by pup55 » Thu 14 Jul 2005, 15:08:32
Dear college students:
I’m going to tell you a story today about oil. It’s got all the elements of a good story: mystery, intrigue, money, heroes and villians, giant ferocious monsters, and some science. Please don’t roll your eyes when we come to the science part. There is even a little sex in the story, but we will get to that later.
We all know how important energy is to our daily lives, and in fact, every aspect of our society is built on the benefits and advantages of having an abundant energy supply, literally at our fingertips. Mainly, this energy comes to us in the form of oil, because it is easy to produce, pump, transport and store. Our food supply, our basic health and medicine, our jobs, and just about everything we do are dependent in one way or another on our ability as a society to get this black goo out of the ground at the rate we need it to run everything, so it’s obviously pretty important.
We all know about the storage and use part. Chances are, everybody in the audience today has, within the last couple of days, gone to a gas station and pumped some refined oil into your gas tank and used it to drive around. We also know that as the population gets bigger, more and more people start using this stuff, and so the overall need for oil gets bigger and bigger every year. This is the sex part. People have sex, and reproduce, and the demand for oil goes up every year as the population gets bigger. Also, people in places like China and India have discovered that using driving cars is fun, therefore the oil demand from those places has gotten a lot bigger in the past couple of years, and they are also having sex, their populations are increasing, so the overall need for more oil is getting bigger and bigger every year.
We usually don’t think too much about how the gas got to the gas station. How it got there is: somebody had to go out and discover some oil in the ground, then somebody else had to figure out how to pump it out without making a mess of everything, and then somebody else had to figure out a way to refine it into gasoline, which you could pump into the car. It works the same way with heating oil, for heating your house, jet fuel for driving jets, and even natural gas, which is mainly used to run power plants for generating electrical power, but that is kind of a side story.
Let’s talk about the discovery part. Before you do anything else, you have to discover the oil.
The way you discover oil is, you go to some place you think there might be oil, and drill a hole in the ground, and see if you found any. If you do, you celebrate, and if you do not, you cry, because drilling holes in the ground is expensive, as anybody who has recently drilled a well is aware. So, in order to avoid drilling a lot of dry holes, most of the discovery is done by highly trained geologists, and only drill the holes in places that a highly trained petroleum geologist thinks there might be oil. In fact, places where there might be oil are pretty rare, and a good way to think of this is that most of the dinosaur bones now in museums around were found by the early petroleum geologists looking for the same kind of rock formations that contain dinosaur bones, so since dinosaur bones are kind of rare, you can figure that the places that there might be oil are also pretty rare. This is the part about the giant, ferocious monsters.
Well, all of the well trained geologists and drilling rigs have been wandering the world since the 1920’s looking for places to drill oil, and every year, they find some. As you would expect, they find the big deposits of oil first, then the middle sized ones, then the smaller and smaller ones. When they find an oil deposit, they make an estimate of how much oil they think is down there, and how far down it is, and report back how much oil they think they have found.
It turns out that the maximum decade for the discovery of oil was the 1960’s. During the 60’s, there was an average of almost 50 billion barrels of oil discovered every year. Seems like a lot, except that we are now using about 85 billion barrels of oil per year, but that is another story. The big oilfields in Saudi Arabia and Iraq were discovered a long time before that, back in the 30’s and 40’s. Nowadays, the big oil companies and other people are still spending billions of dollars and have really complicated scientific equipment, and satellite imaging and computer-guided drilling and last year, they had a pretty good year, they discovered about 8 billion barrels of oil per year.
Now for the pumping part.
The way you pump the oil is that you drill a hole into the ground where the deposit is, and put a big pump on it, and pump the oil out of the ground. If the oil deposit is easy to get to, and the pressure in the oil deposit is nice and high, drilling an oil well and pumping out the oil is cheap. If the oil is in a place that is not easy to get to, such as the bottom of the gulf of mexico, and the pressure is low, the job is much more difficult.
This issue of pressure in the oil well is a lot like poking a hole into the side of a bucket. When you put the first hole in, the stream of water is pretty fast. As the amount of water in the bucket gets lower, the pressure is less, so the stream slows down. At some point, all there is left is a trickle. In order to keep the water flowing at a constant rate, you have to poke more holes in the bucket, until eventually, the water trickles out, and the overall rate of flow gets lower and lower until you give up and just pour the bucket out.
So, in the oilfield, it pretty much works the same way, except you can’t pour the bucket out: You drill a hole, and at first the pumping rate is pretty fast, and then it gets gradually lower and lower until you end up with just a trickle. So, you drill a lot of holes, to get the oil out at a constant rate, until at some point, the whole oilfield has holes drilled into it and the whole oilfield eventually gets down to a trickle.
Well, there was a petroleum geologist back in the 50’s named Hubbert, and he noticed that if you measured oil production in a given field, the production over time kind of made a peak. When you first start drilling, every year you produce more and more oil, until at some point, you get to the peak, what with all of the holes drilled in the deposit, the oil flow got less and less, until it got down to a trickle.
Now when your oilfield got down to a trickle, it used to be no problem. You just moved your drilling rig to the next oilfield, which the geologists have already discovered, and start over. Pretty soon, if you are one of the oil companies, you build more rigs, and you are drilling lots of oil fields, and these oil fields are pumping at different rates, and have different levels of maturity, and are pumping different amounts depending on how easy they are to pump, and so on.
The thing that made Hubbert famous (or infamous, depending on how you look at it) is that he figured out that for a nation, such as Canada or the US, the sum total of all of the little curves of the individual oil fields added up to one big curve, which ought to have a predictable peak, hence, the “peak oil” theory. Once the nation got beyond the peak, it became harder and harder for that country to get oil out of the ground, even if they drilled more holes, because the previously drilled holes and oilfields start to deplete faster than the newly drilled holes could increase production.
