World Without Oil
By Daniel Howden
have criticised a major review of the world's remaining oil reserves,
warning that the end of oil is coming sooner than governments and oil
companies are prepared to admit.
BP's Statistical Review of
World Energy, published yesterday, appears to show that the world still
has enough "proven" reserves to provide 40 years of consumption
at current rates. The assessment, based on officially reported figures,
has once again pushed back the estimate of when the world will run dry.
However, scientists led by
the London-based Oil Depletion Analysis Centre, say that global production
of oil is set to peak in the next four years before entering a steepening
decline which will have massive consequences for the world economy and
the way that we live our lives.
According to "peak oil"
theory our consumption of oil will catch, then outstrip our discovery
of new reserves and we will begin to deplete known reserves.
Colin Campbell, the head
of the depletion centre, said: "It's quite a simple theory and
one that any beer drinker understands. The glass starts full and ends
empty and the faster you drink it the quicker it's gone."
Dr Campbell, is a former
chief geologist and vice-president at a string of oil majors including
BP, Shell, Fina, Exxon and ChevronTexaco. He explains that the peak
of regular oil - the cheap and easy to extract stuff - has already come
and gone in 2005. Even when you factor in the more difficult to extract
heavy oil, deep sea reserves, polar regions and liquid taken from gas,
the peak will come as soon as 2011, he says.
This scenario is flatly denied
by BP, whose chief economist Peter Davies has dismissed the arguments
of "peak oil" theorists.
"We don't believe there
is an absolute resource constraint. When peak oil comes, it is just
as likely to come from consumption peaking, perhaps because of climate
change policies as from production peaking."
In recent years the once-considerable
gap between demand and supply has narrowed. Last year that gap all but
disappeared. The consequences of a shortfall would be immense. If consumption
begins to exceed production by even the smallest amount, the price of
oil could soar above $100 a barrel. A global recession would follow.
Jeremy Leggett, like Dr Campbell,
is a geologist-turned conservationist whose book Half Gone: Oil, Gas,
Hot Air and the Global Energy Crisis brought " peak oil" theory
to a wider audience. He compares industry and government reluctance
to face up to the impending end of oil, to climate change denial.
"It reminds me of the
way no one would listen for years to scientists warning about global
warming," he says. "We were predicting things pretty much
exactly as they have played out. Then as now we were wondering what
it would take to get people to listen."
In 1999, Britain's oil reserves
in the North Sea peaked, but for two years after this became apparent,
Mr Leggett claims, it was heresy for anyone in official circles to say
so. "Not meeting demand is not an option. In fact, it is an act
of treason," he says.
One thing most oil analysts
agree on is that depletion of oil fields follows a predictable bell
curve. This has not changed since the Shell geologist M King Hubbert
made a mathematical model in 1956 to predict what would happen to US
petroleum production. The Hubbert Curveshows that at the beginning production
from any oil field rises sharply, then reaches a plateau before falling
into a terminal decline. His prediction that US production would peak
in 1969 was ridiculed by those who claimed it could increase indefinitely.
In the event it peaked in 1970 and has been in decline ever since.
In the 1970s Chris Skrebowski
was a long-term planner for BP. Today he edits the Petroleum Review
and is one of a growing number of industry insiders converting to peak
theory. "I was extremely sceptical to start with," he now
admits. "We have enough capacity coming online for the next two-and-a-half
years. After that the situation deteriorates."
What no one, not even BP,
disagrees with is that demand is surging. The rapid growth of China
and India matched with the developed world's dependence on oil, mean
that a lot more oil will have to come from somewhere. BP's review shows
that world demand for oil has grown faster in the past five years than
in the second half of the 1990s. Today we consume an average of 85 million
barrels daily. According to the most conservative estimates from the
International Energy Agency that figure will rise to 113 million barrels
Two-thirds of the world's
oil reserves lie in the Middle East and increasing demand will have
to be met with massive increases in supply from this region.
BP's Statistical Review is
the most widely used estimate of world oil reserves but as Dr Campbell
points out it is only a summary of highly political estimates supplied
by governments and oil companies.
As Dr Campbell explains:
"When I was the boss of an oil company I would never tell the truth.
It's not part of the game."
A survey of the four countries
with the biggest reported reserves - Saudi Arabia, Iran, Iraq and Kuwait
- reveals major concerns. In Kuwait last year, a journalist found documents
suggesting the country's real reserves were half of what was reported.
Iran this year became the first major oil producer to introduce oil
rationing - an indication of the administration's view on which way
oil reserves are going.
Sadad al-Huseini knows more
about Saudi Arabia's oil reserves than perhaps anyone else. He retired
as chief executive of the kingdom's oil corporation two years ago, and
his view on how much Saudi production can be increased is sobering.
"The problem is that you go from 79 million barrels a day in 2002
to 84.5 million in 2004. You're leaping by two to three million [barrels
a day]" each year, he told The New York Times. "That's like
a whole new Saudi Arabia every couple of years. It can't be done indefinitely."
The importance of
* A reduction of as little
as 10 to 15 per cent could cripple oil-dependent industrial economies.
In the 1970s, a reduction of just 5 per cent caused a price increase
of more than 400 per cent.
* Most farming equipment
is either built in oil-powered plants or uses diesel as fuel. Nearly
all pesticides and many fertilisers are made from oil.
* Most plastics, used in
everything from computers and mobile phones to pipelines, clothing and
carpets, are made from oil-based substances.
* Manufacturing requires
huge amounts of fossil fuels. The construction of a single car in the
US requires, on average, at least 20 barrels of oil.
* Most renewable energy equipment
requires large amounts of oil to produce.
* Metal production - particularly
aluminium - cosmetics, hair dye, ink and many common painkillers all
rely on oil.
There are still an estimated
909 billion tonnes of proven coal reserves worldwide, enough to last
at least 155 years. But coal is a fossil fuel and a dirty energy source
that will only add to global warming.
The natural gas fields in
Siberia, Alaska and the Middle East should last 20 years longer than
the world's oil reserves but, although cleaner than oil, natural gas
is still a fossil fuel that emits pollutants. It is also expensive to
extract and transport as it has to be liquefied.
Hydrogen fuel cells
Hydrogen fuel cells would
provide us with a permanent, renewable, clean energy source as they
combine hydrogen and oxygen chemically to produce electricity, water
and heat. The difficulty, however, is that there isn't enough hydrogen
to go round and the few clean ways of producing it are expensive.
Ethanol from corn and maize
has become a popular alternative to oil. However, studies suggest ethanol
production has a negative effect on energy investment and the environment
because of the space required to grow what we need.
Oil-dependent nations are
turning to renewable energy sources such as hydroelectric, solar and
wind power to provide an alternative to oil but the likelihood of renewable
sources providing enough energy is slim.
Fears of the world's uranium
supply running out have been allayed by improved reactors and the possibility
of using thorium as a nuclear fuel. But an increase in the number of
reactors across the globe would increase the chance of a disaster and
the risk of dangerous substances getting into the hands of terrorists.
© 2007 Independent News
and Media Limited
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