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  PlanetSave 6 Jan 06
Are We Reaching the Peak of Oil Production?
Written by E Magazine

The January/February 2006 issue of E – The Environmental Magazine (now posted at www.emagazine.com), takes a close look at one of the key issues of our time: “Is the world running out of oil?”

Ask that question and the geologists and strategic planners will say you’re missing the point: We'll no more “run out of oil” than we will run out of water in the ocean. About half of the world’s known reserves are still in the ground.

The real issue, they say, is when the planet will reach the peak of oil production, after which a slow decline will inevitably clash with the demand that now grows two percent per year.

Finally, they add, we'll stop producing oil altogether because it will become uneconomical or because technology will have moved on, not because we've pumped out the last drop.

We've reached a dramatic crossroads, with highly credentialed experts coming to diametrically opposite conclusions about the future of the world’s oil supply. With consumers paying $2.50 or more for a gallon of gasoline at the same time ExxonMobil and other oil producers are raking in the largest corporate profits in history, we’re at least finally paying attention.

So, are greedy oil companies manipulating us? Or is the shortage very real, demanding an abrupt about-face after more than 100 years of heavy reliance on a constant supply of relatively inexpensive oil?

Unfortunately, the more you talk to experts and immerse yourself in technical data, the more confused you become.

Unlike the debate over climate change, which the skeptics lost long ago, the war of words over peak oil is still very much raging, with solid science on both sides.

But one conclusion is irrefutable: The age of cheap oil is definitely over, and even as our appetite for it seems insatiable (with world demand likely to grow 50 percent by 2025), petroleum itself will end up downsizing. And it’s unlikely that the high oil prices of 2005 will be a bubble, as was the 1970s fallout from the Arab oil embargo.

Today, not only is oil getting harder to find in economically viable forms, the use of what remains is contra-indicated by the hard reality of global warming. Even if we had ample oil, in the long run we need to switch to renewable sources, anyway.

When will oil peak? A growing body of oil company geologists, oil executives, and investment bankers, including the influential American geologist L.F. Ivanhoe, see it happening by 2010. The Department of Energy (DOE) has given various estimates, ranging from 2016 to 2037.

But many oil companies are skeptical it will ever happen, putting faith in higher prices and new technology. But exploration will have to be very productive indeed to keep up with world demand, which the Defense Department’s Energy Information Administration (EIA) believes will grow from 82 million barrels per day in 2005 to 118 million barrels in 2025.

Because our way of life is so intimately connected to cheap oil, critics like James Howard Kunstler, author of The Long Emergency, see a profound realignment of society ahead: “We are going to have to live a lot more locally and a lot more intensively on that local level,” Kunstler says.

“Industrial agriculture, as represented by the Archer Daniels Midland/soda pop and Cheez Doodle model of doing things, will not survive the end of the cheap oil economy.”

E’s story is comprehensive, examining all the major prognosticators on peak oil, both “pro” and “con.” It is accompanied by companion pieces that examine: oil sand production in Canada and the environmental destruction it has caused; the prospects for bio-diesel and other alternative fuels, including hydrogen; and the real promise of energy conservation, which Dick Cheney called “a sign of personal virtue, but not a sufficient basis for a sound, comprehensive energy policy.” He was wrong.
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