He made a couple more observations: First, this pumping peak tended to follow the discovery peak that we talked about earlier, by 40 years or so. Secondly, that the same thing ought to apply globally. You can see where we are going with this. So, the offshoot of this is that, at least as it has applied to the US, Hubbert was right, they did have a peak, which was in the early 70’s, and since then, despite all of the holes drilled in that big country, including Alaska, they never have been able to reach the same level of production they did at that time. Nowadays, they are importing about 60% of their oil, and we all know from where.
Now comes the mystery and intrigue part.
We all know that the US and a lot of the nations in Europe and other countries in the world are in depletion, that is, they are on the right hand side of the peak, and we also know that demand for oil (because of all of the sex going on) in these countries is still increasing, so they have to import it from somewhere. That somewhere is, as we all know, the middle east. It’s just like picking up your drilling rig and moving it to the next oilfield, except there is a lot of sand.
The problem is that nobody is completely sure exactly how much oil the middle east has left to pump. Most of the nations of the middle east have “nationalized” their oil companies, and the exact amount of oil they have in the ground is a state secret. They won’t let independent third parties come in and audit their oil fields. To make matters worse, starting in the 1980’s, most of these crazy little countries started to claim a lot more oil reserves than previously, mainly for political reasons. So, the so-called “reserves estimates” of this whole region increased by about 50% without one drill bit ever being sunk into the ground.
Now, you can see the problem.
The demand for oil in the world is continuing to grow.
The amount of oil discoveries peaked 40 years ago.
The amount of oil in the “developed countries” is in depletion.
The amount of oil in the middle east is uncertain.
There is a school of thought, proposed by some of the leading petroleum geologists, and others, that the middle east oil supplies are at or near their peak. If this is the case, it is possible that the global oil supply is near its peak, and since all of that sex is still going on, at the very least, there are going to be problems from here on out. The serious issue on the peak is that at some point, somebody is going to have to do without oil. Every year, instead of more oil coming out of the ground, there will be less. So, as the global population keeps growing, you can see there is going to be a problem once the peak has been passed. Once the peak has passed, there are serious consequences for the entire world, especially for the economy, because all of the economic growth is predicated on people being able to get more oil next year than they did this year. It goes right to the root of the whole capitalistic system, in fact, but we do not want to get into that yet.
The date of this peak is the subject of a lot of debate right now. Some believe it may have occurred last year. The French government thinks it will occur in about 2010. The US government “officially” thinks it will occur in about 2020, but then again, this assumes the “optimistic” assumption based on the middle east reserves claims that we talked about.
So, at some point within probably the lifetime of a young adult living today, and maybe a lot sooner, we are going to be confronted with a problem: Every gallon of gas you pump into your tank is one less gallon available in the world energy supply, because people can no longer just pump a little more out of the ground to take care of it.
Somebody, somewhere, is not going to get the oil they want.
Also, guess what? Oil is going to be a lot more expensive. The price may be in blood.
Now, I know what you are thinking. I can read your thoughts.
What about solar?
What about hydrogen?
What about hydroelectric?
What about biomass?
What about ethanol from corn products?
What about all of the oil sands?
Well, we don’t have time to get into much detail on all of this, but to make a long story short, all of these are wonderful ideas, and have some merit, but if the peak is nearby, none of this stuff can be implemented at a fast enough rate and at a big enough scale to take the place of the loss of the amount of oil, and even if the peak is not nearby, we are not doing nearly enough to develop this stuff because of the mystery and intrigue issue we talked about. This school of thought is that that there is still plenty of oil, and that we should not go through the effort and expense to do the R and D, because the friendly, peaceful, honest middle easterners will always be able to take care of you.
So, what to do?
Well, the oil supply will not just vanish overnight. Like the hole in the bucket, at first, it will come out slower, then at some point a trickle, so at least there is a little time to make some plans.
The first thing is to not take any of this at face value without studying it personally. There are a number of interesting internet sites to increase your knowledge of this important issue. Also, do not believe everything you see on the internet, or hear in speeches, especially this one.
For example, there is a school of thought that says that oil is plentiful, we just have not had the economic incentive to find the rest of it, and all is well.
There is another school of thought that says within a few years of the peak-event, the economic ramifications of this will be so profound that society will collapse and we will end up with armageddon.
Educate yourself on the subject matter, and make your own decision. The truth will become evident at some point.
Secondly, increase your own awareness of your surroundings, and start thinking about how the future is going to be played out as it applies to energy availability. This should be no problem to anyone who has filled up with gas lately, but you should also think about the ramifications of this as it applies to the electricity grid and the availability of home heating, since a lot of this theory also applies to natural gas, coal and heating oil.
Thirdly, do not panic and fly off in a state of fear on this. You are lucky to live in a place where there will be time to prepare, there are abundant natural resources, and a friendly, cohesive population in case there are any problems. As we said earlier, depending on how this all works itself out, somebody is going to have to do without oil, and might get upset when they find out that they are going to have to change their lifestyle.
Finally, expect change. Teach your kids that the next 50 years are not going to be like the last 50 years, and give them some skills and ability to adapt to changing cirumstances, economic and social as well as physical. Stay in shape, watch the news, and do not be surprised if a lot of what you see is driven by this whole issue of fossil fuel depletion. Also, appreciate your life and the advantages you have, and learn to make the most of it.
In conclusion, I guess I would add that when your alarm clock rings in the morning, you have two choices: get up, or roll back over and go back to sleep. I hope you will think of this little story about oil depletion as the alarm clock ringing. Whether you get up or roll over is ultimately up to you.