According to Daniel Yergin, from 2004 through 2010 production capacity will likely grow from 85 million to 101 million barrels per day.
America has no shortage of oil…Washington, DC has a shortage of the
political will required to let American workers go get it.
– Rep. Richard Pombo
With oil prices reaching record levels, the left is up to its old tricks, blaming the President and calling for lots of expensive big government “solutions.” As part of this push, they argue that we're running out of oil. But clearly, this argument is not new — and it's dead wrong.
In 1874, Pennsylvania's state geologist fretted that America had only a four-year supply of oil left.
He was wrong.
In 1914, Washington claimed we had only a ten-year supply.
It was wrong.
In 1940, the government announced that reserves would be depleted within 15 years.
Wrong again.
In 1977, President Jimmy Carter lamented that within a decade, we wouldn't be able to import enough oil, "from any country, at any acceptable price," to meet our needs.
Hardly shocking, the peanut farmer from Plains was wrong too.
Truth be told, the world's estimated oil reserves grew from 60 billion barrels in 1920 to 600 billion by 1950, 2,000 billion by 1990, and 3,000 billion by the year 2000. And in the next few years, they'll keep rising.
Why? Because when demand increases and prices rise, companies explore for more. When oil is cheap, they don’t. Why should they?
According to Daniel Yergin of Cambridge Energy Research Associates, from 2004 through 2010, production capacity will likely grow from 85 million to 101 million barrels per day, a 20% increase. This forecast is based only on projects already under development.
So the gloom-and-doomers are about to be shown up again.
It’s not just exploration either. The left consistently underestimates the power of human ingenuity – given sufficient price incentives — to devise new technologies which expand supply.
But in fact, researches say that today — right now — we could extract 150 billion additional barrels of domestic oil just by utilizing specialized software and low-cost supercomputers, 175 billion barrels locked in Canada's oil sands, nearly 300 billion barrels — that we know of — below the world's oceans, 377 billion barrels trapped in existing oil reservoirs, and a mind-boggling 2.6 trillion barrels embedded in oil shale across western Colorado and parts of Utah and Wyoming.
Altogether, that’s more than the entire world’s “proven reserves” estimates put together; and that’s before we do any new exploration.
Given our high crude oil prices, it's now profitable to do all of this and more. And once done, prices will fall again, just as they did in the 1980s.
But that may not be all. What if oil isn't a scarce fossil fuel derived from dead dinosaurs, but a plentiful resource from inorganic material embedded in the Earth's crust: basically a liquid rock? Joseph Stalin’s scientists thought so, and by employing this "abiotic" theory of oil formation, the old Soviet Union found numerous oil fields where Western scientists said little or no oil could exist. Their theory has received greater attention in the West in recent years, most notably from the late Cornell astrophysicist Thomas Gold, and if true, would mean that the world is literally floating on a sea of oil deep in the Earth’s core. There might even be oil in space!
The “Limits to Growth” crowd rejects this out of hand, of course; but it doesn’t really matter. Either way, the environmental extremists are mistaken:
There is no oil shortage.
There's plenty of oil, even for the 2.5 billion consumers in rapidly industrializing India and China.
Those countries’ unprecedented consumption has driven up prices for now, but this will only unleash the supply needed to bring them right back down.
So what about today? How do we lessen the magnitude of price hikes?
Remember those environmentalists who've wailed about supposed oil scarcity?
They’ve reduced available supply — and therefore hiked prices — more than anyone else.
They've blocked offshore drilling. They've blocked drilling in Alaska's ANWR. They’ve even come up with the most ludicrous political slogan of all time, “you can’t drill your way to lower prices.”
They oppose drilling, period. And through their draconian rules and regulations, they’ve stopped even one single new refinery from being built in America in more than a generation.
The result? Needlessly higher prices for everyone, especially the poor northeastern widows and African villagers for whom they endlessly claim “compassion.”
Isn't it time America stood up to these extremists?
From his first days in office, President Bush has done just that.
It’s time we stood up for him. George W. Bush believes in markets, entrepreneurship and human potential. Democrats believe in fear and “redistribution.” And anyone old enough to remember Jimmy Carter should know which course actually works.
Right in substance, wrong in specifics.
a) In 1940, it was announced that certain domestic oil fields would be depleted, and they were. Others were then found, mostly off-shore or in the middle-east
b) You have addressed supply but not demand, or the rate at which we can expand supply. We will be able to build supply back up, but in the interrim we can expect some shortages.
c) The Soviet claims to having found and developed abiotic oil were proved false. There is still no corroborting evidence anywhere to demonstrate abiotic oil has any validity. Moreover, if it was valid, most of the oil we have so far found would have been abiotic in origin with distinct characteristics that identify it as abiotin and not fossil. If abiotic oil were real, it should have been showing up everywhere. Proponents changed their story here to cover their tracks, now insisting it must be trapped under basaltic rock. Abiotic oil does not explain the various forms of oil from peat to coal to tar to wax to oil to fuels. Fossil remains are decay products that are easily explained by actual finds, abiotic oil is not. The lighter components of abiotic oil (i.e., light crude) would have boiled off long before reaching depths we can access it and be well separated from the heavy components. This is not what we find. If abiotic oil exists at all, it will be very deep and under dense formations of basaltic rock. This would make it more expensive in energy consumption to access than we would get out of it, and has nothing to do with the relative economics of a future cost of oil. As much as I’d like to believe in abiotic oil, I have conclude this one’s a pipe dream.
