Under the Microscope: Our world is totally dependent on oil. We use it to run our cars, aircraft and ships, to provide energy to generate electricity and as the raw material from which we make plastics, fabrics, detergents and solvents. But, world oil reserves are finite and one day the oil will run out. Estimates vary as to how much longer the oil will last, but it might run out as early as 2040. We must learn to live without oil, writes Prof William Reville
The Organisation of Petroleum Exporting Countries (Opec), representing 11 of the main oil producers, is optimistic. It claims members' oil reserves will hold out for another 80 years. But Opec has a vested interest in sounding optimistic. Some scientists believe world reserves will last only another 40 years and that we will experience a crisis long before that.
Colin Campbell, a geologist with long experience of the oil industry, argues that what we should anticipate is when oil production will start to become uneconomic. He reckons that oil prices will start to seriously rise by 2010 as production starts to decline. Campbell and co-author Jean Laherrere argue their case comprehensively in the March 1998 issue of Scientific American. Getting reliable figures about oil is not easy. The amount of oil that has been produced to date is the easiest figure to estimate. It is generally agreed that, by the end of 1997, the industry had removed 800 thousand million barrels - 800 giga barrels of oil (GBO) - from the earth. Estimating oil reserves is far more difficult. Not only is it intrinsically an inexact science but oil companies and oil exporting countries are sorely tempted to massage data to suit themselves. For example, inflated estimates can raise the price of an oil company's stock. According to Campbell's and Laherrere's best calculations, at the end of 1996 the world had reserves of 850 GBO.
What about discovery of new oil fields? Advances in geochemistry have made it possible to predict the geological conditions in which oil and gas will be found. The world has now been surveyed so completely that virtually all the potentially productive areas have been identified. Large areas are devoid of oil, eg most of the deepwater area. There is little scope left for surprise. Global discovery of oil peaked in the 1960s and has been in steady decline since. There is only a fixed amount of oil and, so far, the oil industry has discovered 90 per cent of it.
Once the estimate of the amount of oil left to produce is reliable it is a straightforward matter to predict when oil production will peak and start to decline. Campbell and Laherrere used a method first published in 1956 by M King Hubbert. Hubbert observed that the unrestrained extraction of any large resource rises on a bell-shaped curve and peaks when half the resource is removed. Application of this method predicts that world production of oil will peak before 2010.
After the peak is passed, oil production will start to decline and oil price will start to rise. But world population will continue to rise and this will further widen the gap between production of oil and demand for oil, causing oil price to rise even faster. Even a small drop in oil production can have huge effects. During the 1970s oil crisis a 5 per cent shortfall in oil production quadrupled the price of oil. An oil-dependent economy could be shattered by a 15 per cent shortfall between oil demand and supply. We are in an extremely vulnerable position.
So far I have been talking exclusively about readily accessible crude oil which is termed "conventional oil". Conventional oil represents most of the oil produced to-date and it will continue to dominate all supply far into the future. But the world also contains vast amounts of "unconventional oil" and economists like to claim this source will substitute for conventional oil as soon as the price rises enough to make extraction of unconventional oil profitable.
Non-conventional oil includes oil from coal and shale, bitumen and heavy oil. It has been estimated that Venezuela contains 1.2 trillion barrels of heavy oil. Canada and Russia also have rich deposits of tar sands and shale. There are big difficulties however in stepping up production of unconventional oil quickly enough to compensate for the decline in conventional oil. Difficulties include time, expense and environmental pollution. Campbell and Laherrere estimate that only 700 GBO will be produced from unconventional oil over the next 60 years.
The world will not run out of oil in the next few years, but production has now peaked, or is just about to peak. The end of cheap plentiful oil on which all developed nations depend is just around the corner. We must prepare to meet this challenge. The world will become insecure as the oil situation tightens. We can expect economic recessions, widely fluctuating stock markets and financial instability. Access to Middle Eastern oil will be vitally important and the US, Europe and the East will compete for their shares. There are obvious dangers of unwise military interventions - is this what happened in Iraq? Oil conservation will be vital and we will probably see the widespread introduction of nuclear power supplemented by as much power as we can squeeze out of renewable energy. As Campbell says, "It is time to wake up, for the alarm has sounded."
William Reville is associate professor of biochemistry and public awareness of science officer at UCC - http://understandingscience.ucc.ie