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Is the Era of Oil Nearing Its End?

Sunday, 12 August 2012 09:16 By Greg Gordon, McClatchy Newspapers | Report

Low gas tank(Photo: Surat Lozowick)Washington - After nearly a decade of warnings that the world’s oil supply was running out, Americans now are hearing about technology breakthroughs that can unlock vast U.S. deposits of natural gas, help reverse a 40-year slide in domestic oil production and perhaps transform America into the next Middle East.

But despite the euphoria, there’s a major problem: The looming American oil glut may simply not be enough to sate the United States and the rest of motorized humanity.

Experts say soaring demand from China and India is sure to send oil prices back above $100 a barrel. A supply disruption in the coming years, they say, could trigger panic, gasoline hoarding and perhaps lead to lines at the pumps akin to the 1973 Arab oil embargo and the 1979 Iranian revolution.

Global shortfalls of other fuels also could develop sooner than many people think, as a planet of nearly 7 billion people and more than 1 billion gasoline-gulping vehicles strains the limits of combustible energy resources that are the underpinning of modern civilization.

While oil industry officials take strong issue with these dim views, critics charge that governments here and abroad have been less than candid about future oil supplies and the ramifications of failing to shift to alternative fuels.

One outspoken Energy Department consultant, Robert Hirsch, alleged that the administrations of both Presidents George W. Bush and Barack Obama have engaged in a coverup of the likelihood of an oil shortage. Hirsch predicted a shortfall will hit in the next four years and send shockwaves through the world economy, possibly leading to gasoline rationing.

Few governments have implemented intensive conservation programs to stretch out supplies during a decades-long transition to more fuel-efficient vehicles.

Instead, critics say that even as oil prices nearly quadrupled from 2003 through 2011, government and industry leaders have played down the world’s worsening energy predicament.

For example:

  • While U.S. industry officials have trumpeted new drilling techniques that can recover huge deposits of previously unreachable oil and natural gas, most say little about the likelihood of surging Third World demand overtaking supplies, causing shortages and skyrocketing prices.
  • Industry watchdogs say that some U.S. Energy Information Administration forecasts have been wildly optimistic, especially a projection that between 2011 and 2035, global production of liquid fuels will see a 21.6 million-barrel rise in daily output – the equivalent of the current reserves of the five biggest Middle East oil producers.
  • Other projections and policies by the Energy Information Administration, which is the Energy Department’s independent information arm, as well as the Paris-based International Energy Agency and even the U.S. Securities and Exchange Commission, have masked mounting risks of shortages of oil and possibly natural gas, several experts say.

A McClatchy computer analysis suggests that proven reserves of all of the world’s primary fuels are likely to diminish much faster than the EIA and the IEA have suggested, begging questions about how long mankind can continue to increase consumption of finite resources.

Researchers at the International Monetary Fund, while not yet speaking for the fund, predicted in May that rising oil demand would drive prices to nearly $200 a barrel, “permanently,” within a decade. Commodities speculators could exacerbate a price surge if they echo their behavior in recent oil spikes.

The world must accept “the outlook for flattened oil supplies” and “the reality that the era of abundant cheap oil is over,” said Sadad Al Husseini, a former No. 2 executive for Saudi Arabia’s national oil company, Aramco. In emails to McClatchy, he called for worldwide energy conservation measures.

The U.S. Energy Information Administration’s deputy chief, Henry Gruenspecht, defended his agency’s main global oil supply forecast as stemming from “careful consideration of a wide range of factors.” He noted, however, that there’s “significant uncertainty” about future supply and demand of liquid fuels and a lack of transparency regarding some nations’ reserves.

An international group of scientists and energy experts argue that global oil production has peaked or soon will as the second half of the oil age begins. The experts, known as peak oil advocates, say that the output of 500 existing giant oilfields that provide most of the world’s liquid fuels has begun a gradual decline that will create a 17 million-barrel daily deficit by 2035.

