Debate brews: Has oil production peaked?
Peak oil goes mainstream??? 18 to 24 months ago, those writing and talking about Peak Oil were considered conspiracy theorists and crazies. Today, it makes the front page of the national newspaper. (Admitedly, USAToday is not exactly considered the most rigorous news source - but that makes it all the more stunning.)
[A] vocal minority of experts says world oil production is at or near its peak. Existing wells are tiring. New discoveries have disappointed for a decade. And standard assessments of what remains in the biggest reservoirs in the Middle East, they argue, are little more than guesses.
"There isn't a middle argument. It's a finite resource. The only debate should be over when we peak," says Matthew Simmons, a Houston investment banker and author of a new book that questions Saudi Arabia's oil reserves.
If the "peak oil" advocates are correct, however, today's transient shortages and high prices will soon become a permanent way of life. Just as individual oil fields inevitably reach a point at which it gets harder and more expensive to extract the oil before output declines, global oil production is about to crest, they say. Since 2000, the cost of finding and developing new sources of oil has risen about 15% annually, according to the John S. Herold consulting firm.
... "The least-bad scenario is a hard landing, global recession worse than the 1930s," says Kenneth Deffeyes, a Princeton University professor emeritus of geosciences. "The worst-case borrows from the Four Horsemen of the Apocalypse: war, famine, pestilence and death."
He's not kidding: Production of pesticides and fertilizers needed to sustain crop yields rely on large quantities of chemicals derived from petroleum. And Stanford University's Amos Nur says China and the United States could "slide into a military conflict" over oil.
In recent months, the peak oil camp has received support from some fairly sober quarters, including the U.S. government. A 91-page study prepared in February for the Energy Department concluded: "The world is fast approaching the inevitable peaking of conventional world oil production ... (a problem) unlike any yet faced by modern industrial society."Now, I am no scientist, or researcher, and I can't claim to have reviewed extensive amounts of data. But...Peak Oil makes logical sense. There has to be a limited supply, and at some point, we're going to have to be on the "back side" of that supply. And, the back side of that supply is going to be an ugly place - with rising commodity prices, trasportation prices, raw material prices, etc., etc., etc. There is very little in today's economies which is not in one way (plastics) or another (transportation costs) dependent upon the price of petroleum.
So far, almost no one in government is calling for immediate action because of the peak oil argument. But in a recent interview with USA TODAY, Energy Secretary Samuel Bodman sounded less than sanguine about the future.
"There's plenty of oil to deal with this over the near term, five years. But if you look out over the next 20, 25 years, we expect demand to grow 50% to 120 million barrels a day. I wouldn't want to opine that's available," says Bodman, a former professor of chemical engineering at Massachusetts Institute of Technology. "It could be, but I don't know."
Is that tomorrow? Or 2010? Who knows. But it is coming. The positive thing is that as oil prices rise (and rise, and rise...) it becomes much more cost-efficient to develop new, renewable energy resources. But at some point, oil will no longer be the future.