Oil: How Soon Will Global Supplies Be Exhausted
Oil: How Soon Will Global Supplies Be Exhausted
Modern society is extremely dependent on oil. Whether it be on transportation, food production or manufacturing, all these operations need oil to be carried out. Modern society is also characterized by the steady increase in population. This population increase also implies an increased dependency on oil. This dependency is currently supported by the present supply of oil from reserves. However, this oil reserves are finite. At the rate that the world is presently consuming oil, will the global supplies run out? And if so, how soon will it be exhausted?
This research paper aims to explore the question of the possible depletion of the world’s oil resources. Oil is the main source of energy in the world today (Fisker, 2006). According to the U. S. Geological Survey, 40% of all the utilized energy is derived from oil (as cited in Fisker, 2006). Energy is very much needed by modern society, as it cannot function without it. Through energy, raw materials are brought to the proper destination wherein they will be used for the production of commodities; later on, these commodities will be transported to their respective markets.
Indeed, oil is crucial in the everyday operations of society (Fisker, 2006). It is so crucial that its supply must be taken in consideration, as oil is not a renewable resource. The resources of oil will eventually be depleted, but will it occur soon enough to cause alarm in society? I believe that global supplies of oil will be exhausted soon. I am referring to the decrease in oil production that will occur as early as 2010 (Campbell and Laherrere, 1998). Oil depletion had been an issue as early as 1973 and 1979 (Campbell and Laherrere, 1998).
During both years, there was oil inflation, an event which caused people to believe that the oil reserves would soon run out. However, this belief was soon discredited. This is because authorities report that new locations and fields have been discovered can be utilized for oil (Bentley, 2002). In addition, reports from the oil industry continue to present an optimistic outlook for world oil. According to these reports, in the beginning of 1998, there are 1,020 billion oil barrels (Gbo) to be derived from the reserves (Campbell and Laherrere, 1998).
This statistic does indeed guarantee more years of interrupted oil supply (Campbell and Laherrere, 1998). Unfortunately, the reports and statistics are inaccurate, and do not give a realistic picture of the oil dilemma. It gives a false sense of “oil security” (Bentley, 2002). Campbell and Laherrere (1998) point out three problems that lie in these false reports: the miscalculated reserve estimates, the false belief of constant oil production, as well as the assumption that the last drop of oil can be easily extracted as the flowing oil today.
First, the estimates of oil reserves released in the media are erroneous (Campbell and Laherrere, 1998). Engineers who are tasked to estimate the oil reserves are dealing with probabilities to get results. Moreover, oil companies modify the details of their reserves to conceal the truth for their own interests. For example, an oil company or oil producing country may publish estimates much more than the real amount, and this is to enable them to increase their asking price. Nations which belong to the Organization of Petroleum Exporting Countries or OPEC, have also exaggerated their reserve estimates at one point.
It must be noted that these estimates do not mean an increase in supply; rather it is a means to increase the quota of their imports. In addition, these estimates are unjustified. It would be impossible for the supply of oil to increase when there are no discoveries of new oil fields or other oil-related developments (Campbell and Laherrere, 1998). Another issue that arises from the question of oil reserves is the very definition of the word “reserves” (Campbell and Laherrere, 1998).
According to the Securities and Exchange Commission in the United States, reserves are “proved” when the oil spoken of is located within close proximity to a “producing well,” and that the said oil can be derived and purchased at the present prices of oil and with the current oil technology (as cited in Campbell and Laherrere, 1998). This definition is not applied in other countries. For instance, the countries that were once part of the Soviet Union claimed an exaggerated amount of oil reserves; however, it was not determined whether these reserves are indeed “proved” (Campbell and Laherrere, 1998).
The second problem of the false claims in oil is the perception that oil will be produced at a steady rate (Campbell and Laherrere, 1998). According to Campbell and Laherrere (1998), the decline in the production of conventional oil will start before the year 2010. In analyzing the production of oil, experts use the technique of M. King Hubbert which was created in 1956 (Campbell and Laherrere, 1998). The theory of Hubbert states that the unlimited claim to a limited resource follows a curve in a shape of a bell.
Oil extraction will reach its peak the moment the half of the oil resource is consumed. After which, oil production will fall (Campbell and Laherrere, 1998) Most oil accounts claim that the global supply of oil will steadily increase in the next few years (Campbell and Laherrere, 1998). Even the U. S. Energy Information Administration had perceived that the production of oil will not be interfered for many decades. Unfortunately, this claim is false. Majority of the oil utilized at present are extracted from oil fields discovered in the early 1970s; most of these fields are already in decline.