If they’re right, and if the Energy Information Administration has accurately projected future demand, liquid fuels production must fill a daunting, 38.6 million-barrel daily void to keep pace – an amount equal to more than 40 percent of the current global output.

“We’re facing a situation that is real hard for anyone to grasp,” said Kjell Aleklett, the Swedish president of the Association for the Study of Peak Oil.

Oil industry officials strongly disagree.

Industry consultant Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, said that peak oil advocates have underestimated technology advances. While the costs are high, adequate supplies exist “if they can be developed in a reasonable time frame,” he said.

Yergin, whose latest book, “The Quest: Energy, Security, and the Remaking of the Modern World,” details the worldwide scramble for fuel, pointed in an interview to an almost 25 percent increase in U.S. oil production since 2008 and major new discoveries in the North Sea and off the coasts of Brazil and Ghana.

Exxon Mobil’s chairman and chief executive officer, Rex Tillerson, told the Council on Foreign Relations recently that high oil prices have spurred the industry to “develop resources that were previously not accessible.”

The latest technology will enable recovery of trillions of barrels of oil embedded in underground shale in Western states – enough “to carry us well into the latter part of this century at current production rates,” he said.

“There’s no question the world is running out of cheap oil,” said Brookings Institution scholar Charles Ebinger, who has advised 50 countries on energy matters. “Are we running out of expensive oil? I’m not convinced.”

Aleklett countered that, in a global context, most recent oil discoveries have been modest. For example, he said that if Norwegian oil company Statoil’s new discovery in the largely tapped North Sea amounts to a billion barrels, “that’s what the world consumes in 12 days.”

Indeed, a computer calculation shows how fast an energy-hungry planet could theoretically devour all of the proved reserves – those with a “reasonable certainty” of being recovered economically – of the world’s primary energy sources.

The Energy Information Administration’s 2011 outlook says that at current production rates, the world has 126 years of coal reserves and 60 years of natural gas. Using the same “reserves-to-production ratio,” the 1.47 trillion barrels of global conventional oil reserves, as estimated by Oil & Gas Journal in 2011, would last for 46 years.

But this yardstick fails to factor in annual growth in energy consumption – neither the agency’s conservative, 1.6 percent projected rate until 2035 nor the 2.2 percent rate of past decades.

To get a truer picture of the world’s supposedly guaranteed fuel supply, McClatchy compiled the raw energy content, in British thermal units, of the estimated proved reserves of oil, natural gas, coal and uranium.

Subtracting from that figure the total BTUs that the Energy Information Administration projects will be consumed each year from those four energy sources, and factoring in yearly consumption growth, shows how long the fuel might last.

Using the EIA’s modest 1.6 percent growth rate, all proved reserves of oil, natural gas, coal and uranium would be gone in 56 years.

Here’s another jaw dropper: If oil consumption increased at the Energy Information Administration’s average overall growth rate, albeit higher than the 1 percent at which the agency says liquid fuels use will grow, global supplies would last 36 years, a decade less than the agency’s ratio suggests.

Analyzing proved reserves doesn’t tell the full story, because the discovery of additional reserves has kept pace or exceeded annual depletions for years. Nor do global reserve figures include unconventional oil discoveries since 2009 – those from deep-water ocean drilling, Canadian sands or U.S. shale.

On the downside, if global oil supplies begin to shrink, Russia and other leading oil-producing countries would probably curb exports to preserve their oil, Aleklett said. Further, physics laws limit the flow of oil from each field to about 6 percent, meaning that rising demand only can be met with new discoveries, he said.

How much more oil can be found? The U.S. Geological Survey’s first global assessment in a dozen years of yet-to-be-found conventional oil hardly looks bullish. The agency estimated this spring that undiscovered oil, including oil far too expensive to retrieve, fell to 681 billion barrels, 51 billion less than in the year 2000. Recovery of half of that oil would fuel the planet for about a decade.

