Abundant and cheap oil has played over the last century and a half (150 years) an almost magical role as booster of world economy, but the lack of fuel by depletion or high prices can bring disastrous consequences to the planet.
The other day, busy searching for figures and data of interest to readers and to back this article, I put a simple question to Google search which frequently complains by my using too many words and not the key words necessary to find what I am looking for: How much oil is left in the Planet? I then pressed enter.
To my surprise, the PC answered immediately, not with the usual zero results for your search, but offering me one million 510 thousand entries, approximately, in Spanish and English on that topic.
The second surprise was that from the first entries, out of the million and a half offered, one realizes that no one knows, exactly, the answer to that question.
Some estímate there is oil left for another 100 years, while others think the amount of hydrocarbons left in existing deposits will not last over 40 years.
"That is a question whose answer changes every year," "oil is not depleted," "there is oil for another 140 years." "There are still many million barrels and nobody will extract the last of them because of the high cost."
From 50 or 60 entries reviewed by me, that is the line followed by answers and analysis on that topic, presented by organizations-org.com, indicates the address given by Internet- and in fact there are private, semi-private, state-run entities, but they were composed mostly by persons who benefit from the occasion to present their own thoughts and don�t have the academic studies or the financial resources as to conduct field studies in exploitation oil fields.
That is too expensive and requires company or official permits which are not easy to obtain. However, studies are carried out.
When an analyst is backed up by universities or prominent news media, things can go forward.
For example, the National Geographic Magazine in Spanish published in its July issue an article by analyst Paul Roberts: "A World of Oil" in which that institution puts forward its stand on this debate. It never supports a depletion forecast, nor it gives dates, but accepts that "the era of cheap oil is over."
About the question posed at the beginning of my article, the German entity Energy Watch Group (EWG), in a part of its Report 2006, it provides the following estimates on oil reserves:
According to figures given by the oil industry in their report IHS 2006 world total reserves amounted to 1. 255 gigas of barrels of crude (one giga is the unit followed by nine seros) and this figure could be read as a trillion 255 billion barrels.
The EWG bases its calculations on real production, not on the tricky figures of proven and probable reserves, which have shown to be unreliable, as it was shown when in 2006, the powerful Anglo-Dutch firm Royal Dutch Shell had reduced its declared reserve figures by 30 percent "after a re-evaluation to real crude volumes in its oil deposits."
So, EWG estimates amount to only 854 gigas (billions of barrels).
There is no single figure recognized by all countries. In 2007, the International Energy Outlook published every summer by the US Department of Energy, affirmed the global production of all liquid fuels extracted from earth would reach 107.2 million barrels per day in 2030, a significant increase compared to the 81.3 million barrels per day produced in 2006.
Only two years later, however, in 2009, the last edition of this report finds that figure for 2030 was painfully reduced, projecting a production of 93.1 million barrels, that is 14.1 million barrels les than their previous forecast.
This document adds that even if a greater increase were added to non conventional fuel extraction there would still be a net increase of 11.1 million barrels in world liquid fuel availability compared to the increase projected by the IEO report.
World "Oil Peak" (Subtitle)
The question about the depletion of world oil wealth picked up steam in October, 2007, when British daily The Guardian published a study of German entity Energy Watch Group, which says that the peak of world oil was crossed back in 2006. If that were so, that means that half the oil we inherited from remote geological eras was already consumed. After that, we entered a statistical plateau during which maximum production level is maintained, but can no longer be surpassed.
That plateau is of different extension, according to the type of exploitation of each deposit and its size. Thus, after some time production will start to fall in the profile of a bell, called the Hubbert curve, named after Geologist M. King Hubbert, who developed that technique to determine when an oil peak is reached.
Hubbert correctly forecasted, at the end of the 50s of last century, that the United States would reach its oil peak by 1971.
The EWG affirms that after crossing the peak, the yearly drop will amount to several percentage points until 2020 and even more by 2030, year in which the supply will be dramatically low, creating a gap in offer that will be hard to close with the even increasing supplies of other fossil fuels, from nuclear sources or renewable energy sources in the time period separating us from the decades of the 20s and 30s.
The German research group adds in its conclusions: "The world i son the verge of structural change of its economic system. This change will be unleashed by declining fossil energy supplies and will influence almost all aspects of daily life." In the final paragraph, the EWG report says: "Until recently, the International Energy Agency (IEA) which groups only the richest and most developed countries, denied the possibility of this fundamental change happening in the near or middle term. The IEA message concretely affirms business will be as usual in the future, sending also a false signal to politicians, to industry and consumers, without forgetting the media," expressed sharply the EWS in its already famous study on the oil peak.
Until recently, officials of the US government made fun of the idea of an imminent peak in oil production or that we should anticipate a contracti8on in availability of oil in a near future.
"We expect that the peak in conventional oil will be closer to half the 21st Century than the first decade of this century," emphatically affirmed an IEA report of 2004."
Consistent with this concept, the IEA reported the following year that global production will reach 122.2 million barrels per day in 2025, over 50 percent more than the level reached in 2002, that was 80 million barrels a day.
