Additional reading energy choices, energy problems the crisis of the 1970s

Energy usage in industrialized countries grew with dizzying speed through the mid–twentieth century. Of the many possible sources, people came to rely mostly on oil, which burns more efficiently than coal and, being a liquid, can be transported easily even though oil is not the most abundant energy resource. Eventually, oil supplies within the borders of industrialized countries could no longer match the demand, and these countries began to import more oil than they produced themselves.

Through the 1960s, oil prices remained low (about $1.80 a barrel), so this was not a problem. In 1973, however, a complex tangle of politics and war led the Organization of Petroleum-Exporting Countries (OPEC) to limit its oil exports. In the United States, fear of an oil shortage turned to panic, and motorists began lining up at gas stations, in many cases waiting for hours to fill their tanks. The price of oil rose to $18 a barrel, and newspaper headlines proclaimed an “Energy Crisis!” Governments in industrialized countries instituted new rules to encourage oil conservation—speed limits dropped, manufacturers produced smaller cars, power companies switched back to coal, home insulation became tax deductible, and conservation slogans appeared next to light switches.

During the last two decades of the twentieth century, the oil market stabilized, though political events occasionally led to price jumps and short-term shortages—a shortage in 1979, for example, pushed the price of oil temporarily to over $30 a barrel (≈$60/bbl in present dollars). During most of the 1980s and 1990s, oil hovered at about $25/bbl. But in 2007, it passed the $83/bbl mark. Will there come a day when shortages arise not because of an embargo or high prices but because there is no more oil to produce? To answer these questions, we need to examine the world oil supply. What we find there may be unnerving.

The oil crunch

To understand the issues involved in predicting the future of energy supplies, we must first classify energy resources. We call a particular resource “renewable” if nature can replace it within a short time relative to a human life span (in months or, at most, decades). We call a resource “nonrenewable” if nature takes a very long time (hundreds to perhaps millions of years) to replenish it. Oil, gas, and coal are nonrenewable resources, in that the rate at which humans consume these materials far exceeds the rate at which nature replenishes them, so we will inevitably run out of oil. The question is - When?

Historians in the future may refer to our time as the Oil Age, because so much of our economy depends on oil. How long will this Oil Age last? Geologists estimate that as of 2000, there were about 850 to 1,000 billion barrels of proven conventional reserves (oil that had been found). There may be an additional 100 to 2,000 billion barrels not yet found. Thus, the world probably holds between 1,100 and 3,000 billion barrels of obtainable oil (not counting oil in tar sands or oil shales). Presently, humanity guzzles oil at a rate of about 28 billion barrels per year. The United States alone consumes more than 20 million barrels a day. At this rate of consumption, oil supplies will last until sometime between 2050 and 2150.

Unfortunately, problems may begin long before the supply runs out completely, because as oil becomes scarcer, it becomes harder to produce. Only the first third of the oil in a field flows easily into wells; another third may be urged into wells using expensive techniques, but the remaining third stays put, trapped in isolated pores. Already, geologists see the beginning of the end of the Oil Age, for consumption now exceeds the rate of discovery of new oil by a factor of 3. Further, burning oil has environmental consequences. In the end, the Oil Age will probably have lasted less than three centuries. On a time line representing the 4,000 years since the construction of the Egyptian pyramids, this looks like a very small blip. We may indeed be living during a unique interval of human history.