The USGS hasn’t finished the world’s first-ever government estimate of “undiscovered” unconventional oil. It could alter the picture significantly, though it’s unclear how quickly or at what cost that oil could be pumped.

Hirsch, the Energy Department consultant and co-author of “The Impending World Energy Mess,” said he’s so convinced that fuel constraints will force radical lifestyle changes that he’s divested his stock, sold his sports utility vehicle and moved within a short walk of a grocery.

The United States should have begun a crash program 10 to 20 years ago to replace gas-guzzling sports utility vehicles in its fleet of more than 250 million cars and trucks with smaller, more fuel-efficient models, he said. Instead, his blunt reports for a national energy laboratory during the Bush administration on how to mitigate the effects of peaking oil production led to an Energy Department order halting research on the subject, he said.

If he’s right, the nation has lost crucial time. In May, the Congressional Budget Office said in a report that the United States would have “very few near-term options for responding” to an oil shortage because it lacks spare production capacity and “cannot rapidly reduce its consumption of oil products.”

Obama broke a decades-long logjam to win adoption of a new, 50 mile-per-gallon average fuel-efficiency standard for fleets of light-duty vehicles. But the standards don’t fully phase in for 13 years – a transition that Hirsch said “just won’t be fast enough to make reasonable, painless changes.”

The Energy Information Administration’s own forecasts show that conservation progress is at a relative crawl. The agency projects that by 2035 the United States will have 79 million alternatively fueled light-duty vehicles on the roads – an increase of 65 million. However, it also projects that the number of gasoline-powered vehicles will rise by 8 million.

Since China began snapping up commitments for oil supplies in 2004 and sending prices sharply higher, oil companies have scoured the planet for new plays, drilling far offshore, miles below the ocean surface, and finding ways to extract petroleum trapped in rock. New discoveries in Canada, North Dakota and Texas, and off the coasts of Brazil, Argentina and Africa, have eased concerns.

But while oil prices rose as much as 400 percent since 2003, conventional oil production from traditional wells rose 4 percent, said Al Husseini, who has shared his energy assessments with the U.S. government.

A nearly half-trillion jump in global oil reserves over the last decade stemmed mainly from technology improvements that are heightening recoveries from known reservoirs, said Mark Finley, a senior economist for British oil giant BP. He blamed government obstacles around the world for the lack of more new discoveries.

Against this backdrop, the Energy Information Administration’s forecast for a 30 percent increase in liquid fuels production from 2008 to 2035 has drawn deep skepticism, especially given that some of its past prognostications have been notoriously high.

Al Husseini dismissed the EIA’s latest central forecast as “not credible,” saying it would amount to “the consumption of . . . about 100 billion barrels more oil than the entire proven reserves of Saudi Arabia, Kuwait, Iraq, Iran and the United Arab Emirates.”

The projection is “not plausible . . . just part of the whole politics of trickery that’s going on,” said retired Irish petroleum geologist Colin Campbell, who founded the peak oil movement in the late 1990s after analyzing secret industry data.

While defending the forecast, among a range of projections based on varying price scenarios, the EIA’s Gruenspecht said that “it is reasonable to be concerned about oil supply depletion beyond 2035.”

The International Energy Agency, which represents 28 countries from South Korea to the United States, also has been assailed for rosy oil forecasts, especially its projections in 2004 and again in 2008 that worldwide production would reach 121 billion barrels of oil equivalents per day by 2030.

Since being skewered by Aleklett and his team of researchers at Sweden’s Uppsala University, the IEA cut its latest outlook to between 99 million and 107 million barrels. That’s still unrealistically high, Aleklett said in a new book, “Peeking at Peak Oil.”

International Energy Agency officials declined to respond to emailed questions.

