Just under Glenn Zorpette’s nice op-ed article in today’s New York Times (see entry below) was a large ad-ed placed by ExxonMobil. Titled “Peak Oil? Contrary to the theory, oil production shows no sign of a peak,” the piece blows smoke at the growing consensus among serious petroleum geologists that production of the cheap oil on which all modern economies are based is fast approaching the day when it stops growing to match demand, levels off for a while, and then inexorably falls. While many of its peer companies, including BP and Shell, have recognized the coming sea change and have begun (slowly) restructuring their research and development accordingly, ExxonMobil has apparently decided to address this looming socioeconomic problem by trying to convince the public and politicians that it isn’t there.
The facts suggest otherwise. Scientific American was among the first to present the scientific basis for projections of a peak in global production of conventional crude, in our 1998 special section “Preventing the Next Oil Crunch,” which led with an article on “The End of Cheap Oil.” The idea was controversial then. Now even the Bush administration’s Department of Energy offers reports warning that:
Many credible analysts have recently become much more pessimistic about the possibility of finding the huge new reserves needed to meet growing world demand.
Even the most optimistic forecasts suggest that world oil peaking will occur in less than 25 years.The peaking of world oil production could create enormous economic disruption, as only glimpsed during the 1973 oil embargo and the 1979 Iranian oil cut-off.
Peaking of World Oil Production: Impacts, Mitigation and Risk Management
National Energy Technology Laboratory, February 2005
The NETL report makes for sobering reading as it analyzes the dramatic changes that the U.S. and other energy-intensive nations will need to make to cope with a dwindling supply of inexpensive liquid fuels. It cautions that “waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.”
But waiting for the peak seems to be precisely the strategy that ExxonMobil advocates. Its advertorial asserts that “there is a lot of oil yet to be tapped. And we are getting better–technically and environmentally–at tapping it every day.”
World Oil, one of the two major trade journals for the petroleum industry, warns in its 2006 Outlook that despite double-digit increases in exploration investments in recent years:
2005 will go down in history books as perhaps the poorest year for exploration success for both oil and gas since World War II. This dismal success was not for lack of effort. Record amounts of funds are being plowed into E&P [exploration and production] capital spending, which is why all the world’s rigs are now in use.
The author, an energy industry consultant, goes on to predict that 2006 “will be the year when the Peak Oil topic intensifies into a debate on the scale of climate change/global warming.”
Let’s hope that particular forecast is correct.
