" by James Howard Kunstler. The book was thought provoking and got me seriously thinking about the consequences of resource depletion, more specifically, the consequences of oil demand outstripping supply. What follows are my thoughts based on what I've gleaned out of Kunstler's book and the Web. I feel like I've come to know some of the players in the "peak oil" school, and what they say makes a good deal of sense to me.
In 1957, M. King Hubbard, a geophysicist working for Shell Oil, devised a way to estimate production and production increments based on extractable quantities (of oil). This graph, known as Hubbard's curve, looks roughly like a bell curve and plots the current and future annual extraction of oil over time. The curve's maximum occurs when half of the world's oil is consumed. This maximum is known as "the peak," so in this case peak oil is simply the point in time when the maximum annual oil extraction is reached. After peaking, this curve has an increasingly faster rate of descent. For those of you with a working knowledge of calculus, the first derivative (the rate of change) goes negative after the peak but more significantly, the second derivative (the rate of the rate of change) reaches an inflection point (in this case, the maximum rate of decline) within a relatively short span of time. Hubbard predicted a U.S. peak about1970. He was ridiculed during the 1960s while our domestic oil production increased,but his reputation was resurrected in the early 1970s when it became apparent that domestic oil production had peaked sometime between 1970 and 1972. The rates of discovery of new sources of oil in the U.S. peaked in the 1930s, and the rates of world-wide discovery peaked in the 1960s. Given this 40-year spread between discovery and production peaks, the worldwide proven reserves, the quantities of oil already extracted and our annual rates of extraction, it's not unreasonable to assume that we are currently near the worldwide oil peak.
To make matters more insidious, most of the oil thus far extracted is the easiest to extract and refine, namely light sweet crude, or LC. What's left are deposits of lesser quality, located in harder-to-reach places. This will make the remaining oil more expensive. To worsen matters even more, much of the LC that remains is found in places that hate us — read the Middle East. As the coup de grace, worldwide demand is rising, particularly in countries such as China and India. Since our economy is so thoroughly tied to cheap oil ($65 per barrel works out to just under 20 cents per pint), rising energy prices can be a devastating blow to our economy. If you also consider that North American natural gas is close to peaking and that much of our domestic electricity is generated using natural gas powered turbines, we could also be facing electrical shortages. The essence of this is that our economy, which is based on expansion, will contract instead. Some experts are predicting that oil costs will rise to $300 to 600 per barrel within a few years after the peak. We missed our chance to conserve oil over the past 25 years or so, an action that would have elongated Hubbard's curve. It's time to face the music.