Separately, critics say that a rule change by the Securities and Exchange Commission in the waning days of the Bush administration has made it more difficult for the public to reliably determine the extent of U.S. oil companies’ oil reserves. To address under-reporting of reserves, the agency scrapped 30-year-old requirements that companies only count as proved reserves oil and gas deposits that have been tested and adjoin already identified reserves. Critics allege, however, that the new rules allow companies to use computer projections to overstate their reserves. Producers also now report their reserves not as oil, but as “oil equivalents,” a category that co-mingles oil and gas.

In the United States, warnings about the worldwide fuel supply have been mostly drowned out amid excitement over a natural gas boom spawned by a controversial new technique that combines horizontal drilling with hydraulic rock-fracturing. The process, known as “fracking,” crushes shale deep below the surface to free oil and gas.

Branded “a total game changer” for natural gas recovery by USGS Director Marcia McNutt, fracking has already ignited such a drilling frenzy that both natural gas and coal prices have plummeted

Brookings’ Ebinger said fracking also marks a “fundamental change” in the U.S. oil production outlook. Coupled with Canadian imports, he said, the United States could cut its daily oil imports from 9 million to 3 million barrels within a decade.

By 2035, the International Energy Agency projects, the world population will grow by 1.7 billion people, and 850 million more cars will be on the roads.

The U.S. Energy Information Administration says that oil demand from China and India will have zoomed from a combined 3.5 million barrels per day in 1991 to a projected 25 million barrels per day in 2035.

In the face of these trends, no one has yet explained how the planet will meet enormous increases in energy demand. Hirsch said that cleaner alternatives such as solar power, wind power and electric- and natural gas-powered vehicles still are too flawed and expensive to win broad acceptance.

“Without an urgent and radical change of policy direction, the world risks locking itself into an unsustainable energy future,” International Energy Agency executive director Maria van der Hoeven warned last fall, calling for a $38 trillion investment by 2035 and a shift to low-carbon technologies.

© 2014 McClatchy-Tribune Information Services. Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.

Greg Gordon

Greg Gordon is an investigative reporter for McClatchy's Washington Bureau.


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Is the Era of Oil Nearing Its End?

Sunday, 12 August 2012 09:16 By Greg Gordon, McClatchy Newspapers | Report

Low gas tank(Photo: Surat Lozowick)Washington - After nearly a decade of warnings that the world’s oil supply was running out, Americans now are hearing about technology breakthroughs that can unlock vast U.S. deposits of natural gas, help reverse a 40-year slide in domestic oil production and perhaps transform America into the next Middle East.

But despite the euphoria, there’s a major problem: The looming American oil glut may simply not be enough to sate the United States and the rest of motorized humanity.

Experts say soaring demand from China and India is sure to send oil prices back above $100 a barrel. A supply disruption in the coming years, they say, could trigger panic, gasoline hoarding and perhaps lead to lines at the pumps akin to the 1973 Arab oil embargo and the 1979 Iranian revolution.

Global shortfalls of other fuels also could develop sooner than many people think, as a planet of nearly 7 billion people and more than 1 billion gasoline-gulping vehicles strains the limits of combustible energy resources that are the underpinning of modern civilization.

While oil industry officials take strong issue with these dim views, critics charge that governments here and abroad have been less than candid about future oil supplies and the ramifications of failing to shift to alternative fuels.

One outspoken Energy Department consultant, Robert Hirsch, alleged that the administrations of both Presidents George W. Bush and Barack Obama have engaged in a coverup of the likelihood of an oil shortage. Hirsch predicted a shortfall will hit in the next four years and send shockwaves through the world economy, possibly leading to gasoline rationing.

Few governments have implemented intensive conservation programs to stretch out supplies during a decades-long transition to more fuel-efficient vehicles.

Instead, critics say that even as oil prices nearly quadrupled from 2003 through 2011, government and industry leaders have played down the world’s worsening energy predicament.

