The warnings keep piling up. Author Paul Roberts cautions his readers about "The End of Oil." National Geographic's cover story last month examined how the world might survive "After Oil." The Economist magazine asks, "Is the age of oil drawing to a close?"

With the discomfort growing, consumers are considering fuel-efficient cars. Industry has gotten serious in its search for alternatives. New efforts are focused on wind, solar, nuclear, and even old, reliable coal (in a cleaner version) for the energy future.

But is the world really running out of oil? The short answer is no. Earth is swimming in the stuff. What's changed is that the era of cheap oil - a period that has lasted 150 years - is showing its age. Only a dramatic breakthrough - either in technology or consumption patterns - can forestall its conclusion in a decade or two.

If it happens, the end of cheap oil would have a profound effect: stunting world economic growth, constraining China's rise, and challenging Western lifestyles. America's joy ride, in particular, could come to a screeching halt.

"The US has 2 percent of the world's proven oil reserves. But it burns 25 percent of the world's transportation fuels," says an analyst close to the oil industry who asked not to be named. "This isn't going to work out in the long run."

The problem isn't readily apparent from a supply viewpoint. When the world's first oil well was sunk in Pennsylvania in 1859, the Earth contained at least 6 trillion barrels of crude oil, geologists estimate. So far, we have used only about 1 trillion barrels.

So what's all the fuss about?

Part of the worry has to do with access. Of the original 6 trillion to 8 trillion barrels in the ground, the industry is capable of extracting only about half - 3 trillion to 4 trillion barrels. Lots of oil is locked in difficult underground formations that are hard, if not impossible, to exploit using current technology.

Moreover, those first 1 trillion barrels were among the easiest to reach. The days of easy gushers and overnight millionaires are long gone. Now the going gets harder.

Where underground formations are highly favorable, as in the Gulf of Mexico and Saudi Arabia, oil drillers can often retrieve 60 percent of the oil. But in marginal formations such as some found in Oklahoma, the average rate of recovery can be as low as 8 to 10 percent. Worldwide, the average is about 35 to 40 percent, according to the US Energy Information Administration.

In short, only 2 trillion to 3 trillion barrels may remain for our use.

Even more worrisome is the demand equation. It took 146 years for the world to use the first 1 trillion barrels. The next 1 trillion barrels will be gone by around 2030. After that, we could have as little as 1 trillion or 2 trillion barrels of conventional oil left.

Some experts who follow these issues closely are getting worried. One big change, particularly in the past two years, has been increasing international competition for oil supplies.

During most of the past century, it was mainly the United States, Japan, and Europe that vied for the world's petroleum supplies. Now other nations like China and India are developing their own needs for oil to fuel their factories and their rapidly expanding fleets of automobiles, trucks, and airplanes. That could set off a scramble for worldwide oil reserves, and it seems to assure that higher prices - at least higher than we are accustomed to - are here to stay.

Page: 1 | 2