13 Jun 2008
Peak Oil?

There's not gonna be a lot of links in this post - I'll let Google do my work for me in that regard. Besides, the main thing I want to comment on here was from the Today show, just a few minutes ago, and isn't available online (yet, if at all).

There are few folks who think that our supply of fossil fuels is infinite - just about everybody except Young Earth creationists and Flat Earthers understand that the planet is just not making any more oil, coal or gas, or if it is it's not making it fast enough to be usable in the foreseeable future. The real question here is not whether there's going to be a "Peak Oil" emergency, but when.

On the show, the chairman of BP-Amoco was pleading to the public to allow Congress to open up the Arctic National Wildlife Refuge for drilling and exploration. As well as more offshore areas (of course). To bolster his case, he stated that the proven reserves there would last the world until 2040 at current consumption levels.

It was the last part of that sentence that piqued my interest. "At current consumption levels". Unfortunately, "current consumption" is a moving target:

Preliminary data indicate global oil consumption rose by about 630,000 bbl/d during the first quarter of 2008 compared with year-earlier levels, much lower than the 1.0-million-bbl/d growth expected in the previous Outlook. Most of this downward revision occurred in the OECD countries. With this revision, OECD consumption during the first quarter is estimated to have fallen by 460,000 bbl/d from year-earlier levels, with the declines concentrated in the United States. Consumption in the other OECD regions was flat during the first quarter, with European consumption increasing relative to year-earlier levels only because warmer-than-normal weather led to unseasonably low consumption in first quarter of 2007. OECD consumption is projected to decrease by 240,000 bbl/d in 2008 and increase slightly in 2009.

In contrast, consumption in the non-OECD countries is projected to grow by 1.2 million bbl/d in 2008, led by China, India, and the Middle East. Continued economic growth, fuel subsidies, and increased oil-fired power generation are supporting increases in non-OECD oil consumption. Efforts to ease subsidies in some non-OECD Asian nations such as India and Indonesia could eventually lead to higher prices in those countries and lower overall non-OECD consumption growth. However, China represents the single largest source of world oil consumption growth in our forecast, and that country has not yet begun to remove price subsidies.

    link June 10 2008 EIA Report

Taking the chairman at face value then, and projecting rates of growth comparable to today would yield an oil supply that is already seriously strained (doh!) and that will definitely be on the downslope by 2015. That's a mere seven years, not 30.

The question is what to do about it. I have no doubt that as energy prices contrinue to rise and supplies dwindle that we will open up ANWR, offshore and Coney Island to drilling. I don't have much faith in oil companies to invest in alternate energy sources - they're way too focused on next quarter's P&L to worry about 5 years down the road. And government planning is an oxymoron in and of itself.

While I might have just become a "Peak Oil Believer", that doesn't make me a doomer - I don't think this necessarily portends The End of the World As We Know It, the Apocalypse the Collapse of Western Civilization. There will be effects, no doubt. But what they will ultimately be and what to do about it, well, that's something I'll be thinking about a good deal of the time.

07:04 /Politics | 1 comment | permanent link