For example:

  • While U.S. industry officials have trumpeted new drilling techniques that can recover huge deposits of previously unreachable oil and natural gas, most say little about the likelihood of surging Third World demand overtaking supplies, causing shortages and skyrocketing prices.
  • Industry watchdogs say that some U.S. Energy Information Administration forecasts have been wildly optimistic, especially a projection that between 2011 and 2035, global production of liquid fuels will see a 21.6 million-barrel rise in daily output – the equivalent of the current reserves of the five biggest Middle East oil producers.
  • Other projections and policies by the Energy Information Administration, which is the Energy Department’s independent information arm, as well as the Paris-based International Energy Agency and even the U.S. Securities and Exchange Commission, have masked mounting risks of shortages of oil and possibly natural gas, several experts say.

A McClatchy computer analysis suggests that proven reserves of all of the world’s primary fuels are likely to diminish much faster than the EIA and the IEA have suggested, begging questions about how long mankind can continue to increase consumption of finite resources.

Researchers at the International Monetary Fund, while not yet speaking for the fund, predicted in May that rising oil demand would drive prices to nearly $200 a barrel, “permanently,” within a decade. Commodities speculators could exacerbate a price surge if they echo their behavior in recent oil spikes.

The world must accept “the outlook for flattened oil supplies” and “the reality that the era of abundant cheap oil is over,” said Sadad Al Husseini, a former No. 2 executive for Saudi Arabia’s national oil company, Aramco. In emails to McClatchy, he called for worldwide energy conservation measures.

The U.S. Energy Information Administration’s deputy chief, Henry Gruenspecht, defended his agency’s main global oil supply forecast as stemming from “careful consideration of a wide range of factors.” He noted, however, that there’s “significant uncertainty” about future supply and demand of liquid fuels and a lack of transparency regarding some nations’ reserves.

An international group of scientists and energy experts argue that global oil production has peaked or soon will as the second half of the oil age begins. The experts, known as peak oil advocates, say that the output of 500 existing giant oilfields that provide most of the world’s liquid fuels has begun a gradual decline that will create a 17 million-barrel daily deficit by 2035.

If they’re right, and if the Energy Information Administration has accurately projected future demand, liquid fuels production must fill a daunting, 38.6 million-barrel daily void to keep pace – an amount equal to more than 40 percent of the current global output.

“We’re facing a situation that is real hard for anyone to grasp,” said Kjell Aleklett, the Swedish president of the Association for the Study of Peak Oil.

Oil industry officials strongly disagree.

Industry consultant Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, said that peak oil advocates have underestimated technology advances. While the costs are high, adequate supplies exist “if they can be developed in a reasonable time frame,” he said.

Yergin, whose latest book, “The Quest: Energy, Security, and the Remaking of the Modern World,” details the worldwide scramble for fuel, pointed in an interview to an almost 25 percent increase in U.S. oil production since 2008 and major new discoveries in the North Sea and off the coasts of Brazil and Ghana.

Exxon Mobil’s chairman and chief executive officer, Rex Tillerson, told the Council on Foreign Relations recently that high oil prices have spurred the industry to “develop resources that were previously not accessible.”

The latest technology will enable recovery of trillions of barrels of oil embedded in underground shale in Western states – enough “to carry us well into the latter part of this century at current production rates,” he said.

“There’s no question the world is running out of cheap oil,” said Brookings Institution scholar Charles Ebinger, who has advised 50 countries on energy matters. “Are we running out of expensive oil? I’m not convinced.”

Aleklett countered that, in a global context, most recent oil discoveries have been modest. For example, he said that if Norwegian oil company Statoil’s new discovery in the largely tapped North Sea amounts to a billion barrels, “that’s what the world consumes in 12 days.”

Indeed, a computer calculation shows how fast an energy-hungry planet could theoretically devour all of the proved reserves – those with a “reasonable certainty” of being recovered economically – of the world’s primary energy sources.

The Energy Information Administration’s 2011 outlook says that at current production rates, the world has 126 years of coal reserves and 60 years of natural gas. Using the same “reserves-to-production ratio,” the 1.47 trillion barrels of global conventional oil reserves, as estimated by Oil & Gas Journal in 2011, would last for 46 years.

