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Is the Oil Spigot Running Dry?
Scripps Howard News Service ^ | 5/6/04 | Michael Fumento

Posted on 05/07/2004 7:11:29 AM PDT by ZGuy

In 1914, the U.S. Bureau of Mines predicted American oil reserves would last merely a decade. In both 1939 and 1951, the Interior Department estimated oil supply at only 13 years. "We could use up all of the proven reserves of oil in the entire world by the end of the next decade," declared Pres. Jimmy Carter gloomily in 1977. In fact, the earliest claim that we were running out of oil dates back to 1855 – four years before the first well was drilled!

Still, with gasoline oil prices seemingly rocketing past the moon and towards Mars, and newly-published books like Out of Gas: The End of the Age of Oil and The End of Oil, it seems fair to ask if the world's fuel tank needle isn't finally tilting towards "E."

Yet historically prices aren't particularly high. Adjusted for inflation, they're slightly below what they were back in 1950 when we falsely recall gasoline flowing like water. Then the national average was $1.89 in today's dollars, compared to $1.84 at this writing. In 1981 gas was almost a dollar more per gallon than it is now when adjusted for inflation.

Further, this is not your father's gasoline. Now it's unleaded and reformulated in other ways to burn cleaner. (Or, alas, to pander to the gasohol lobby.

Oil prices have also almost reached an all-time high when not adjusting for inflation, approaching $40 a barrel. But again, when adjusted the cost is far less than it was from 1973 to the mid-1980s.

But there's no denying the sharp increase over the several years. Are we really just experiencing a short-term spike due to voluntary production cutbacks, political unrest in places like Iraq and Venezuela, and a huge decline in the value of the dollar? Or are current prices indicating that reality is finally beginning to catch up to the Cassandras' predictions?

Certainly supply isn't declining yet. "Proved" oil reserves increased from 677 billion barrels in 1982 to 1048 billion in 2002, a 55 percent increase. ("Proved" means quantities that with reasonable certainty can be recovered from known reservoirs under existing economic and operation conditions.) Meanwhile worldwide consumption increased only 13 percent. That's not a particularly spooky trend.

Much oil goes to electricity production, home heating and industrial purposes, in competition with natural gas and coal. So it's also important to know that proved natural gas reserves have increased by more than 60-fold since 1982 while coal reserves are also increasing. If necessary, almost all oil not used for vehicle fuel could be replaced by these other resources as well as nuclear energy.

What about the future? According to a just-released Energy Information Administration report oil production will continue to steadily increase until the last year of the projection, which is 2025.

But oil consumption will continue to increase. This will be partly from population growth, albeit growth that's leveling, and partly from worldwide improvements in living standards that allow people to trade in shoe leather and bicycles for cars. Even so, if consumption continues to increase at an average rate of 1.4 percent a year and not a single new drop is found, we still won't exhaust proved reserves until 2056 according to a 2003 National Center for Policy Analysis (NCPA) report.

Further, the "nice aspect" of high oil prices, if those driving around in gas-slurping SUVs will forgive the term, is that they are the greatest motivator for discovering and exploiting new reserves.

This includes Canada's oil sands, containing a tar-like substance convertible to oil. These hold an estimated 1.7 trillion barrels of petroleum, of which 255 billion barrels (about equal to the entire proved oil reserves of Saudi Arabia) is currently considered recoverable. Because of reductions in production costs, some of this goop is already being extracted and sold. But if oil prices remain anywhere near current levels, oil sand development will replace hockey as Canada's national obsession.

Oil sands worldwide could provide more than 500 years of oil at current usage rates, calculates the writer of the NCPA report, David Deming. He's a professor of geology and geophysics at the University of Oklahoma in Norman.

Five hundred years? Civilization should be so lucky as to consider this a worry.


TOPICS: Canada; Culture/Society
KEYWORDS: energy; fossilfuels; fossils; fumento; michaelfumento; oil; opec; peakoil; solarenegry

1 posted on 05/07/2004 7:11:31 AM PDT by ZGuy
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To: ZGuy
Doesn't matter. Coal supplies can last a thousand years. Coal gassification can turn coal into gasoline. Hydrocarbons Technologies and a Chinese corporation are going ahead on this technologies and should have a plant running in China in the summer of 2005. They should be able to produce gas at $1.35 per gallon.
2 posted on 05/07/2004 7:16:37 AM PDT by techcor
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To: techcor
Yep, the Germans invented this process when their access to petroleum was cut off by advancing allied troops.
3 posted on 05/07/2004 7:23:15 AM PDT by Blood of Tyrants (Even if the government took all your earnings, you wouldn't be, in its eyes, a slave.)
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To: ZGuy
And now there is a theory that petroleum is not actually a
"fossil" fuel, but a natural, and ongoing, process. So we
may NEVER "run out of oil."

