Peak Oil is You

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Page added on April 27, 2010

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Depletion of fossil energy resources


Depletion of global fossil oil resources has been the theme topic of the world economic and political circles over the past decades, particularly in consumer countries in Europe and America. This has also been a source of great apprehension in those countries. The heart of their discussion is about the alternate sources of energy when the fossil oil resources are used up? Of course, how the alternatives can be exploitable, while being economically cost-effective, are the key factors in coming up with conclusion and making decision on the part of consumers.

Over the past several decades, the consumer countries have been weighing up the use of other resources, or substitutes, such as solar, water, wind, nuclear. Although huge research works have been done, it sounds a serious steps has not been taken yet; mainly because there have been gigantic amount of this noble energy carrier, namely the oil, and it has been rather cheap and comparing with other substitute resources being highly cost effective. So all this have made weak incentives for the use of other resources.

On the other hand, the consumer countries particularly Westerners have made their best endeavors to optimize of the existing fossil energy resources, aiming at protracting the lifespan of the said reserves. Moreover, the oil rich countries, being heavily dependent on incomes from oil exports, are concerned of decline and depletion of oil resources. Certainly with exhausting their oil resources, these countries also need the energy carriers to continue and develop.

Having all these facts in mind, it is pretty fair to elaborate briefly on the amount of remaining fossil resources and the relative lifespan of them and also study the viewpoints of different people concentrating on the matter in question.

Much estimation has been made on the existing global oil resources. However, we have to be cautious accepting them for sure. Some of the energy research institutes working on the subject, based upon scientific and technical standards have put forth various figures. They argue that those figures are relatively acceptable and proper; whereas a number of oil rich countries, being keen to overestimate their wealth and eventually their oil resources, give the figures that are widely different with those suggested by the said institutes. In other words, these countries are exaggerating their oil resources.

For instance, the United States Energy Information Agency (EIA) has estimated that the existing proved global oil resources are 1342/2 billion barrels in 2009. Albeit, there are unproved resource that have not been included in this estimation. The EIA also reports that the global daily oil production has amounted to 85 million barrels at the end of 2007.Undoubtedly, world daily production has experienced some fluctuations ever since Dr. Colin Campbell, a well known British geologist who has made good researches on fossil oil resources, has a relative similar estimation of global oil resources to that made by the EIA. He also has predicted that if the oil production continues at the current trend, the world oil resources will be depleted within the next four decades.

The members of the Organization of Petroleum Exporting Countries (OPEC), however, have their own estimations which differs to those made by the EIA. They do believe that there are still huge oil resources in their territories that have not been tapped and exploited. However, with elapse of time and advances of technology, certainly the exploitation of untapped resources will be possible and thus prolonging the lifespan of fossil oil.

According to reports, however, Oxford University scientists, in response to international energy organizations (including producers and consumers), suggested that oil reserve estimates are overstated but have been accepted by public agencies that compile statistics on oil and energy. The researchers have warned that organizations like the International Energy Agency (IEA) and the Energy Information Administration (EIA) are aware that OPEC’s estimates are misleading, and could be failing to prepare governments for the oil shortages and price spikes that would accompany “peak oil.” The Oxford researchers said that estimates of global oil reserves are “exaggerated by one-third,” and that conventional oil reserves amount to only 850-900 billion barrels — not the 1.2-1.4 trillion barrels that are currently estimated. The researchers wrote that the errors in statistics of oil reserves are “broadly acknowledged but not taken into account due to political sensitivities,” saying the IEA couldn’t afford to give unpleasant information to Western governments that pay its bills: “The IEA…has to keep its clients happy.”

It is noteworthy that in connection with oil reserves estimation and depletion of resources, different people have given various presumptions and formulas. By and large, the formulas are based on the principle that with the continuation of exploitation of oil, either in a country or in the world, the production will reach a point, which is called “peak”. It means that the production will not and can not surpass that point. From that point on, the production will gradually slope down until the resources are completely used up in a span of time, depending on the geology position and the amount of left resources. It was Dr.King Hubert, American geologist during 1950s, who for the first time put forward the “peak theory.” Hubert is most well-known for his studies on the capacities of oil fields and natural gas reserves. He predicted that, for any given geographical area, from an individual oil field to the planet as a whole, the rate of petroleum production of the reserve over time would resemble a bell curve (see Hubert bell curve below). Based on his theory, he presented a paper to the 1956 meeting of the American Petroleum Institute in San Antonio, Texas, which predicted that overall petroleum production would peak in the United States between the late 1960s and the early 1970s. At first his prediction received much criticism for the most part because many other predictions of oil capacity had been made over the preceding half century, but these had been based purely on reserve and production, data rather than past discovery trends, and had proven false. Hubert became famous when this prediction proved correct in 1970.

Nevertheless we have to be cautious accepting this theory. Because, as mentioned before, the lifespan of oil is subject to several variables. Certainly with technological advances, it is quite possible it will extend the lifespan of oil reserves. Moreover, developments of alternate energy resources make it possible to help with optimizing the fossil resources and the new discovered energies may substitute the oil.

The last but not the least, now that depletion of fossil oil is unavoidable, it is for all countries to take stock of their experiences trying their best to study the ways and means for finding the alternate energy resources; and certainly their cooperation and interaction is pretty instrumental and vital — because their future is quite dependent on energy. The point is that in spite of cooperation and interaction between fossil oil producers and consumers, their vision is a little different when they think of substitute energies. Fossil oil rich countries, mostly being single-product economies, look at their resources as the capitals of future generations. Depletion of this wealth is not only a bitter fact but a catastrophe. Evidently, they have to be concerned of infrastructures by which they can find new energy resources. And it is their undeniable right to be anxious of the future; when you use up your wealth, you need to be farsighted. On the other hand, the big consumer advanced countries have the most global wealth and now are taking steps to get access to substitute energies and they also possess the lion part of renewable energy resources. It seems that only when the global fossil reserves sloping down on the bell curve, they are just offended because of losing a cheap energy carrier. Then these countries will take advantage of what they have compiled. Now it is the ex-fossil oil rich countries that are anxiously waiting for the substitute energy prices to be posted by the rich countries.

This perception is more warning than just being pessimistic. Economical and industrial developments are at the mercy of energy resources. So the efforts of the mankind should be centered on discovery and optimizing of energy resources. This is a fact that if the renewable resources be made properly known and optimized, the share of fossil energy will be only 7 percent of the global resources.

Abdolreza Ghofrani is a senior international and economic expert.

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