Oil peak: A crude ruse?

“We’re running out of oil!” We’ve been hearing this warning at least since the 1970s oil shocks, but recently it has been proclaimed with increasing insistence.

The idea goes back to 1956, when Shell geologist M King Hubbert declared that the world had enough oil for only about 50 more years. This thesis, popularly known as “peak oil’’ or “Hubbert’s peak”, was based on his estimates of petroleum reserves and ever-increasing energy demand.

Were Hubbert right, the productivity of oil wells should be plummeting about now. In fact, my next trip in my Toyota could be my last car ride ever.

So are we running short of oil? Far from it.
By 2007, exploitable reserves of oil were well over one trillion barrels. Current world demand, according to the United States-based Energy Information Administration, is 31,4-billion barrels a year.

Since Hubbert’s day, technologies for oil exploration have improved at breakneck speed, leading to the discovery of deposits in places nobody imagined decades ago. And new extraction technologies now make it possible to obtain oil from increasingly remote places and geological formations that were previously impenetrable.

High petrol and electricity prices have nothing to do with the alleged scarcity of crude. Rather, the “peak oil” thesis has caused many citizens and consumers to accept high energy prices without protesting. Don’t blame Hugo Chávez or the Arabs. When oil prices go up, the ultimate winners are oil company stockholders.

But energy demand does keep increasing. The US government forecasts that energy consumption worldwide will grow by 71% between 2003 and 2030. Is the end of oil only a little bit further off than Hubbert predicted?

Not quite.

Canada’s tar sands contain the world’s largest petroleum reserves after Saudi Arabia. Some argue that these will never be tapped because it is too costly to extract the oil from a problematic mix of bitumen, sand, clay and water. But as the price of oil hovers around and surpasses the $100-a-barrel mark, which it hit early this month, extracting oil from places where it previously was not a worthwhile investment will become profitable. British Petroleum is already in the Canadian province of Alberta, exploiting a 54 000-square-mile tar sand deposit. This is only the vanguard of a new petroleum rush, this time in the northern latitudes.

Separating oil from tar sands produces four times as much carbon dioxide as conventional oil drilling. Exploiting these deposits could release as much as 100-million tonnes of carbon dioxide into the atmosphere. This surely explains the Canadian government’s stubborn and obstructionist stance at the United Nations Conference on Climate Change in Bali last December. Canada, along with the US and Japan, refused to accept the emissions cuts of 25% to 40% originally proposed by European countries.

Even if the tar sands run out, we have enough coal to burn for centuries. The race is on to develop an economically feasible way to turn it into liquid fuel. South Africa’s Sasol is carrying out studies to that end.

In other words, we have plenty of fossil fuels. They will not run out in our lifetime, as many environmentalists hope. The planet will have been cooked several times over before there is a real scarcity of coal or oil.

We cannot afford to sit around and wait for a “peak oil’’ crisis that will not come. Only activism and political action can save the planet from global warming.—IPS

Author and investigative reporter Carmelo Ruiz-Marrero is a fellow at the Oakland Institute

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