In July, 2009, the Agency revised again its figures on oil demand in 2007 and 2008 to place them in 85.8 and 86.8 million b/d, respectively, according to its report that month, where it stresses that it is based on unreliable figures of "Proven" and "Probable" reserve figures.
As you can see, there are several figures of international and US organizations to be considered.
Also, the Spanish publication "Cinco Dias", in contact with industry specialists of the energy sector, published in its Internet website that "In 2002, there were left in the world from 990 billion to 1.1 trillion barrels of crude to extract. That means that at the rate of that year, those reserves will end by 2043.
The 21st Century is Brimming with Super difficulties (Subtitle)
Without having concluded its first decade, the 21st century announces that humankind will have to face serious difficulties, never before experienced that can put to the test its own survival.
Global warming and its main cause and accelerator, environmental pollution with hothouse gases, joins the lack of drinking water to calm the thirst and thousands of other agricultural and industrial needs of the six billion human beings that now inhabit the planet, figure that would rise to nine billion by the middle of the century.
To worsen the situation, the intrinsical defects of the capitalist system have it sunk into one of its worst crisis which no one dares forecast how long it will last o r how big will be the consequent reduction of productive and commercial activity with its sequel of massive unemployment and rise in world poverty.
This group of crises, all inter-related, cannot leave out oil depletion, the main fuel of modern economy whose only deficit can modify all our lifestyle.
Dangers to the End of Cheap Oil (Subtitle)
There are those who refer to and even accepts that the era of cheap oil has come to an end, but even without reaching the extreme of total depletion, who needs expensive oil? Oil companies and the coffers of oil exporting countries could be the answer.
But this is a not well meditated answer. Oil exporting countries are for the most part third world nations and importers of machinery and technology from its partners, as well as food products.
If high oil prices are here to stay, everything will go up and imports for oil and gasolina suppliers will have to render them many times over when buying industrial products, food, medicines, health service contracts, transportation and communications.
Besides gas and oil, hydrocarbon s is the fuel that moves power plants, is used to pave streets and roads and is the main raw material for thousands of chemical and industrial processes.
All that because it is also cheap. Imagine at the gas station paying 50 euros for the liter of gasoline Premium and 30 for the Regular type. But it will reduce environmental pollution some will cry. Some minds will want to return to dirty coal like those of George W. Bush and Dick Cheney, strong stockholders of oil companies, who will try to justify wholeheartedly the use of basic food crops like cereals, to produce etanol, which mixed with oil gives a less-polluting fuel than current gasolina, so they say.
For Bush and company, it does not matter that food prices go up or that the diet of the poor deteriorates even more. All is done for the noble cause that motorists have always their tanks full.
Oil has not yet surpassed the limit prohibited to majorities. But crude has shown that any further price hike would make almost everything more expensive. So permanently expensive oil would bring severe economic and social woes, deepening divisions between social clases. There will be lighted-up neighborhoods with electricity and others with candles. Public transport will be bad and expensive, taxis will disappear together with many products manufactured from oil by-products.
Although near depletion of hydrocarbons and its price hikes seems to be one of the crises, it is not simply just one more. Many analysts and politicians consider it could be the most important one. It is already one of the most worrying and polemic issues and when it comes, it will not be solved then with speeches. Now is the time to go ahead to prevent its most damaging impacts.
OPEC and China�s Balancing Effect (Subtitle)
Inside the dramatic outlook of global recession in the fall of prices, the cuts made in export quotas approved by the Organization of Petroleum Exporting Countries (OPEC) since last year and in volumes of over two million barrels per day, as well as the increasing demand from China, which between 2002 and 2007 absorbed over one third of the rise in consumption, have played a very important role in containing prices.
India is joining the new big hydrocarbon consumers and Mexico was announced -without confirmation- that in 2012 it will withdraw from being an exporter of crude. All this will be good to maintain price stability, but in many cases, it also means that global recession has already inflicted serious damage to many economies which will not be easy or quick to repair and recover their 2007 productivity levels.
A consultant firm specialized in commercializing oil extraction and refinery equipment in March of the current year said: "The price of oil has fallen abruptly because, in the last four months of 2008, demand has collapsed abruptly due to the appearance of a terrifying global recession. It is not probable it nears the exceptional prices of the beginning and middle of 2008 until demand picks up and the global offer of oil is contained. No one can foresee when this will happen.
"Contraction of international demand has been astonishing. After rising during much of the last boreal summer, demand collapsed at the beginning of autumn, provoking a net descent in 2008 of 50,000 barrels per day. The US Department of Energy (DOE) forecast for this year predicted a fall in demand of 450,000 barrels per day, "the first time world consumption descends for two consecutive years."
"Today industry is weighed down by excessive production and insufficient demand, an unfailing combination for the collapse in prices. Not even the December 17 decision by part of the members of OPEC to reduce their collective production by 2.2 million barrels per day, has achieved to significantly increase oil prices.
"According to most analysis, the imbalance between demand and supply will last until mid 2009, if not until the end of the year. There are others that suspect real global recovery will not come until 2010 or later still. It all depends on how deep and lasting is this recession," concludes the most debated forecast of the last two years.
Source: Carlos A. Sanchez (La Presna Latina)
August 09, 2009
