Commentt Peak oil or peak emissions?
A
re we running out of oil? Not any day soon, but a big controversy exists about the manner in which supplies will tighten and prices will rise in the future. Certainly, we are running out of cheap oil and a place to store the emissions from its profligate use. “Peak oil” is the notion that world oil production will soon reach a pinnacle and will begin to decline within the next decade or so, inflicting serious damage to our global economy, possibly creating a depression and undermining geopolitical stability. The Association for the Study of Peak Oil hosted the 2007 Houston World Oil Conference on October 17–20 to discuss the timing of various peak-oil scenarios, the expected dramatic rise in oil and gas prices, and where smart money should be invested to mitigate the effects of (and to profit from) the peak-oil phenomenon. The guru of peak oil was the legendary M. King Hubbert, Shell geologist, who correctly predicted in April 1956 that oil production would peak in the U.S. within 15 years, which it did. Hubbert reasoned that every finite resource undergoes a discovery life cycle and a production (usage) life cycle, which represent two overlapping normal distributions in time. When approximately half of the discovered reserves have been consumed, the production output begins to falter and prices rise. In a single country like the U.S. this is problematic, but it can be offset by world trade when other resources are sold in exchange for oil. Thus, a nation that reached its peak production long ago can still prosper from excess world oil through free trade with other nations. But what happens when the world oil production begins to slow? The amount of oil discovered each year in the U.S. began to fall in the late 1930s, but it wasn’t until 1970 that production actually began to decline. Likewise, the number of new oil reserves worldwide has been decreasing for almost 40 years. Oil companies discover an average of ~9 billion barrels (bbl) each year, nations consume 30 billion bbl (1000 bbl per second), and the demand is increasing at 1.7% per year. But how long can this continue? Incredibly, for every 3–4 bbl of oil that we extract today, only 1 bbl is discovered. It doesn’t take Einstein to figure out that that’s a losing proposition. So where do we stand? We’ve consumed 1.1 trillion bbl of global oil since production began, and we have ~1 trillion bbl in known reserve (oil plus natural gas liquids) plus another 1 trillion bbl that might be discoverable at great cost. Witness the current spectacle of countries falling all over one another to claim oil rights to the North Pole now that Arctic ice is melting from global warming. (You can’t make these things up—such irony © 2007 American Chemical Society
eludes even great fiction. If we continue down this path, next we’ll be drilling for oil in Antarctica.) Peak oil is inevitable—production at the world’s largest oil fields is declining at ~4% per year. But if we concentrate our efforts on lowering demand for oil, we will prolong the supply and cut greenhouse gases at the same time. Robert Solow, Nobel Prize-winning resource economist at the Massachusetts Institute of Technology, once said that virtually every economic good is substitutable, except for natural treasures like Yellowstone Park. Oil is also a resource treasure, but it is certainly substitutable. If we can find clean alternatives to oil, prices will stabilize, and the economy could come to a soft landing. High oil prices will aid in the development of substitution technologies. Of course, the number one strategy should be conservation and energy efficiency, which could easily halve oil consumption in the U.S. Weaning ourselves from fossil fuels is the greatest challenge of the 21st century. But in this case, less really is more. Walking, biking, and public transit can not only conserve oil but also reinvigorate Americans who have become obese and diabetic. Low-hanging fruit exists because of past inaction. We can double our vehicle fuel efficiency with new Corporate Average Fuel Economy standards. Flex-fuel plug-in hybrid vehicles will get 150 mpg of fossil fuel (e.g., the Chevrolet Volt concept car from General Motors). We will “fill” our batteries at night with storable wind power in Toyota’s plug-in hybrid Prius, which is nearly commercial, and Chrysler’s plug-in hybrid Sprinter van. Solar photovoltaic roofs will be used to replace diesel and natural gas for home heating and electricity demand. Geothermal heat pumps will provide home heating and cooling. We’re in a dramatic race to decrease fossil fuel demand (and emissions) before the looming economic disruption caused by scarce oil and global warming becomes reality. Energy security, the climate, and the economy are all at stake. Declining oil demand will trump the effects of peak oil. But we need leaders who will challenge us, we need a plan, and we must start soon. Let’s hope the embryo of a global plan is hatched at the upcoming UN Climate Change Conference in Bali on December 3–14, as we await new leadership in the U.S. in 2009.
Jerald L. Schnoor Editor
[email protected] November 1, 2007 / Environmental Science & Technology n 7193