4 posted on 05/07/2004 7:29:26 AM PDT by G-Bear (Everything I need to know, I learned from "Lonesome Dove.")
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To: techcor


"I did not know that"

Thanks for the info.
5 posted on 05/07/2004 7:29:49 AM PDT by motzman (Kerry's Haircut: Operation Shear Shrek)
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To: ZGuy; newgeezer
What we really need is more windmills.
6 posted on 05/07/2004 7:40:58 AM PDT by biblewonk (No man can come to me unless the Father who sent me draws them.)
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To: biblewonk
yeah, but not in my back yard.
7 posted on 05/07/2004 7:42:59 AM PDT by stylin19a (Don't be so quick to judge. God waits until the end.)
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To: ZGuy
Better still. Make more and cheaper non-gasoline automobiles.
8 posted on 05/07/2004 7:45:55 AM PDT by AIC
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To: ZGuy
Not a word about refinery capacity. I thought there was plenty of oil already pumped. THE PROBLEM IS THAT ENVIRONUTS HAVE NOT ALLOWED NEW REFINERIES.
9 posted on 05/07/2004 7:46:37 AM PDT by 1Old Pro
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To: Blood of Tyrants
SASOL has also been very active in this segment, because during apartheid, South Africa needed to ensure that it could get oil. SASOL gets gasoline from coal.
10 posted on 05/07/2004 7:49:46 AM PDT by Koblenz (There's usually a free market solution)
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To: G-Bear
And now there is a theory that petroleum is not actually a "fossil" fuel, but a natural, and ongoing, process. So we may NEVER "run out of oil."

I read about this a few years ago. Supposedly depleted fields mysteriously filled up again.

11 posted on 05/07/2004 8:23:10 AM PDT by Mind-numbed Robot (Not all things that need to be done need to be done by the government.)
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To: ZGuy
In the last three years (and this include years AFTER the period of Fumento's column), both Iran and Egypt (as I recall) announced huge new oil discoveries of hundreds of billions of barrels. These announcements came within six months of each other, I think, back in the summer of 2002.
12 posted on 05/07/2004 8:25:38 AM PDT by LS (CNN is the Amtrak of news.)
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To: Blood of Tyrants
Yep, and in the 70's they were able to develop about 4 different process. If Bush were to push this technology forward just a little , the oil producing nations would increase their production to try and kill it .
13 posted on 05/07/2004 8:28:05 AM PDT by techcor
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To: Mind-numbed Robot
Supposedly depleted fields mysteriously filled up again

Theory's basically a crock. It's really popular among people who really don't know their stuff, but petroleum geologists make fun of it. The field that "mysteriously filled up" turned out to be connected to another field through a fault.

14 posted on 05/07/2004 9:46:46 AM PDT by John H K
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To: ZGuy
Or, alas, to pander to the gasohol lobby.

With EPA and CARB mandating oxygenated boutique blends, this guy singles out the "gasohol" lobby to rail on, eh? No such disdain for MTBE (an oil-based product), eh?

15 posted on 05/07/2004 10:39:47 AM PDT by newgeezer (Just my opinion, of course. Your mileage may vary. You have the right to be wrong.)
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Comment #16 Removed by Moderator

To: farmfriend


17 posted on 11/21/2004 9:26:49 PM PST by Coleus (Roe v. Wade and Endangered Species Act both passed in 1973, Murder Babies/save trees, birds, algae)
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To: techcor
Coal supplies can last a thousand years.

Perhaps at current rates of usage. But usage grows exponentially. Also you just proposed a way to use it up even faster.

18 posted on 11/21/2004 9:41:47 PM PST by wideminded
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To: wideminded
Also you just proposed a way to use it up even faster.

Actually what I proposed is for two slightly different sources to compete for the same market. Also, since the coal source is set to last for a long time, I think future generations will have nuclear power by then.
Here's another interesting concept. In India there are many workers who make there living off of charcoal production. There may be an economical way for those charcoal producers to become gasoline producers. It would probably only be economical in countries where the gasoline price is artificially high (taxes).

19 posted on 11/23/2004 1:50:25 PM PST by techcor
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To: ZGuy

There are plenty of proven oil reserves off the coast of California and Florida in shallow water, less than 200 feet. These fields along with all the oil in Alaska is enough to supply this country with oil for the next 200 years. By that time, we can develop adequate alternative energy sources. I live in Texas where oil has been drilled for and refined for over a hundred years. It's time all you whining/enviro/fags in Ca. and Fl. suck it up and give this nation a way out of the Middle East dependency on oil. We dont need their oil.


20 posted on 11/23/2004 2:09:41 PM PST by MAWG (Arafat, Kerry and now Rather..... I'll drink to that!)
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To: MAWG

The idea is to use up their oil first, then we will have ours in the future.


21 posted on 11/23/2004 2:26:11 PM PST by ▀udda▀udd (7 days - 7 ways)
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To: ▀udda▀udd

Respectfully, Budda, I dont think that idea is working. We need to get out of the middle east. It just isnt worth it anymore. Plus, ramping up the oil industry again in this country would be a huge boost to our economy. The state of Cal. in particular needs to accept this challenge and show us all how to do it right.


22 posted on 11/23/2004 2:41:20 PM PST by MAWG (Arafat, Kerry and now Rather..... I'll drink to that!)
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To: MAWG

I totally agree with you. Things would have to change, and people dont like changes.


23 posted on 11/23/2004 3:18:31 PM PST by ▀udda▀udd (7 days - 7 ways)
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