Just like OPEC countries which choose to exaggerate their oil figures, some governments also choose to cover up the decline in oil reserves. This is because to do so would affect their political status and hinder their capacity to secure loans (Campbell and Laherrere, 1998). There are several things to consider in the future prospects of oil production (Campbell and Laherrere, 1998). The first is what is referred to as the “cumulative production” (Campbell and Laherrere, 1998). This is the term which describes the tally of all the oil extracted at present.
Second, there is the reserve estimates; this refers to the extent of oil that can be derived from oil fields. The last thing to consider is the amount of oil that has yet to be found and utilized. These three compose what is the “ultimate recovery” of oil, the total amount of oil which would have been taken from the oil resources when the supply runs out in the future (Campbell and Laherrere, 1998). The amount of the ultimate recovery is much more crucial than the question of oil reserves, as it determines the overall amount of oil that can still be acquired.
The extent of conventional oil on earth is not excessive, and the oil industry had already discovered 90% of its overall amount. According to Campbell and Laherrere (1998), the ultimate recovery of conventional oil is measured at only 1,000 billion barrels. Consequently, when 900 Gbo had already been used, the production will decline. The conventional oil production will reach its peak in the 21st century’s first ten years, after which it will slowly fall (Campbell and Laherrere, 1998).
The third problem of the false reports is the belief that the last remaining oil would be easily retrieved as the current supply (Campbell and Laherrere, 1998). While it is abundant, oil could be easily pumped from the reserves. However, when oil is scarce, the same procedure would not be as easy. Time will come when oil would no longer be flowing freely from the wells. It is important to note that the conventional oil in question is crude oil (Campbell and Laherrere, 1998). Campbell and Laherrere (1998) refer to crude as the “cheap oil. It is the supply of crude oil that is threatened. On the other hand, there are several sources of unconventional oil which can be used. In Venezuela, there is heavy oil called sludge, which can be made as a substitute to crude oil when it runs out (Campbell and Laherrere, 1998). In the former Soviet countries as well as Canada, there are shale and tar sand deposits which can produce billions of barrels of oil. However, governments at present have yet to come up with the technology to make use of these unconventional oils.
In addition, these unconventional oils also present environmental hazards, which do not make them ideal replacements for oil (Campbell and Laherrere, 1998). The world’s consumption of oil indeed exceeds the supply. It is therefore not a surprise that the oil production from global supplies will eventually begin to decline. Much concern had been given to the possible replacements of oil as it slowly runs out. Biofuels had been given much emphasis in recent times, as it is a suitable option to replace oil because it is a renewable source.
Other renewable options include solar power, hydro power and wind power (Fisker, 2006). For me, the issue is less about infinite supplies as it is about extreme usage. The concern that must be addressed at present should be the dependency in oil. Rather than look for alternative fuels to answer the world’s demand for oil, one must consider how the world could lessen its demand for oil. The impending scarcity of oil is expected as it is a limited supply; the question becomes, “why does man have an unlimited desire for oil? It is understood that oil is crucial to modern society. However, the problem began when man began to use more resources than he actually needs. From the information gathered, it is established that the global supplies will begin to decline by 2010. That decline implies that oil production has reached its peak, and that half of all the crude oil has been extracted. I believe the appropriate way to deal with the situation is not only to find alternatives that will substitute oil, but to also look for ways to decrease oil consumption and dependency.
After all, the problem began when the consumption became too much for the available supply. Hence, the world must be wary of its usage of available resources, as these could all run out if not properly and carefully utilized. The current global situation is alarming. Oil is only one of the resources that had been used and abused by mankind. If not utilized carefully, the water supply as well as the forest resources will be depleted as well. All these resources are crucial, and its impending loss compels me to action.
Due to such threat to the environment, I have learned to consider my actions and lifestyle in relation to these global concerns. In relation to oil, for instance, I have avoided using means of transportation if walking to the destination is an available option. This is but a small way, a rather minute effort to cut on oil consumption. However, this small step can effect great changes if other people followed suit. Therefore, the impending oil loss can be alleviated if individuals sought ways to reduce their consumption. I, in my own efforts, are trying the best that I can to do so.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 25 October 2016
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