Thought Everyone Might Be Too Upbeat

Here's an excerpt from the Chicago Tribune article I posted a link to a few weeks ago:

Is the World Running Out of Crude?

The prospect seems unthinkable--mostly because the consequences, if true, would be unimaginable. Permanent fuel shortages would tip the world into a generations-long economic depression. Millions would lose their jobs as industry implodes. Farm tractors would be idled for lack of fuel, triggering massive famines. Energy wars would flare. And car-less suburbanites would trudge to their nearest big-box stores--not to buy Chinese-made clothing transported cheaply across the globe, but to scavenge glass and copper wire from abandoned buildings.

This may sound like the plot from a B-grade disaster flick. But with crude prices hitting record highs since 2004, global oil demand outstripping supplies like never before and major discoveries stagnant for 20 years, peak oil has migrated from the fringe to the center of the global energy debate.

Predictions about the “end of oil” are not new, of course. As early as 1875, the state geologist of Pennsylvania warned that the newly tapped substance would soon run dry.

“What peak oil proponents focus on is discovered resources,” said Scott Nauman, an executive with Exxon Mobil, which takes a skeptical stance on peak oil. “They overlook future discoveries and growth to unknown resources. There are very under-explored areas of the world ... where over 50 percent of the world’s remaining resource is located.”

But a diverse group of experts disagrees. Sources as sobersided as the U.S. Army Corps of Engineers and former Energy Secretary James Schlesinger have issued urgent wake-up calls about the economic, security and political repercussions awaiting the world as conventional crude supplies dwindle.

What “peakists” stress is that the planet’s fuel gauge needn’t droop near zero before shortages begin to roil the world economy. Output from petroleum reservoirs sags when they are only half drained, geologists say. Several of the world’s biggest fields appear to be sliding down that irreversible slope already.

As with the global-warming debate, even skeptics don’t deny the basic phenomenon. The controversy swirls around how much time we have left to prepare.

Optimists, including energy economists and oil giants such as Saudi Arabia, say the peak is at least decades away. They estimate 2 trillion to 4 trillion barrels of oil remain, though much of it is heavy or unconventional crude too expensive to process.

Pessimists, whose ranks are peppered with retired industry geologists, think there may be as little as 1 trillion barrels of oil remaining. By this accounting, the world is about to hit its peak within a few years, if it hasn’t already.

Kenneth Deffeyes, a former Shell geologist and professor emeritus at Princeton, symbolically declared Thanksgiving 2005 as “peak oil day.” “We can pause and give thanks for the years from 901 to 2005 when abundant oil and natural gas fueled enormous changes in our society,” he wrote. “At the same time, we have to face up to reality: World oil production is going to decline, slowly at first and then more rapidly.

”Probably the most exhaustive study of peak oil was done in 2000 by the U.S. Geological Survey. A consensus of geologists concluded then--before China’s roaring economy started soaking up the world’s surplus oil--that peak would come by 2037. Last year, the government moved its estimate to 2044.

Even that assessment is jolting. The fuel that powers our cars, our military, our technological way of life and our frenetic consumer culture likely will have to be replaced before today’s preschoolers turn 40.