Right before the end of the millennium, the clues started piling up. The world had been scoured many times over in the quest for the ultimate bounty, gushers of light sweet crude. Discoveries of new oil had peaked in the decade of the 1960s and had been falling ever since. Supergiants, the oilman's term for those wells capable of pushing out a million or more barrels a day, were no longer being found, and the ones in extraction were starting to accelerate in their decline, from Prudhoe Bay to Ghawar Field to Cantarell Field. Sure, there was other "oil" out there, but it was trapped in very deep water, or stuck in tight rock formations that had to be fractured at great expense for the oil to come out. These plays could be worked, but only if the price of oil stayed very high, and even then the flow rates would never match those of the supergiants and giants that the world depended on for its tens of millions of barrels required each day for the economy to keep humming.
So former oil geologists like Colin Campbell and Ken Deffeyes started ringing the alarm bell. "Hey!" they shouted at the top of their lungs, "we can't maintain this flow of oil forever! Even if we use all the non-conventional sources like tar sands, Arctic oil, etc the amount is going to get less and less over the course of this century. And those other kinds of oil are a lot dirtier and carbon-intensive than the oil we've been using!"
What did they predict? And how close were they to being right? Let's take a quick look, lest we get overwhelmed with the cornucopian hyperbole that bombards us every day.
The price of oil will rise dramatically, possibly by an order of magnitude.
Check. Got that one right. Oil went from $10/barrel in 1999 to about $100/barrel today. Suddenly that made all that hard-to-extract oil that we'd known about for decades in places like Alberta and North Dakota look attractive.
Extraction will plateau for a decade or so as conventional oil starts to dwindle and we throw everything we can at unconventional sources like tar sands, tight oil, ultra deep water, etc.
Check. In 2004, production reached 73 million barrels per day (mbpd). Annual average expenditures on oil exploration doubled from 2004 to $600 billion annually in 2012. For doubling our cumulative effort at oil extraction, we've managed to raise production to 75 mbpd, as the oil price has tripled since 2004. It seems logical to assume that an additional two million barrels a day global increase will require another doubling of expenditures and another tripling of prices, which would mean $10/gallon gas here in the U.S. China increases its daily oil consumption by two mbpd about every four years.
The economy will contract and enter a period of stagnated growth. More vulnerable economies will crash profoundly.
Check. U.S. employment has yet to reach its 2008 levels. Economies like Greece and Spain have collapsed by as much as 25 percent.
Oil exports will begin to fall, especially as the price rises and extracting nations becoming richer, because this means they will be wealthier and consume more of their own oil.
Check. Worldwide oil exports peaked in 2006 at 45.6 mpbd and have declined by over 2 mbpd since. Saudi Arabia has the highest growth rate in oil use. Consumption has risen by one mbpd to almost 3 mbpd over the last decade, and exports have fallen by over one mbpd. If current trends worldwide continue, available oil exports could reach zero by around 2032. Currently the U.S. extracts about seven million of the 18 million barrels of oil we use, so assuming we could hold extraction at that level, we would need to cut oil use by two-thirds in twenty years.
New resources will be more expensive and carbon-intensive.
Check. The previous assumption of maintaining oil extraction in the U.S. is very unlikely to hold true. Deep water and tight oil (like what comes from the Bakken and Eagle Ford) have extremely high depletion rates. Deep water wells deplete about 10-20 percent a year. Tight oil depletes at about 40 percent annually the first few years. Think about that latter number, where most of our new oil extraction is coming from. What if you had a part-time job but within two years you would only be making about a quarter of your current income. Probably need a new part time job, right? But that one does the same thing. Before you know it, you need 40,000 part time jobs. But even that doesn't help, because they're all still depleting at 40 percent. Give a thought to how much you would have to work to maintain your original income after five years, then ten years, then twenty years... How many of you out there are thinking you'll eventually end up rich? Well, if you're an economist or work for an oil lobby like CERA or API, you're totally convinced you've hit the jackpot. But don't let their malarkey and access to primary media outlets jam up your ears and eyes so bad you can't see the truth.
Oil extraction worldwide is peaking right now, and the sources of oil we're turning to are much more carbon-intensive than the ones we're leaving, meaning even if we use the same amount of oil and gas, we're still increasing our rate of adding greenhouse gas poisons to our atmosphere. You know, our atmosphere -- that invisible thing all around us that keeps us and everything else on our planet alive? Friends, readers, don't believe the hype. The age of oil is coming to an end, but this can be a very good thing if we realize it and make forward-looking choices to leave this dark cloud of exhaust behind us. The sooner we make a commitment to transition our economy to renewable energy, the better off we'll be in every respect.
Stephen Hren is the author of Tales from the Sustainable Underground. Find more at www.earthonaut.net.