The End of Oil? Not Yet!

There are some things most people today know about oil.

* Global oil output is going to plummet

* Prices are going to rise forever

* The transition to alternative energy will be long and painful

* There will be more `oil wars’ and industrial civilization may collapse

* Oil and gas will cause catastrophic climate change

The problem is that these ideas are wrong.

Oil `ran out’ first in 1885, and perhaps another five times since then. Every time, new finds, new technologies and changes in oil use confounded the pessimists.

Oil prices above $140 per barrel seem to encourage the growing belief that we are approaching `peak oil’ and that supply cannot increase any more. But what has changed since 1998 when oil cost $10 a barrel? Just that a long period of under-investment in new energy supplies collided with rapid growth in Asia (and, easily forgotten, the USA ). It takes years to turn the energy super-tanker around, to develop new oil fields, even though there is plenty in the ground.

There is a real debate over how much oil the world holds. But ideas of a vast conspiracy involving some mix of OPEC, the US government and `Big Oil’ to exaggerate oil reserves are fantasy. Official figures are, if anything, somewhat under-stated, and, as recent massive finds in deep water offshore Brazil show, new exploration frontiers still exist. Out-dated environmental moratoria in the USA could be lifted to yield more domestic hydrocarbons. New technologies continue to wring more out of old fields. Most importantly, `unconventional’ oil sources hold many times the volumes of conventional oil – from the famous Albertan `oil sands’, to fuels from natural gas, coal and plants, to `cooking’ oil out of shales that hold trillions of barrels in the USA alone.

SciScoop