But this crisis isn't
centuries away. The crunch point comes not when we have run all the
oil wells dry, but when demand outstrips production. And a growing
number of experts are warning that this is likely to happen within the
next few years. "There is a growing consensus that we are heading for
an imminent peak [in oil production], if not already past it," Hardman
In previous crises,
new reserves always seem to have been found to make up the shortfall.
But the declining rate at which new fields are being discovered
suggests it won't happen this time, at least not for conventional oil(see
Graphic). We now find just one barrel of oil for every four we
consume. And with production already declining in the US and the North
Sea, the world must rely increasingly on the politically volatile
Middle East and other parts of the developing world(see
So how long have we
got? To estimate when the world will run short of oil, you need to
know how much oil there is overall. In principle, this should be easy
to calculate:geologists know which kinds of rock are likely to hold
oil and they know where these reservoirs are and how big they are.
"They know all the regions where it's possible to find oil by now,"
says Kjell Aleklett, physicist at Uppsala University, Sweden, and
president of the Association for the Study of Peak Oil & Gas. "There
are no new regions to be found."
Oil companies keep
detailed information about individual basins secret, but most of the
educated guesses made over the past few decades fall close to the same
estimate:the world's oil reserves began with a total of about 2
Graphic)of which some 900 billion have now been used.
The 1.1 trillion
barrels that remain represent about a 40-year supply at current
consumption levels of about 25 billion barrels per year. At first
glance this seems a comfortable cushion, but don't be fooled-we won't
get the chance to use it all at anything like our present rate. The
flow rate from any single oil well begins to decline as soon as
production starts, because the pressure in the reservoir drops.
Companies can maintain the flow for a while by injecting water to
boost the pressure, but the flow inevitably dwindles and the last of
the oil must be wrung out.
Good half of the
This means that the
rate of production follows roughly a bell-shaped curve. The peak,
whether from a single basin, a region, or the entire world, comes when
about half the oil has been extracted-once most of the wells are in
and before they taper off too much. After that, the rate falls
inexorably. "It's not that you've eaten half the pie; you've eaten the
good half of the pie," says Ali Samsam Bakhtiari, an expert with the
National Iranian Oil Company. If production rates fall while demand
continues to rise, oil prices are likely to spike or fluctuate wildly,
raising the prospect of economic chaos, problems with transporting
food and other supplies, and even war as countries fight over what
little oil is available. "That's when all hell breaks loose," says
James MacKenzie, an energy analyst at the World Resources Institute in
If the general
consensus of a 2-trillion barrel reserve is correct, the world has
almost finished the good half of the pie and this day of reckoning is
not far off. Indeed, many prominent analysts, Aleklett included,
foresee oil production peaking in the next 5 to 15 years, far too
short a time to find alternative fuels, especially for transportation,
and barely long enough to bring effective conservation measures into
Some believe the peak
is already here. "I am 99 per cent confident that 2004 will be the top
of the mathematically smoothed curve of oil production," says Kenneth
Deffeyes, a geophysicist at Princeton University. And he believes the
highest single year may already have passed. "2000 may stand as a blip
above the curve and be in the Guinness Book of World Records." Other
leading analysts, including Colin Campbell, founder of the Association
for the Study of Peak Oil & Gas, have reached the same conclusion(see
Graphic). These analysts use variations of a method pioneered by
geophysicist Marion King Hubbert, now something of a folk hero for
correctly predicting in 1956 the US production peak in the 1970s,
despite widespread dismissal of the idea at the time.
Not even the optimists
believe we have much more than 20 years to prepare for the peak, if
demand grows at its historical norm of 2 per cent per year. In a
recent analysis, the United States Geological Survey (USGS)
controversially estimated the world's extractable oil at more than 3
trillion barrels. Based on that figure, the US Department of Energy
calculates that oil production may not peak until 2037.
As well as predicting
the discovery of new fields, USGS analysts tracked changes in
estimated reserves for 33,000 known fields and found that they crept
upwards over time, either because earlier estimates were too
conservative or because technological improvements allowed the
companies to extract more oil. Applying this reasoning worldwide, they
forecast that known fields should yield 612 billion barrels beyond
But will new
technology wring enough oil out of existing fields to maintain
production rates? "I don't buy it," says David Pursell, an energy
analyst with Simmons & Company International, an investment banking
firm in Houston, Texas, that specialises in the energy sector. "You've
got to spend a ton of capital to get an extra 1 or 2 per cent out."
Others who favour
later dates, such as Shell and Exxon, include less accessible, dirtier
sources such as heavy oil. But using these sources would release even
more carbon dioxide into the atmosphere than conventional oil, a price
that many feel is too high(see
"Can heavy oil avert an energy crisis?"). "The most important
problem we face with oil is not its availability but its carbon," says
MacKenzie. "We have to move away from fossil fuels if we are to deal
with the climate issue."
Whatever the exact
timing of the peak, we still need to find a new source of energy. "In
the end there's no way to know who's right, but it doesn't matter,"
says Jeremy Rifkin of the Foundation on Economic Trends in Washington
DC. "We're only arguing about 20 years. If we think oil is a problem
now, just wait 20 years. It'll be a nightmare."
|Why oil is king
We use energy for three main things:electricity production,
heating and transport. For the first two, we have options such
as solar and wind power, or natural gas. But oil is still the
world's number one dependency, and for transport at least,
there is currently no viable alternative. "If we took a blank
piece of paper and tried to design the perfect car fuel,
within 20 minutes we'd come up with petrol," says David Cope,
director of the UK's Parliamentary Office of Science and
Technology. "To find an alternative we are going to have to
make horrible compromises."
Our addiction is set to get worse as developing countries
become more industrialised. In China, domestic energy use at
the moment is equivalent to just one light bulb burning
continuously per person. That demand is expected to increase
exponentially over the next few years, and it's not just in
China. Central America, India and pretty much all developing
regions, except Africa, are catching up fast.
Increasing energy efficiency must be a priority. But while
energy is being used more efficiently in the developed world,
demand, stoked by the west's bigger-is-better culture,
stubbornly refuses to decline.