World's Oil May Soon Run Low
New signs suggest that demand may soon outstrip supply. But industry experts say technology will keep oil flowing for decades.
HOUSTON — It may happen in 10 years or when some politician is promising a bridge to the 22nd century. But eventually, the world's growing population will demand more oil than the world's oil industry can provide. The impact of this historical moment could be as significant as the invention of the combustion engine itself.
The signs of decline are already apparent, and troubling.
* In the 1980s, the world produced 220 billion barrels of sweet crude, but oil companies only found 91 billion in new discoveries to replace that supply.
* Some 80 percent of the oil produced today comes from fields that were discovered before 1973, and most of these are on the decline.
* Even with the current financial crisis affecting Asia and Russia, global demand for energy is almost guaranteed to grow dramatically, perhaps 60 percent by 2020.
So what's a world leader to do? Force oil companies to abandon oil and invest in solar, wind power, or fusion technology? Abolish Jeep Cherokees? Or trust that market forces will settle the issue and create ample fuel for the world's ever-growing population?
"It seems ludicrous to say this during an oil glut, when the price of oil is at such low levels," says Colin Campbell, an oil industry geologist. But the "coming oil crisis" is very real, he says, and the implications are staggering, particularly since the world's 5 billion and growing population depends on modern farm machinery to produce its food. "I think the next century will really be a turning point for humanity."
If Mr. Campbell's words have the subtlety of smelling salts, that's by design. His latest salvos, printed in Scientific American and the journal Science, have awakened a lively debate about when and whether the world should wean itself from fossil fuels. And he is not alone.
Campbell's prediction of an oil peak in 2010 has been seconded by scientists with the US Geological Survey (USGS), who predict a peak in 2005, and the University of Colorado, who predict a peak in 2020. Detractors argue that a peak would occur 50 to 100 years from now, giving market forces time to adapt. But supporters of Campbell say world leaders must act now.
"In the event of a shortage, somebody is going to be shortchanged, whether it is the US or China, Pakistan or India. There's going to be lots of room for misunderstanding," says L.F. "Buzz" Ivanhoe, president of the M. King Hubbard Center for Petroleum Supply Studies in Ojai, Calif. "Whether we will be able to meet the world's demand for energy depends on whether the alternative fuels are available."
Oil company executives and other experts play down talk of a looming oil crisis, and with oil prices around $13 a barrel, oil shortages seem far off. But even industry insiders admit that current production levels can last for only another 40 to 50 years for the easy-to-pump, easy-to-refine stuff that geologists call light sweet crude.
Still, oil industry experts say Campbell and his compatriots are exaggerating the problem and underestimating technology's ability to overcome it. "In 1989, Campbell printed an article saying that oil prices would leap in the early 1990s; now he's saying the same thing about the next 10 years," says Michael Lynch, a political scientist at Massachusetts Institute of Technology in Cambridge, who often debates Campbell on the oil supply issue. "People keep moving the peak further into the future; it just shows the model is wrong."
Ultimately, Mr. Lynch says, the marketplace will encourage energy companies to switch to alternative fuels whenever oil becomes too expensive to rely on. Until then, he adds, science will help oil companies find and produce enough oil. "As long as technological progress continues," he says, "we'll continue to see relatively flat prices."
Among the technologies that are already showing promise are improved seismic imaging that allows geologists to pinpoint oil pockets and "smart" drill bits that continually feed information to the surface as they bore through bedrock. As a result of these and other technologies, oil companies have almost doubled the amount of oil they recover, from 30 percent to nearly 60 percent in some fields.
In addition, Canadian scientists have recently discovered cheaper ways to turn the country's vast tar sands into usable petroleum.
"I'm always cautious about making predictions," says Daniel Yergen, president of Cambridge Energy Research Associates, while attending this month's World Energy Council meeting in Houston. "Back in the 1920s, the head of the USGS predicted that the world would run out of oil in 9 years and 3 months. I always loved the specificity of that prediction."
The crowd at the World Energy Council, a gathering of electric-power and oil companies, is hardly the place to find sympathetic ears for talk of oil shortages.
But Campbell remains confident in his predictions and he says citizens need to educate themselves and urge their leaders to move toward alternative fuels. "If we can make people aware, it gives politicians the mandate to do something they would otherwise find difficult to do."