We know that there is a finite supply of oil on the planet, and while there are probably massive reserves yet undiscovered, the likelihood of easy extraction is no longer a reasonable expectation. Arctic reserves, oil under the turbulent ocean or petroleum embedded in oil sand are what we are likely to find. In late March, the President formally opened formerly restricted areas to oil exploration: “The plan, which Mr. Obama said would balance the need to produce more domestic energy while protecting natural resources, would allow drilling along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska. It would end a longstanding moratorium on exploration from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean.” New York Times (March 31s t). The announcement drew criticism from many Democrats, speaking of the environmental impact, and Republicans, who felt the plan did not go far enough.
A government report, issued on February 23rd by the United States Joint Forces Command, offered a military assessment on the risks to our oil reserves, a pronouncement that sent the price of oil upwards. DailyFinance.com (4/16) summarizes the essence of the study: “The report speculates that by 2012, surplus oil production capacity will dry up; by 2015, the world could face shortages of nearly 10 million barrels per day; and by 2030, the world will require production of 118 million barrels of oil per day, but will produce only 100 million barrels a day… Although this is hardly a scientific prediction -- a preface to the report clearly states that it's ‘speculative in nature’ -- it still raises the provocative question of how the U.S. will proceed when oil runs out.”
Will our efforts to increase automotive and power-generating efficiency – in light of massive population increases and accelerating demand for cars in developing nations – combined with finding new reserves be enough to create stability? Will the escalation in prices at the pump – reflecting greater demand than supply – serve as a deterrent to excessive use of petroleum-based fuel or will economies and growth be crushed by reason of this cost? Can we harness alternative energy sources, manage efficient new electrical power generation, and find a vastly more efficient way to store electricity than the current toxic and inefficient system of battery technology that exists today?
But the biggest question of all is how reliable are the estimates of the earth’s oil supply? DailyFinance.com explains: “Some of the signs that would supposedly precede an oil peak are volatile pricing, lower oil reserves and a lack of excess production capacity. Although the U.S. has certainly experienced ‘overheated’ oil prices and pricing volatility, it’s been recession-related… As for oil reserves, many industry watchers have expressed concern about an oil glut over the last couple of years. [In the week of April 12th], however, oil prices climbed on news that oil reserves dropped by 2.2 million barrels, while analysts had expected a 1.1 million barrel increase, according to a Dow Jones survey.) A Guardian report published late last year claimed the International Energy Agency was bullied by the U.S. to overstate the world's oil supply, and that low reserves may be a real concern.” Specifically, the Guardian November 9, 2009 article said: “The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.” It’s frustrating thinking that we may have been lied to and manipulated, but what else is new. The harsh reality is that we will, sooner or later, run out of oil.
Posts
No comments:
Post a Comment