The other problem with abiotic oil is how fast it can replenish. So far the evidence is (even supposing it exists) it can not keep up with demand at depths that make it economic. We see no abandoned fields filling up more than would be explained by simple ground seepage in a depleted field. Possibly it will provide a resurgence of oil use over recurring short periods, but will never be economic for a sustained oil economy.
e) If environmentalist and peak-oil advocates are saying we are seeing the end of oil, they are making a claim they can’t yet prove; and for much of the same reasons you have cited. If they are saying this is the end of cheap oil, there’s a better than a 50/50 chance they are right. Oil has been held at about the same price (adjusted for inflation), not so much by how much is there as by how much it cost to lift, transport, refine and deliver. At some point, the easy to reach and easy to refine stuff is gone. It turns out, these are one and the same. The lightest, easiest to refine stuff is at the top of each oil seam. When that is gone, we are down to tar-sand oil, shale oil and sour oil. All three take more energy per barrel refined. Tar and shale require more energy to lift and crack.
Some of the data you have cited is based on estimates of total oil in the ground, more than half of which may be uneconomic to recover. The data we have today on known reserves and estimates of oil we are merely guessing is there is much better than it has ever been in the past. 50 years ago, an oil geology specialist named Hubbert accurately predicted that oil production in the continental U.S. would soon peak. He was not saying oil had peaked. He said the oil that it would be economically feasible to lift, crack and refine by whichever method would peak by 1970. He was off by only one year, and there have been no significant advances to change that model since.
Others have taken Hubberts model and applied it globally. There first couple of passes had some glaring mistakes demonstrating an agenda was driving their calculations. Although this discredited the particular people making the claim all oil production would peak in the 1990′s, it does not discredit the underlying concept of peak oil. Hubbert limited his study to a well understood continental oil, making it far easier to predict his end date. He also knew he was close to peak, which current theorist haven’t shown. The current theorist are playing with a lot more variables and unknowns, but, assuming oil is all fossil (or at least the oil we can get to is) it is not that hard to get an estimate of maximum and minimum of all fossil oil, factor the percent we are likely to recover, and subtract the amount already lifted. I don’t believe we have seen peak oil, but do not discount the possibility.
d) With or without abiotic oil, fossil oil (and related fuels) are finite. The only question really is how much or how little is still in the ground. Where the naysayers have failed in the past is in taking too little cognizance of our own ignorance and ingenuity. Our estimations and explorations have gone up, but that is not something we can count on indefinitely. At some point, we will look back at our data showing where we have needed more oil and what we were able to do to correct. We will see that at some point we passed some invisible boundary after which additional finds fell behind demand. This visibility will not appear until some years following the actual event, making it pointless to get excited about it just yet.
For a good analysis of the state of oil reserves, see http://www.eia.doe.gov/oiaf/ieo/highlights.html
For the record, I am not an environmentalist and have much the same complaint regarding them as most reasoning people. I have commented on this topic before in other articles. Nor am I a proponent of either the peak or abiotic oil theories. I feel there’s too much guess work in both theories, though I do think the peak oil people are much closer. I am a plant engineer with a perennial concern with what happens in the oil market. I am confident that the price spikes we are seeing now are indications of easily explained events that will be corrected in the near future. I am just as confident that we will see a steady rise in the price of oil over time and may be seeing a rise that will, hereafter, be greater than inflation. This is okay and we will adjust our economies and habits to suit. It is not a crisis that should cause anyone to panic.
Guys, guys, please. OPEC stands in the way of low oil prices, no matter what the worldwide reserves of crude oil. Saudi Arabia controls OPEC, and George W. Bush is in bed with the Saudis.
The invasion of Iraq mirrors the plot to ‘Goldfinger’. If you will all cast your mind back to the James Bond film ‘Goldfinger’ you will remember that our villain led a raid on Fort Knox not to steel it’s gold, but to destroy it, to render it useless. Why, so that his stockpile of gold would then go up in value. Restrict the supply, increase the value.
What has the invasion of Iraq achieved thus far? Who, if anyone, has benefited from Iraq’s oil production being almost completely disrupted? Well, judging by the record profits being posted, the big international oil companies have done okay. In fact they have done substantially better than okay.
Big oil operates as a cartel, just like the De Beers diamond people. Diamonds, it turns out, are not that rare. De Beers with its almost total monopoly on the industry keeps the supply deliberately scarce.
Also, science 101. A word about environmentalists. Burn bio-fuel in your engine and you are just putting back into the atmosphere what the crops originally took out of it. Dig up and burn millions of years old fossil fuel on the other hand, and you are adding CO2 to the atmosphere that had been removed from it eons earlier. The result is a greenhouse effect that warms up the planet and causes climate change.
The environmentalists are right, and conservatives are wrong. For the sake of blind greed and almost unbelievable ignorance, the world will gradually reap the effects of preventable climate change.
The wealthy of course will probably survive happily enough, being able to pretty much live where they want and how they want. It’s the impoverished majority of the world’s population who will take the beating, just the way the conservatives have always liked it.
If on the other hand you are poor and conservative, then you are inexplicably stupid and deserve everything you have voted for. Unfortunately this is one conservative mistake that the rest of us can’t get away from.
Estimates and timetables vary, but I would have thought this is one situation were everyone in the world might want to ere on the side of caution. This is a case of when not if, unless we find other ways of generating energy, so that we can cut down on our reliance on oil.
But why am I saying this to a bunch of conservatives, Bush supporters, ready to rubber stamp whatever decisions the great man makes come election time?