But this yardstick fails to factor in annual growth in energy consumption – neither the agency’s conservative, 1.6 percent projected rate until 2035 nor the 2.2 percent rate of past decades.

To get a truer picture of the world’s supposedly guaranteed fuel supply, McClatchy compiled the raw energy content, in British thermal units, of the estimated proved reserves of oil, natural gas, coal and uranium.

Subtracting from that figure the total BTUs that the Energy Information Administration projects will be consumed each year from those four energy sources, and factoring in yearly consumption growth, shows how long the fuel might last.

Using the EIA’s modest 1.6 percent growth rate, all proved reserves of oil, natural gas, coal and uranium would be gone in 56 years.

Here’s another jaw dropper: If oil consumption increased at the Energy Information Administration’s average overall growth rate, albeit higher than the 1 percent at which the agency says liquid fuels use will grow, global supplies would last 36 years, a decade less than the agency’s ratio suggests.

Analyzing proved reserves doesn’t tell the full story, because the discovery of additional reserves has kept pace or exceeded annual depletions for years. Nor do global reserve figures include unconventional oil discoveries since 2009 – those from deep-water ocean drilling, Canadian sands or U.S. shale.

On the downside, if global oil supplies begin to shrink, Russia and other leading oil-producing countries would probably curb exports to preserve their oil, Aleklett said. Further, physics laws limit the flow of oil from each field to about 6 percent, meaning that rising demand only can be met with new discoveries, he said.

How much more oil can be found? The U.S. Geological Survey’s first global assessment in a dozen years of yet-to-be-found conventional oil hardly looks bullish. The agency estimated this spring that undiscovered oil, including oil far too expensive to retrieve, fell to 681 billion barrels, 51 billion less than in the year 2000. Recovery of half of that oil would fuel the planet for about a decade.

The USGS hasn’t finished the world’s first-ever government estimate of “undiscovered” unconventional oil. It could alter the picture significantly, though it’s unclear how quickly or at what cost that oil could be pumped.

Hirsch, the Energy Department consultant and co-author of “The Impending World Energy Mess,” said he’s so convinced that fuel constraints will force radical lifestyle changes that he’s divested his stock, sold his sports utility vehicle and moved within a short walk of a grocery.

The United States should have begun a crash program 10 to 20 years ago to replace gas-guzzling sports utility vehicles in its fleet of more than 250 million cars and trucks with smaller, more fuel-efficient models, he said. Instead, his blunt reports for a national energy laboratory during the Bush administration on how to mitigate the effects of peaking oil production led to an Energy Department order halting research on the subject, he said.

If he’s right, the nation has lost crucial time. In May, the Congressional Budget Office said in a report that the United States would have “very few near-term options for responding” to an oil shortage because it lacks spare production capacity and “cannot rapidly reduce its consumption of oil products.”

Obama broke a decades-long logjam to win adoption of a new, 50 mile-per-gallon average fuel-efficiency standard for fleets of light-duty vehicles. But the standards don’t fully phase in for 13 years – a transition that Hirsch said “just won’t be fast enough to make reasonable, painless changes.”

The Energy Information Administration’s own forecasts show that conservation progress is at a relative crawl. The agency projects that by 2035 the United States will have 79 million alternatively fueled light-duty vehicles on the roads – an increase of 65 million. However, it also projects that the number of gasoline-powered vehicles will rise by 8 million.

Since China began snapping up commitments for oil supplies in 2004 and sending prices sharply higher, oil companies have scoured the planet for new plays, drilling far offshore, miles below the ocean surface, and finding ways to extract petroleum trapped in rock. New discoveries in Canada, North Dakota and Texas, and off the coasts of Brazil, Argentina and Africa, have eased concerns.

