A great documentary...for idiots.
Oil is a nonrenewable resource. Every gallon of petroleum burned today is unavailable for use by future generations. Over the past 150 years, geologists and other scientists often have predicted that our oil reserves would run dry within a few years. When oil prices rise for an extended period, the news media fill with dire warnings that a crisis is upon us. Environmentalists argue that governments must develop new energy technologies that do not rely on fossil fuels. The facts contradict these harbingers of doom:
In May 1920, the U.S. Geological Survey announced that the world’s total endowment of oil amounted to 60 billion barrels
In 1950, geologists estimated the world’s total oil endowment at around 600 billion barrels.
From 1970 through 1990, their estimates increased to between 1,500 and 2,000 billion barrels.
In 1994, the U.S. Geological Survey raised the estimate to 2,400 billion barrels, and their most recent estimate (2000) was of a 3,000-billion-barrel endowment.
World oil production continued to increase through the end of the 20th century.
Prices of gasoline and other petroleum products, adjusted for inflation, are lower than they have been for most of the last 150 years.
Estimates of the world’s total endowment of oil have increased faster than oil has been taken from the ground.
How is this possible? We have not run out of oil because new technologies increase the amount of recoverable oil, and market prices — which signal scarcity — encourage new exploration and development. Rather than ending, the Oil Age has barely begun.
History of Oil Prognostications
The history of the petroleum industry is punctuated by periodic claims that the supply will be exhausted, followed by the discovery of new oil fields and the development of technologies for recovering additional supplies. For instance:
Before the first U.S. oil well was drilled in Pennsylvania in 1859, petroleum supplies were limited to crude oil that oozed to the surface. In 1855, an advertisement for Kier’s Rock Oil advised consumers to “hurry, before this wonderful product is depleted from Nature’s laboratory.”1
In 1874, the state geologist of Pennsylvania, the nation’s leading oil-producing state, estimated that only enough U.S. oil remained to keep the nation’s kerosene lamps burning for four years.2
Scaremongers are fond of reminding us that the total amount of oil in the Earth is finite and cannot be replaced during the span of human life. This is true; yet estimates of the world’s total oil endowment have grown faster than humanity can pump petroleum out of the ground.16
The Growing Endowment of Oil.
Estimates of the total amount of oil resources in the world grew throughout the 20th century [see Figure III].
In May 1920, the U.S. Geological Survey announced that the world’s total endowment of oil amounted to 60 billion barrels.17
In 1950, geologists estimated the world’s total oil endowment at around 600 billion barrels.
From 1970 through 1990, their estimates increased to between 1,500 and 2,000 billion barrels.
In 1994, the U.S. Geological Survey raised the estimate to 2,400 billion barrels, and their most recent estimate (2000) was of a 3,000-billion-barrel endowment.
By the year 2000, a total of 900 billion barrels of oil had been produced.18 Total world oil production in 2000 was 25 billion barrels.19 If world oil consumption continues to increase at an average rate of 1.4 percent a year, and no further resources are discovered, the world’s oil supply will not be exhausted until the year 2056.
The estimates above do not include unconventional oil resources. Conventional oil refers to oil that is pumped out of the ground with minimal processing; unconventional oil resources consist largely of tar sands and oil shales that require processing to extract liquid petroleum. Unconventional oil resources are very large. In the future, new technologies that allow extraction of these unconventional resources likely will increase the world’s reserves.
Oil production from tar sands in Canada and South America would add about 600 billion barrels to the world’s supply.20
Rocks found in the three western states of Colorado, Utah and Wyoming alone contain 1,500 billion barrels of oil.21
Worldwide, the oil-shale resource base could easily be as large as 14,000 billion barrels — more than 500 years of oil supply at year 2000 production rates.22
Unconventional oil resources are more expensive to extract and produce, but we can expect production costs to drop with time as improved technologies increase efficiency.
With every passing year it becomes possible to exploit oil resources that could not have been recovered with old technologies. The first American oil well drilled in 1859 by Colonel Edwin Drake in Titusville, Pa. — which was actually drilled by a local blacksmith known as Uncle Billy Smith — reached a total depth of 69 feet (21 meters).
Today’s drilling technology allows the completion of wells up to 30,000 feet (9,144 meters) deep.
The vast petroleum resources of the world’s submerged continental margins are accessible from offshore platforms that allow drilling in water depths to 9,000 feet (2,743 meters).
The amount of oil recoverable from a single well has greatly increased because new technologies allow the boring of multiple horizontal shafts from a single vertical shaft.
Four-dimensional seismic imaging enables engineers and geologists to see a subsurface petroleum reservoir drain over months to years, allowing them to increase the efficiency of its recovery.
New techniques and new technology have increased the efficiency of oil exploration. The success rate for exploratory petroleum wells has increased 50 percent over the past decade, according to energy economist Michael C. Lynch.23
Despite these facts, some environmentalists claim that declining oil production is inevitable, based on the so-called Hubbert model of energy production. They ignore the inaccuracy of Hubbert’s projections.
Problems with Hubbert’s Model.
In March 1956, M. King Hubbert, a research scientist for Shell Oil, predicted that oil production from the 48 contiguous United States would peak between 1965 and 1970.24 Hubbert’s prediction was initially called “utterly ridiculous.”25 But when U.S. oil production peaked in 1970, he became an instant celebrity and living legend.
In the long run, an economy that utilizes petroleum as a primary energy source is not sustainable, because the amount of oil in the Earth’s crust is finite. However, sustainability is a misleading concept, a chimera. No technology since the birth of civilization has been sustainable. All have been replaced as people devised better and more efficient technologies. The history of energy use is largely one of substitution. In the 19th century, the world’s primary energy source was wood. Around 1890, wood was replaced by coal. Coal remained the world’s largest source of energy until the 1960s when it was replaced by oil. WE HAVE ONLY JUST ENTERED THE PETROLEUM AGE.
How long will it last? No one can predict the future, but the world contains enough petroleum resources to last at least until the year 2100. This is so far in the future that it would be ludicrous for us to try to anticipate what energy sources our descendants will utilize. Over the next several decades the world likely will continue to see short-term spikes in the price of oil, but these will be caused by political instability and market interference — not by an irreversible decline in supply.