Peak Oil News: What will happen if the world runs out of oil?

Thursday, June 08, 2006

What will happen if the world runs out of oil?

...The United States military is preparing for a world of disappearing oil supplies...

By Dan Denning

- "Even without taking into account related problems like the greenhouse effect," writes Nadaer Elhefnawy, "the security problems posed by the exhaustion of supplies of easily accessible, cheap oil and gas are highly varied and daunting. The likely result would be the exacerbation of familiar problems like resource conflict, weapons proliferation, and state failure. However, other problems are more novel, not least of all the potential for changes in the international balance of power based not only on which countries control the lion's share of the world's fossil fuel supplies, but which are most dependent on those supplies."

What will happen if the world runs out of oil: Shifting the power balance

- In other words, a soaring oil price would not simply boost the cost of cruising Humvees across the deserts of the Middle East, it would also threaten to shift the balance of economic and military power away from energy-deficient countries toward energy-rich countries...many of whom happen to be sworn enemies of the United States and Britain.

- Enter coal...the newest old thing. Britain effectively stopped mining her reserves two decades ago. But the United States possesses a 250-year supply of this fossil fuel. By comparison, America's proven oil reserves amount to less than a 4-year supply. It was once said of coal, "With coal, we have light, strength, power, wealth, and civilization; without coal, we have dankness, weakness, poverty, and barbarism." We suspect this observation will ring true again in the future.

- Coal, like oil and natural gas, is a form of "solar income." As Barbara Freese points out in her must-read book, 'Coal: A Human History'. "For billions of years," Freese writes, "almost every life form on earth depended for its existence on energy fresh from the sun, on the 'solar income' arriving daily from outer space or temporarily stored in living things."

What will happen if the world runs out of oil: The Earth's solar panels

- The ancient forests of the Earth were actually huge solar panels. They just didn't know it. And neither did they know the critical role they would play in powering the economies of today.

- "Like living solar collectors handily dispersed all over the planet," Freese continues, "plants capture sunshine as it arrives and covert it into chemical energy that animals can eat. And plants don't just convert energy, they store it over time — holding that energy within their cells until they decay, burn, or get eaten (or in rare but important cases, are buried deep within the planet as a fossil fuel.)"

Subscribe to The Daily Reckoning

- It takes a long time to crunch a tree into a lump of coal. But the carboniferous (coal-bearing) period of the Paleozoic Era was around 300–360 million years ago. Mother Nature works long hours. And if her work seems tedious, we can at least be thankful that the end result has produced so much energy.

What will happen if the world runs out of oil: Stored energy

- But using millions of years of the stored energy of the sun — energy essentially locked in the great plants and forests of previous geologic ages — is a fairly new thing for human beings. It's only in the last several hundred years that we've been burning what the Earth took millions of years to produce...and this geologic dowry is depleting rapidly. Here's what the US Army's Engineer Research and Development Center concludes:

- "The days of inexpensive, convenient, abundant energy sources are quickly drawing to a close. Domestic natural gas production peaked in 1973. The proved domestic reserve lifetime for natural gas at current consumption rates is about 8.4 years. The proved world reserve lifetime for natural gas is about 40 years, but will follow a traditional rise to a peak at about 2035 and then a rapid decline. Domestic oil production peaked in 1970 and continues to decline. Proved domestic reserve lifetime for oil is about 3.4 years. World oil production is at or near its peak and current world demand exceeds the supply. Saudi Arabia is considered the bellwether nation for oil production and has not increased production since April 2003. After peak production, supply no longer meets demand, prices and competition increase. World proved reserve lifetime for oil is about 41 years, most of this at a declining availability. Our current throwaway nuclear cycle uses up the world reserve of low-cost uranium in about 20 years. We will see significant depletion of Earth's finite resources in this century."

- But coal remains very plentiful...relatively speaking. And at current rates of consumption, you could say that the United States is the Saudi Arabia of coal - which is one very good reason why America will likely devise ever-more-ingenious ways to utilize it.

- If the alternative to exploiting the US's coal resources is an open-ended military engagement in the Middle East, I suspect there's going to be a lot of support for developing the only significant energy resource America still possesses. Later this week, we'll take a look at how readers of The Daily Reckoning can exploit it for profit...


Dan Denning
for The Daily Reckoning


At 4:45 AM, June 09, 2006, Anonymous alf mcguiness said...

pssst... here's a tip for ya. bet on Dinosaur Bones in the final race. The odds are a killer.


Post a Comment

<< Home