But while oil prices rose as much as 400 percent since 2003, conventional oil production from traditional wells rose 4 percent, said Al Husseini, who has shared his energy assessments with the U.S. government.

A nearly half-trillion jump in global oil reserves over the last decade stemmed mainly from technology improvements that are heightening recoveries from known reservoirs, said Mark Finley, a senior economist for British oil giant BP. He blamed government obstacles around the world for the lack of more new discoveries.

Against this backdrop, the Energy Information Administration’s forecast for a 30 percent increase in liquid fuels production from 2008 to 2035 has drawn deep skepticism, especially given that some of its past prognostications have been notoriously high.

Al Husseini dismissed the EIA’s latest central forecast as “not credible,” saying it would amount to “the consumption of . . . about 100 billion barrels more oil than the entire proven reserves of Saudi Arabia, Kuwait, Iraq, Iran and the United Arab Emirates.”

The projection is “not plausible . . . just part of the whole politics of trickery that’s going on,” said retired Irish petroleum geologist Colin Campbell, who founded the peak oil movement in the late 1990s after analyzing secret industry data.

While defending the forecast, among a range of projections based on varying price scenarios, the EIA’s Gruenspecht said that “it is reasonable to be concerned about oil supply depletion beyond 2035.”

The International Energy Agency, which represents 28 countries from South Korea to the United States, also has been assailed for rosy oil forecasts, especially its projections in 2004 and again in 2008 that worldwide production would reach 121 billion barrels of oil equivalents per day by 2030.

Since being skewered by Aleklett and his team of researchers at Sweden’s Uppsala University, the IEA cut its latest outlook to between 99 million and 107 million barrels. That’s still unrealistically high, Aleklett said in a new book, “Peeking at Peak Oil.”

International Energy Agency officials declined to respond to emailed questions.

Separately, critics say that a rule change by the Securities and Exchange Commission in the waning days of the Bush administration has made it more difficult for the public to reliably determine the extent of U.S. oil companies’ oil reserves. To address under-reporting of reserves, the agency scrapped 30-year-old requirements that companies only count as proved reserves oil and gas deposits that have been tested and adjoin already identified reserves. Critics allege, however, that the new rules allow companies to use computer projections to overstate their reserves. Producers also now report their reserves not as oil, but as “oil equivalents,” a category that co-mingles oil and gas.

In the United States, warnings about the worldwide fuel supply have been mostly drowned out amid excitement over a natural gas boom spawned by a controversial new technique that combines horizontal drilling with hydraulic rock-fracturing. The process, known as “fracking,” crushes shale deep below the surface to free oil and gas.

Branded “a total game changer” for natural gas recovery by USGS Director Marcia McNutt, fracking has already ignited such a drilling frenzy that both natural gas and coal prices have plummeted

Brookings’ Ebinger said fracking also marks a “fundamental change” in the U.S. oil production outlook. Coupled with Canadian imports, he said, the United States could cut its daily oil imports from 9 million to 3 million barrels within a decade.

By 2035, the International Energy Agency projects, the world population will grow by 1.7 billion people, and 850 million more cars will be on the roads.

The U.S. Energy Information Administration says that oil demand from China and India will have zoomed from a combined 3.5 million barrels per day in 1991 to a projected 25 million barrels per day in 2035.

In the face of these trends, no one has yet explained how the planet will meet enormous increases in energy demand. Hirsch said that cleaner alternatives such as solar power, wind power and electric- and natural gas-powered vehicles still are too flawed and expensive to win broad acceptance.

“Without an urgent and radical change of policy direction, the world risks locking itself into an unsustainable energy future,” International Energy Agency executive director Maria van der Hoeven warned last fall, calling for a $38 trillion investment by 2035 and a shift to low-carbon technologies.

© 2014 McClatchy-Tribune Information Services. Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.

Greg Gordon

Greg Gordon is an investigative reporter for McClatchy's Washington Bureau.


Hide Comments

blog comments powered by Disqus