Is the era of easy oil over?

To fully grasp the scope of the crisis looming before them, Americans must retrace their seemingly ordinary tankful of gasoline back to its shadowy sources. This is, in effect, a journey into the heart of America’s vast and troubled oil dependency. And what it exposes is a globe-spanning energy network that today is so fragile, so beholden to hostile powers and so clearly unsustainable that our car-centered lifestyle seems more at risk than ever.

“I truly think we’re at one of those turning points where the future’s looking so ugly nobody wants to face it,” said Matthew Simmons, an energy investment banker in Houston who has advised the Bush administration on oil policy. “We’re not talking some temporary Arab embargo anymore. We’re not talking your father’s energy crisis.”

What Simmons and many other experts are talking about is a bleak new collision between geology and geopolitics.
Below ground, the biggest worry is “peak oil”–the notion that the world’s total petroleum endowment is approaching the half-empty mark, a geological tipping point beyond which no amount of extra pumping will revive fading oil fields. Peak oil theory is controversial. Many think it alarmist. Yet even Big Oil is starting to gird itself for possible fuel shortages: Chevron, the nation’s second-largest oil company, has bluntly declared that “the era of easy oil is over” and is warning energy-hungry Americans that “the world consumes two barrels of oil for every barrel discovered.”

Aboveground, things look little better. Most of the world’s petro-states, aware that crude supplies are growing increasingly valuable, have limited drilling rights to their own oil companies.

In the meantime, humanity’s thirst for petroleum continues to run wild. Producing nations are pumping at maximum capacity. Yet the competing energy demands of America and rapidly industrializing China and India now threaten to outstrip global oil output. China has displaced Japan as the No. 2 oil importer, after the United States. Chinese oil imports are projected to double to 14 million barrels a day over the next 20 years. Many credible analysts foresee a new “energy cold war” as the U.S. and China square off over the planet’s last reserves.

..The United States gulps a quarter of the crude pumped on the planet, industry critics point out, yet it sits atop just 3 percent of the globe’s reserves. No amount of new drilling will change this. The awesome and costly platforms that stride ever-deeper into Gulf waters are symbols of a junkie’s desperation, they say, not hope.

“You can drill in the Arctic National Wildlife Refuge, on every continental shelf and atop every hill in America for that matter, and you still won’t reverse the fact that our oil production is in permanent decline,” said Rep. Roscoe Bartlett, R-Md., a senior member of the House Science Committee. “We’re just sopping up what’s left, digging ourselves into a deeper hole.”

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